There are lots of reasons why people switch car insurance companies, including cost savings, a change in driver circumstances, poor customer service, and referrals.
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Perhaps unsurprisingly, rising costs are a huge motivator for people to switch car insurance companies.
The good news is that there is lots of competition in the car insurance space, so you’ll have plenty of options to choose from if you want to find a better rate. Insurance pricing can vary widely between providers for similar coverage options, so it’s always wise to
Changing driver circumstances
If your circumstances change, your insurance rate will be impacted. If your costs start to
rise because of a life change, that’s a sign it's time to look elsewhere for a better rate. Here are some common driver circumstances that often spur people to look for new insurance.
Adding a new driver
If you’re adding your newly-licensed 16-year-old to your car insurance policy, your rate is going to go up. Why? Because insurers see younger drivers as riskier to insure, due to their higher involvement in accidents.
But that doesn’t mean you won’t be able to find a cheaper insurance rate elsewhere. True, you’ll probably still pay more than when it was just you on your policy, but it never hurts to compare quotes.
Moving to a more populated area
You’ll likely find your current insurance rate rising if you move to a more populated area.
Losing a job
Unfortunately, you could find your insurance rates go up if you lose your job or are furloughed. If this happens, finding a better insurance rate is a great way to soften the blow of losing a job and keep you above water before landing on your feet.
Key Takeaway If you add a new driver to your policy, move to a more urban area, or lose your job, your insurance rates will likely rise. Shopping around can help you find a better premium to mitigate those changing circumstances.
Your insurance company is the problem
If a car insurer makes a habit of treating its customers badly, especially in times of accident and need, then those customers will leave in droves.
The truth is, some car insurers are great to work with while others are not. If your insurer doesn’t treat you well, is unhelpful, slow to respond, or unresponsive, it’s definitely a good time to think about switching insurers.
Auto insurance benefits vs. costs
If you’re concerned about rising car insurance costs, take a look around and see what benefits or perks the competition can offer.
Some insurers have loyalty programs and discounts for customers who stick with them long term, or for being accident-free for an extended period of time. Others offer discounts for driving cars with certain safety features, like anti-lock brakes or more airbags. Ask your insurer if they offer any discounts.
You might be able to
score a discountfrom your insurer by taking a defensive driving course online or at your local DMV. Parking your car indoors can also qualify you for a reduction in your rate.
That being said, any discount might not offset an increase in your insurance rate. If that’s the case, shop around for a more affordable rate.
Key Takeaway Ask your insurer if they offer discounts for your car’s safety features or for improving your driving with a defensive driving course.
Car insurance referrals
If a trusted family member or friend refers you to another car insurer, it doesn’t hurt to see what they have to offer.
Some insurers offer discounts to both the person who made the referral and the potential new customer. This could come in the form of gift card incentives or discounts on future renewal fees.
What to consider before switching
If you’re ready to switch car insurers, there are a few things to keep in mind.
First, wait until your renewal period arrives before making a switch. You don’t want to get penalized for leaving your policy before its term is up.
After doing some comparison shopping, switch insurers as soon as you are able to ensure you don’t have any gaps in your coverage. If you’re set up to make monthly or annual premium payments online, be sure these are adjusted to match your new insurance provider.
Before deciding which insurer you’re going to switch to, don’t hesitate to call them and get them to pitch you on why they’re the best fit for your car insurance needs.
This will show not only how much they want your business, but what they’re willing to do to get it and keep you happy.
Frequently asked questions
My insurer raised my rate after I added one of my children to my policy. What can I do?
New, young drivers will often get saddled with higher insurance rates since insurers view them as higher risks to get into accidents and make claims.
While adding a child to your policy will usually result in a rate hike, you may be able to find another insurer who is willing to offer a better rate. It’s best to shop around.
There have been ethical lapses with my car insurer. Should I switch insurers?
This all depends on you. If you feel uncomfortable with how your insurer does business, then it's a good idea to look around for another option. Even if you’ve been with a company for a long time, you will easily be able to find another insurer who does business honestly and treats their customers well.
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