Switching car insurers
Whether you're moving to another state, getting rid of your car altogether, or maybe you're just dissatisfied with your existing company's service, ensure you terminate your existing insurance policy properly. If you don't, it could end up costing you money, or negatively affecting your credit history.
Why switch to a new insurance company?
Regularly
review your car insurance coverage to make sure that you're receiving
the best insurance value for your money. You'll discover that it pays to shop around.
In some states, premiums for identical policies vary widely among
different companies. The reasons for this price variation can be very
complicated, but they boil down to a company's claims experience with
policyholders in your coverage group (e.g., people of similar age,
number of accidents, type of vehicle). For example, if a large number
of people in your coverage group file claims during a given year, your
rates will likely rise. When this happens, better discounts and lower
overall premiums may be available at other companies, although some
states strictly regulate the price of coverage. When you decide to
switch your car insurance to another company, you'll find that it's
fairly easy to do so.
Be sure to get a new policy first -Coordinate switching dates
Always
have a new policy in place before canceling your old car insurance
coverage. You don't want to have a gap in protection for even one day . If
you're switching to another insurer, and you plan on driving your car
throughout the process, you want to make sure there is no lapse in your
coverage. Therefore, be sure to coordinate the effective starting date
of your new policy with the termination date of your old policy. The
last thing you want is to get in an accident during an uninsured
interim.
As long as you are considerate about giving your insurance company plenty of notice when you want to cancel your car policy, and then go through the official termination process, switching a car insurance policy is simple.
When to switch policies
The best time to switch
car insurance companies is just before your old policy is about to
renew. This will allow you to avoid paying for printing and start-up
expenses the company incurs as part of the policy renewal process. You
also avoid the inconvenience of figuring out the amount of any unused
premium that should be returned to you.
How to cancel your existing policy?
Generally,
all you need to do to cancel your auto policy is to inform your
insurance company in writing, specifying the date you want the policy
cancelled. Standard practice for most insurance companies is to allow
you to cancel your policy at any time during the policy term by sending
written notice stating the date of cancellation.
What are the implications of just lapsing my policy, is that sufficient? If you don't pay your policy at renewal time, your policy does not necessarily terminate at the end of each policy term. If you don't send notice of cancellation, your insurance company will automatically bill you in advance for the next term's premium payment. If you fail to pay and notify them, the insurance company may cancel your policy and it may go on your credit report that you failed to pay.
Don't expect this information to be made explicit in your policy; while insurers are quick to inform you that your coverage will terminate at the end of the policy period if you don't pay your next premium, they don't always inform you of the repercussions you may face for not giving formal notice of your policy termination.
Lapsed policy may impact risk profile. Another thing to keep in mind is that allowing your insurance policy to be canceled may hurt your chances of obtaining car coverage in the future. A cancellation in your insurance history may cause other companies to label you a high-risk applicant, thus giving them an excuse to charge you a higher premium. However, you can usually avoid this trap by officially terminating your policy in a timely manner.
Here's what to do:
- Call your insurer, let them know that you want to cancel your policy and give them an effective date.
- They will then send you a cancellation request form - review this form carefully before you sign and return it to your insurer.
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Posts: 85532
Reply #85490 on : Sat July 31, 2010, 01:02:26
Posts: 85532
Reply #85489 on : Sat July 31, 2010, 00:45:21
Posts: 85532
Reply #85488 on : Fri July 30, 2010, 17:16:28
Posts: 85532
Reply #85487 on : Fri July 30, 2010, 16:49:35