More often than we think, the idea of comparing policies from different providers and eventually switching car insurance companies comes to the mind of the vast majority of drivers out there. Even when this might sound like a time-consuming task, it might be worth the effort, as contrasting and matching rates could help us find a car insurance policy that suits our needs. However, we must be careful during this process, and these are some common mistakes you should avoid.
One of the most important aspects of switching car insurance companies is confirming what our new policy will really cover. Some companies tend to offer lower rates than our current ones, but we might be getting less coverage, hence the reduction of rates. It is important that we take the time to compare both policies and make sure we are getting the same or more coverage than before. Reviewing rates, deductibles, coverage types and limits, and premiums will help us make sure we are choosing the right policy for our vehicle.
Another aspect we must be aware of is the dates on which our previous policy will end and when our new one will begin. Leaving a coverage gap could represent a significant risk, especially if we have an accident during this period. Being without insurance when we have a car accident could be both dangerous and expensive. Besides having to cover for our liability expenses from our own pocket, we could face large fines, suspension of our driver’s license, and even jail time.
There are some car insurance policies that require an upfront payment before actual coverage takes effect. In those cases, we might be eligible for a refund and we must make sure if we qualify for one or not. For example, if we paid for a 12-month policy but only had it for a 9-month period, the insurance company should reimburse what corresponds for the remaining three months of coverage. Just remember to read your policy and look for any cancellation fees or exceptions in the terms and conditions. After all, every insurance company works differently, and you might not qualify for a reimbursement in case of an early termination.
Last but not least, a common error policyholders tend to make when switching insurance companies is failing to cancel their previous policy. Ideally, we should receive a written confirmation when we terminate our insurance policy. However, not all companies may provide you with one, which could have a negative impact on your credit score. If you continue receiving bills from your previous company and you stopped paying the corresponding bills after requesting a cancellation, they could report this as a failure to pay them, and this is the last we want in our record.