When you first start to compare car insurance rates as a new driver, you might not know exactly what you’re looking for. This is why so many drivers end up with the same insurance provider as their parents.
Over time, though, you may begin to realize that your insurance provider isn’t offering you the best options or rates. While many people simply let their policy renew from year to year without much thought, you may eventually reach a point where you decide you want to switch providers.
When should you switch, though? Does the timing matter? Are there certain circumstances in which switching car insurance companies is advisable? Here are a few factors to consider.
When it’s Time to Renew
Whether you have personal or commercial vehicle insurance, your policy generally has an annual renewal. If you’re thinking of renewing your policy, you might want to do so when your renewal rolls around. The main reason for this is because it’s the easiest time to cancel your old policy.
There’s nothing to stop you if you want to compare car insurance quotes and switch providers mid-policy. You’ll almost certainly receive a partial refund from your original provider. However, you may face penalties or administrative fees of some kind for early cancellation.
When Rates Go Up
If your car insurance rates go up for any reason, it’s a good idea to reassess and determine if switching to a new insurance provider is wise, especially if you’re on a tight budget. There are laws in place that stop insurance providers from arbitrarily hiking your rates or dropping your coverage (although laws may vary by state).
There are also circumstances in which your actions (or accidents) can justify increases. Either way, you simply might not have the wiggle room in your budget to afford this additional expense, in which case it’s definitely time to see what other providers are willing to offer.
When Circumstances Change
There are several instances in which you may wish to look for new auto insurance options. If your household income changes due to job loss, you may have to give up your pricy coverage in favor of less costly insurance.
Once you pay off your auto loan, you have the option to downgrade from full coverage insurance to a liability policy, at which time you may want to consider other providers. In some cases, your insurance provider will accommodate you with a new policy that suits your needs, but you should also check out other options.
When you start seeking auto or motorcycle insurance quotes from other providers, don’t forget to include your current provider. Often, if you come back to your provider with some leverage (i.e. better offers from competitors) the company will put together a competitive bid to retain your business.