Switching car insurance companies represents a hassle few want to deal with, but sometimes you have no choice, such as when your current insurance company gives bad customer service. These types of negative experiences range from raising rates unexpectedly to delays in processing claims to treating you badly over the phone.
Regardless of the reason, a bad customer service experience can leave you wanting to switch companies. The following explains why you may want to switch and what you should look for when searching for a new car insurance company.
The biggest customer complaints about car insurance companies
More than high car insurance premiums, poor customer service ranked near the top of reasons why car owners switched car insurance companies, according to J.D. Power. According to the study
, 30% of study respondents shopped for car insurance during 2013, with 36% of shoppers deciding to switch companies. Surprisingly, only 13% switched due to premium increases. Poor customer service was the biggest contributor to a change in companies, accounting for 28% of respondent reasons.
Comparing car insurance companies
Before switching car insurance companies, you should also read about the experiences of other customers on online review sites, such as Consumer Affairs
, J.D. Power
, and Top Ten Reviews
, among others. Look for car insurance companies that receive a good overall satisfaction rating from customers. You do need to keep in mind that all companies occasionally have bad reviews. Other sources of reviews include:
State Department of Insurance: Your state's Department of Insurance can give you access to customer complaints made to the state government about car insurance companies. Compare the consumer complaint ratio, which gives the number of complaints a company receives for every 1,000 coverage claims. To find information on your state commissioners, visit the NAIC website
. Body shops: Body shops regularly deal with insurance companies when fixing cars involved in accidents
. By checking with local body shops, you can learn which insurance companies represent a hassle for their customers. Credit rating companies: Companies such as A.M. Best and Standard & Poor's regularly grade the ability of a car insurance company to pay out claims. This allows you to gauge the financial strength of a company and determine the likelihood of encountering problems when filing a claim with the company. You might find this information at the car insurance company's website or on the A.M. Best and Standard and Poor's websites.
What to look for when switching car insurance companies
In addition to good customer service, you need to keep other factors in mind when switching car insurance companies. Some other things to look for when switching car insurance companies
include: Additional benefits offered
Other considerations when switching car insurance companies
Before cancelling your old policy, make sure you have the new car insurance coverage in place. Many states require continuous coverage to avoid uncovered accidents due to a coverage gap. By purchasing the new policy and making sure it takes effect first before cancelling your old policy, you ensure that you maintain the coverage minimums you need and stay within lender and state requirements regarding coverage levels. Schedule your old policy’s cancellation to coincide with the effective date of your new policy.
When cancelling your old policy, make sure you actually cancel it in writing or by calling an agent with the company. You should also ask for confirmation of the policy cancellation in writing, or at least via email. That way, the company can't come back and say you still owe them at some point in the future or send you to collections for non-payment. Also, ask if you can expect any kind of refund for an early cancellation and if any penalties apply for cancelling early.
By reading up on the reviews of other customers and companies that deal with car insurance companies you can switch insurance policies with confidence.
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