The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.
This is the third installment of a series of articles about Auto Insurance. You may want to read Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have and Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart before reading this article.
Okay. You understand what you have and you’ve shopped smart. Now it’s decision time.
Here are some things to consider as you look at the quotes.
1. These are only quotes. The insurance company is under no obligation to give you the rate quoted if you aren’t eligible for it, even if you get a binder of coverage. If the agent made an error, or if you forgot to tell them something that would affect the rate, the policy could be canceled or you could be offered a policy at a higher rate.
2. Make a decision well in advance of your own policy cancellation. If you’re switching companies get the new policy written as soon as possible. Most companies will allow you to do the policy 30 days in advance of your current policy’s expiration and have it be effective on the expiration date. That gives them and you 30 days to decide if you really, really like each other.
3. Don’t tell your old company you’re not renewing until after the new policy has been issued as quoted. That way if there is a problem you can continue with your current policy and the only things you’re out is your time and aggravation. If your old company does not give a grace period make sure you don’t have a lapse in coverage.
4. Longevity counts. The longer you are with a company the more favorably they’ll look upon you, and that translates into savings. Some companies will “forgive” (not raise your rate or cancel you) for a first accident if you’ve been with them X number of years. Some will reconsider cancellations for multiple claims. I’m not suggesting you stay with your original company if you’re going to save a considerable amount of money, but decide for yourself how much of a savings is worth losing the benefits of longevity.
5. This isn’t a one shot deal. Even if you can’t save a bundle this time, try again in six months, or a year, or when it’s been three years since your last accident or ticket. Just like medical checkups keep you abreast of your physical health, insurance checkups should be a part of your financial health plan.
Another thing. I did speak in Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart about how rates are cyclical. I wanted to bring it up again because I cannot tell you how many times people would cancel policies with us to go to another insurer, only to come back six months later because the company had raised their rates significantly. They didn’t always qualify for the rate they had enjoyed with us before. Now you can’t plan for everything, but this again is another reason you have to decide the magic number that makes a switch worth the risk. To you.
Even if you change nothing, you know more than you did. That’s almost always a good thing.