Whatever the reason for switching auto insurance policies, there are a few things to think of before switching from the old auto insurance company to a new one.
For starters, make sure, without a doubt that the new auto policy is bound and in force. Be sure to obtain written confirmation as proof that coverage is in effect. With today’s technology, it is quick and easy for an insurance agent to fax or email proof of coverage.
Once the proof of auto insurance coverage is in hand, the next step is to request the old auto insurance company to cancel coverage. When requesting the cancellation, make sure to provide the old auto insurance carrier with the new insurance company name and policy number. Insurance companies are required, by law, to notify the Department of Motor Vehicles if there is a lapse in coverage. By providing the new auto insurance carrier’s name and policy number, the old insurance company does not have to notify the DMV of a lapse or gap in coverage (such a gap in coverage can be costly to the policy holder).
Now that the new coverage is in effect and the old auto policy is cancelled there are still a few bookkeeping and paper trails that must be taken care of. The amount of paperwork depends upon when the policy was replaced.
End Term Auto Policy Renewal
If the automobile insurance policy changed carriers at the end of the policy term, the paperwork is very much similar to a normal auto policy renewal. The policy holder must obtain new insurance ID cards, insurance policy and invoice for premium payment.
The only change would be to check the policy to ensure the coverage terms and conditions were bound as specified and that the lien holders (if any) are correct.
Mid Year Auto Policy Replacement
An auto insurance policy that was replaced mid-term comes along with a little more paperwork than an annual policy renewal. In addition to the usual renewal checklist, below are a few things to keep in mind when initiating a midterm auto policy replacement:
- Insurance ID Cards: Because the old insurance company did not run its full policy term, the auto ID cards that are sitting in the glove compartment will show a current policy term. Make sure to discard the old insurance cards and replace them with the new ones. Don’t wait until an accident to realize the insurance ID cards are incorrect.
- Cancellation Endorsement: Follow up for the cancellation endorsement from the old insurance company. Submitting a cancellation request is not the same as a policy actually being canceled. Make sure to receive the policy cancellation endorsement.
- Auto Policy Return Premium: The last item to follow up for from the old insurance company is the unearned premium. Be aware, however, that some insurance companies will apply a short rate cancellation factor. Short rate cancellation incorporates a penalty for early policy cancellation. The penalty may be as much as 10%. Therefore, instead of receiving a pro rata return for the unearned auto premium, there may be a 10% surcharge deducted.
Best Car Insurance Companies
Commercial breaks in television are often loaded with advertisements that claim that certain companies offer the cheapest insurance on the market. However, different companies treat different clients in different ways, depending on a number of factors and the components of particular plans.
Cheapest Auto Insurance Companies
It is relatively true that large agencies do offer some of the cheapest car insurance quotes, even though a number of conditions impact individual policies. Driving history, location, age of the client, and car statistics are all considered in insurance policies.
Some of the major agencies include Geico, State Farm, Progressive, Esurance, 21st Century, AAA, Liberty Mutual, Nationwide, and Allstate, and because of their size and the constant business that these firms receive, they are usually able to offer lower car insurance rates than smaller firms are. One of the best characteristics of these companies is their ability to offer quick quotes that do not require office visits, as online quotes and over the phone quotes are available.
Attributes of Some of the Best Car Insurance Companies that are Larger Agencies
Coverage plans that come from larger agencies often have certain advantages, although many people prefer smaller, more local automotive insurance businesses. Following is a list of the major attributes that large agencies have to offer:
- Access to specific quotes is quick and easy, and quotes may be received after a simple phone conversation, or after a short website visit. There is also absolutely no sense of commitment after potential clients receive quotes.
- Many larger agencies offer package deals when people decide to cover multiple vehicles, or receive other types of insurance from the same agency in single policies.
- Large agencies are very technical, and usually reward drivers directly for spotless, great, or improving driving records by lowering rates.
- Large agencies will often show potential clients the lowest quotes available (with their company, or with others), meaning that it is in their interest to provide the lowest quotes for coverage so that people will rely on their agencies for coverage.
- Support at large agencies is often very direct and efficient at reviewing certain issues. As Allstate has revealed in one of its latest advertisement campaigns, the company’s agents will work with previous agents of clients when someone decides to switch to Allstate, so that new clients do not have to deal with the specifics of switching agencies. Most technical issues may be dealt with without the involvement of the client at major insurance businesses.
Factors that Influence Rates
To receive the lowest rates automobile insurance, switching agencies every so often may be necessary. There are also certain factors to consider when setting up policies that can impact rates. Setting a high deductible (the amount paid out of pocket when involved in an accident) will be more costly for someone who is involved in multiple accidents, but it usually lowers insurance premiums.
Therefore, setting a high deductible may be a good idea for a person who does not anticipate many accidents, as money will be saved over time because of lower rates. Also, some of the best car insurance companies will help clients select policies, which may not include all types of coverage for automobile driving and maintenance. For instance, many of the best auto insurance agencies will tell clients that collision coverage may be more costly than it is worth for people driving old cars.
Although clients do not get the local feel and support of a small business when working with large insurance agencies, there are offices for large agencies in many cities and towns where clients may receive personal service from the agents of their insurance providers. Small insurance businesses may at times have higher rates, but direct, personal relationships between clients and agents are very likely, and at times, rates are competitive.
As many states have hundreds of agencies, individual policies are sure to vary from person to person and place to place, so educating oneself about the industry is an important part of finding the best car insurance companies.