Do you feel it is not necessary to review your policy and continue with the existing insurance company for years? Have you ever thought that it would have been better for your budget if you would have to pay less on your car insurance policy? if you've answered Ã¢yes' to any of the above questions, then it is the time for you to think about swapping your old insurance policy with a new one.
Here are 7 steps which you need to follow in order to switch your existing car insurance policy with a new one without any hassle.
1. Examine your present driving situation
When you decide to switch your car insurance policy, the first thing you need to take into account is your present situation. This is because your coverage needs might have changed which require you to shop for a new policy. It might be that you've bought a new car, number of drivers on the insurance plan have increased or decreased, you've got married, there's a new member in your home, etc. for which you need to evaluate your coverage requirements. Along with this, you also need to consider some other things, such as, whether or not you've received traffic tickets recently or how many miles you need to drive regularly. As per NAIC (National Association of Insurance Commissioners) any new potential insurance company will ask you these questions. Actually, these type of questions are a part of the underwriting process.
2. Call your present insurance company
Before you start shopping for a new policy, you need to find out the reason behind your switch. Do not start looking for a new policy only because of high premium, then you should at first call your insurance company. Your policyholder might agree to adjust your insurance premium based on certain life changes which may affect your policy rate or it might be you have qualified for certain discounts.
Also check out whether or not you can reduce the cost of your existing policy just by amending your policy. For example, you might drop certain coverage, which you bought when your car was brand new.
3. Gather basic information about car insurance
There's one more thing which you need to consider before you start shopping for a new policy. You need to calculate the potential cost of replacing your old policy with a new one. For example, there may be coverage gap or a fee you need to pay for cancellation. Therefore, when you call your insurance provider and the company representative doesn't agree with lowering the cost, then ask him/her is there's any cancellation fee you need to pay, if you no longer wish to continue with the policy. Also, keep in mind to activate your new policy before the current policy gets cancelled. It is illegal in certain states to drive without any coverage; even if it's not in your state, you should consider the gap for your own benefit.
4. Shop around for a suitable policy
It is true that a relatively low-priced policy entices you but be careful to not sacrifice quality in order to reduce price. If you only look after the price of the policy, then you may end up buying less coverage or might put yourself into high risk. So, while searching for a good policy, check out the following things.
- The financial strength of the company should be good
- Mention discounts you are eligible for
- Make sure the company offers 24/7 support
In addition to above, make a list of priorities which is essential for your policy. Also, compare at least three companies before you finalize on the policy.
5. Do not compromise on the coverage
When you make the decision which policy to go for, make sure you compare cost with the coverage offered, so that you know that you're well covered. One of the best ways to reduce the cost of your policy is to opt for a higher deductible. By doing so, you know that you'd have to pay the money if you need to claim insurance; otherwise, you'd save dollars. In addition, go through the terms and conditions carefully to be sure that you've chosen the most suitable policy.
6. Inform both your insurance providers
Once you decide about the new insurance policy, at first, you need to inform your new insurance company that you've decided to purchase the new policy from their company. Then, as soon as they mail the documents, go through the terms and conditions again in order to avoid unpleasant surprises later. Then, you need to cancel your existing policy and get a receipt of transaction or case number which you can refer to later, if required. If you cancel your policy prior to the expiry date, then you might get a certain portion of premium refund, though it depends on the terms and conditions of your agreement. It is advisable you continue making payments for your existing policy until you get the confirmation in writing.
7. Print your new identity card
After all these, there's one last thing you need to do. Remove your old policy card from your purse or car and keep the new one. It is always better to keep one in your purse and a copy of it in your car, so that you can refer to it if necessary.
It requires mention that you should review your car insurance policy from time to time so that you pay for the exact coverage which you need. This is because situation changes and so does the coverage requirement. So, always make sure that you have the right coverage and you pay the required amount and not waste your hard-earned dollars.