Have you ever calculated how much money you spend on auto insurance each year? Car insurance rates vary greatly depending on a variety of factors such as where you live, your driving history and what kind of car you drive.
The car insurance coverage options you choose will also impact your premium. One of the easiest ways to save money is to switch your car insurance. Most people stick with their auto insurance carrier for years - rarely ever looking at their policy. But with rates rising every year, switching insurance could save you hundreds of dollars every year.
Most people have tried to save money at some point by switching their mobile carrier or Internet service provider. And most of the time it only results in finding out that they are locked into a lengthy contract. Fortunately, this isn't the case with your car insurance. Drivers are free to shop around and switch car insurance providers at any time.
Some people will wait until the end of their policy, but this is not necessary. Each month that you wait to compare car insurance rates is another month that you may be paying much more for coverage than you need to. The time to shop around and to make a switch is now.
One reason to switch providers is that factors in your life may have changed that could have a major impact on your rates.
Factors that can affect your insurance rates vary by provider, but some of the most common are:
Relocating to a new ZIP code
Buying a new car
Paying off your car loan
Changing coverage types and amounts
Getting married or divorced
Starting a work-from-home job
Enrolling in college full-time
Another reason to switch your car insurance is if you’ve experienced a bump in your credit score lately. Your credit score could improve if you’ve reduced your credit card debt significantly, paid off a student loan or an old debt has fallen off your record. Many insurance companies consider your auto insurance score when setting your rate. An insurance score factors in certain aspects of your credit history to determine your likelihood of filing an auto insurance claim.
You’ll also want to shop for new insurance if you have added a teen or senior driver to your policy. Insurance rates also drop at milestone ages, such as when you reach 25 or 30 years old.
Rates aren't the only reason to consider switching insurance providers. If you recently experienced poor customer service or had a very unpleasant experience filing a claim, now may be the right time to transfer coverage to a more reputable insurance company.
Car insurance rates are dependent on a wide range of factors, and changes to any of these factors may qualify you for a lower rate. How each provider analyzes these factors is unique, which makes getting multiple quotes very important. For example, one provider may offer a much lower rate when your credit score improves than another provider offers.Many providers also offer unique discounts and credits for additional savings. The availability of these discounts and credits as well as their financial value to you vary by provider.
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Because you aren’t locked into coverage with your current provider, you can switch at any time - and most insurers do this at no cost to you. You’ll want to review your policy terms or give your insurance agent a call for details on the company’s cancellation policy.
When you establish new coverage, you can choose your billing options. Some insurers offer you a discount if you set up monthly automatic payments, or pay your premium every six months or annually. It could be worth it to pay more upfront if you can swing the lump sum.
For many drivers, now is the right time to actively search for better coverage, but you may not know where or how to start. The first step is to understand how to gather quotes. With Squeeze, you can get multiple quotes quickly and easily. Avoid spending hours on the phone repeating the same information to each provider that you request a quote from.
Many insurance companies strive to win your business by offering you the lowest rate, which will include any discounts they offer. However, you should not assume that you're getting the best deal. Inquire about discounts that you may qualify for, and ensure that the quote provided takes the discounts into account.
Some of the most common car insurance discounts include:
A safe driver or accident-free discount
A low-mileage discount
A student driver discount
Savings for paying the premium in full
Discounts for your affiliation with various associations or organizations
In some cases, drivers are hit with an unexpected insurance rate increase. Even if your rate has not increased, it may no longer be the most competitive rate available to you. Nobody wants to pay more for car insurance coverage than they need to. Make plans to compare rates every time your policy renews, which may be every six to 12 months. Remember to compare rates before a policy renewal if other significant factors change.
Getting new car insurance can result in better coverage, a lower premium, improved customer service and other benefits.
Here’s how to switch your car insurance and get the best coverage.
Take a minute to review your current insurance policy. In addition to checking your coverage levels, be sure to look at all the applied discounts. If you want to make any changes to your policy, now is the time. Some questions to ask yourself include:
Has my daily commute changed at all recently?
How much could I afford to pay out-of-pocket for a car repair?
Is my car getting older and less valuable
You can contact insurers separately by phone or on their website. An alternative is to use a quote comparison tool like Squeeze. If you just paid off your car or need to add someone to your policy, be sure to include this information in your quote requests.
Be sure to note whether the quote is an apples-to-apples comparison to your current coverage. If there are any differences in coverage types and/or limits, take that into consideration when looking at the premium.
Now that you have other quotes in hand, contact your current auto insurance provider. If one insurer offered you more or different discounts, ask your insurance company about a similar discount. Your insurance might be willing to match your lowest-priced offer just to keep you as a customer.
Now it’s time to look beyond the premium. Do research to learn about the company’s customer service, reputation, claims process and other important factors. Compare it to what your current insurer offers.
If you’re going with a different company for your car insurance, you’ll want to establish a new start date for coverage. You can switch insurance anytime, you just need to coordinate coverage dates to ensure you avoid any lapse in coverage.
Once you’ve set up your insurance with the new carrier, you can cancel your old policy. If you are switching insurance and your policy isn’t up for renewal yet, typically your insurer will just send you a refund for any payments you’ve made that go beyond your cancellation date.
That’s it, you’re done! Sit back and enjoy your new insurance knowing that you’re protected - and saving money.
Though switching insurance providers is a relatively straightforward process, there are some pitfalls that you should be aware of.
Not enough coverage. One common mistake is buying insufficient coverage. Your provider should ensure that your new policy complies with your state’s minimum coverage requirements, but do not make assumptions. Be sure to review your quotes and final policy paperwork. You also should explore the benefits of buying additional coverage for added protection.
Lapse in coverage. Another mistake is having a gap in coverage because the new policy’s effective date is after the cancellation date of the existing policy. Confirm all dates with your old and new providers before finalizing your plans.
Only looking at price. You also should avoid making a coverage decision based only on price. Some people have been thrilled to find incredible savings, but they learned after the fact that the new insurance provider had a horrible reputation for increasing rates dramatically or for having a slow claims process. Base your decision on all relevant factors to make a well-informed switch.
Switching car insurance could save you money each month. The best way to determine if you qualify for a lower car insurance rate is to shop around. Arm yourself with the tools and knowledge to make an informed decision on getting the right car insurance.