Is It Time To Switch Insurers?

It's much easier to research car insurance companies today than it was a decade ago. A quick search online will uncover customer reviews, rate quotes, and a host of other useful information. Yet, old habits persist.

It's easier to renew than any alternative, so many drivers often settle rather than uncovering a better deal. As a result, a lot of people end up paying higher rates than necessary, often for lackluster service. This and other frustrations have driven many consumers to break up with their auto insurers. After a little due diligence, they often find lower rates or a better package of coverages at competing companies.

Lets take a look at why many consumers decide to move on to a different insurer. You may find that your insurer is failing to perform in the same areas.

Lower Rates For The Same Coverages Elsewhere

Policyholders who have been with the same insurance company for years often believe their loyalty will be rewarded. They assume they will receive the lowest rates possible when they renew their policies. Unfortunately, such thinking is optimistic. Insurance companies recognize that most consumers don't have time to look for a more competitive rate. This means there's very little impetus to extend the lowest premiums.

Since you know when your policy will come up for renewal; you should do some cost comparisons before each renewal. If you assume you're getting best deal possible, there's a good chance you're not.

A History Of Slow Response To Claims

Many companies make it difficult for their policyholders to receive compensation after filing claims. For example, they might argue that the event for which you're seeking benefits (e.g. a fallen tree) is not covered. Or, if you are clearly due compensation based on your coverages, the insurer may delay mailing payment. These shenanigans can occur at both large and small companies, causing needless headaches for policyholders.

If you have experienced similar frustrations after filing a claim, it may be time to part ways with your insurance company. The car insurance marketplace is very competitive, and many other companies would love the opportunity to provide you with coverage.

Inability To Get Important Questions Answered

Have you ever called your insurance company with questions, and felt discouraged - or even annoyed - at their responses? Perhaps the service representatives were rude or otherwise unprofessional; maybe they provided information that was clearly inaccurate; or, you might have had difficulty getting anyone to answer the phone. These are common complaints among consumers. Many become so dissatisfied with the service they receive from their insurers that they end the relationship in order to find a better option.

If you believe your insurer isn't providing an acceptable service level then it's time to move on. A lack of willingness to provide helpful information suggests you'll experience similar issues when filing a claim.

Lack Of Options And Flexibility

Some insurers offer more flexible coverages and more generous discounts than others. At first, both may seem unimportant, especially if you already have the coverages you want. But a lot of consumers need room to grow. For example, they may have children who are reaching driving age, and need an insurer that can accommodate them at a reasonable rate.

Consider whether your insurer can meet your current needs as well as those you may have in the future. If they are unable to do so, it's time to start looking for another company.

The Right Way To Leave Your Auto Insurer

After you make the decision to break up with your insurance company, you'll need to formally cancel your policy. Don't simply stop paying premiums. If you do, your insurer may terminate your policy due to nonpayment, and report the event to the credit bureaus. Instead, send a written notice of cancellation once you have a new policy in place. Include the date you want your old policy cancelled (choose the day following the start of the new policy). It's also a good idea to call your insurer to confirm they received your cancellation notice.

If you believe you're getting good value with your present insurer, then you should absolutely stick with them. But most people stay simply because they neglect to look for an alternative. Comparison shop between insurance companies to make sure you're receiving the best possible deal.


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Kade Phillips has been watching the insurance industry closely since his retirement several years ago. Phillips is a retired insurance broker, and believes that all of the choice available to consumers nowadays represents a fundamental shift in the auto insurance industry. Visit the Kanetix forum for questions and answers to insurance dilemmas.