How to Save Money by Changing Your Car Insurance Policy
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UPDATED: Aug 13, 2020
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Did you just get a car insurance renewal notice in the mail? Are you thinking about canceling your auto insurance because your insurance premium just went you up? You are not alone. Many consumers are looking for ways to save every penny, and cutting costs by changing your auto insurance coverage can help you. Below you will discover how asking a few good questions when deciding to change you car insurance policy could mean big savings for you!
Using Renewal as an Opportunity to Review and Change Your Car Insurance Policy
Like every contract, your auto insurance policy will expire after a certain period of time. When that happens, you have an opportunity to save money on car insurance by attempting to renew at a lower premium or change your car insurance plan. The process of renewing your car insurance can be done very easily and quickly, and if you do not take the time to properly review your current auto insurance policy beforehand then you may miss a chance to get a cheaper policy by adding car insurance discounts or finding other ways to reduce your premium. When you are facing a renewal, take the time to do the following:
- Know when your renewal is, and take action at the right time: if you try to cancel or change your auto insurance plan after the time to renew has passed, you may have to a pay a fee
- Know what you pay for: Read your current auto insurance policy, and have copies of your bill so you can identify what you are paying for and ways you can cut your costs.
- Get some auto insurance quotes prior to your renewal: Take some time and get auto insurance quotes so you can see if renewing with your auto insurance company is your cheapest option. You can also use some competing auto insurance quotes to get a lower price out of your auto insurance company.
- TIP: Make sure the auto insurance quotes you are using as a comparison offers the same type of auto insurance coverage you want out of your policy when you renew it, otherwise the comparison is not valuable.
- Don’t get attached to an insurance company: Insurance is always about money. Your insurance company evaluates you based on how likely you are to be profitable to them by paying your premiums and not filing a claim. They do not evaluate you (or the cost of your policy) based on how well you get along with one of their agents.t
- TIP: The other side of the money is how difficult your insurance company makes it to file a claim or collect a fair settlement. Do some research online to see what companies have the best claim payout service, and factor that into your decision.
Canceling Your Auto Insurance
So you have done your homework and decided not to renew your auto insurance, because you found a new insurance company that is offering you the same coverage for a lower premium. Canceling your old policy is simple – call the present carrier or agent and advise them you would like to cancel your policy. Always follow this phone call with your request for cancellation in writing.
Canceling your Auto Insurance Policy Early
If you are canceling your present policy prior to your auto insurance renewal date, you could be hit with a short rate penalty. This penalty could be as much as 10% of the remaining premium left on the policy just for canceling your policy prior to its renewal date. If the overall savings for your new policy is far greater than this penalty, changing mid-term makes sense. Changing policies for a savings of $70 over six months with an early cancellation penalty of $90, however, may not make sense. In this case, wait for your renewal date and then make the switch. If you are canceling your car insurance policy prior to your renewal date, make sure you know of any fees your old company will require you to pay.
Insurance Company Non-Renewal
If you have received an auto insurance non-renewal notice from your insurance company, they are notifying you that they will not be renewing your auto insurance policy on its scheduled renewal date. Non-Renewal is the insurance company’s way of canceling your auto insurance. This could happen for various reasons—too many tickets, accidents, a youthful driver not reported in your household or the company themselves have decided not to provide coverage to your county or state. Whatever the reason, you will be without auto insurance unless you secure another auto insurance policy by your renewal date
Whether you are choosing to cancel or renew your auto insurance policy at the end of its term, take the opportunity to get competing car insurance quotes. The end of your auto insurance policy can be a chance for you to get lower premium payments going forward. Click here to find a cheaper policy by shopping for car insurance quotes online.
For more information about getting the right car insurance policy to fit your needs, check out the following articles:
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