Car Insurance: 5 Steps To Changing Companies

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Are you a creature of habit? Have you been with the same insurance company for years? If so, it may be time to reevaluate the company you are with. Before you pay your current premiums, follow these simple steps to decide if you are in need of a change.

1. Shop Around

There are tons of insurance companies out there. Take the time to look around and see which one will fit your needs and budget the best. A good time to start researching other companies is when you move, purchase a new vehicle, or a couple months before your policy needs to be renewed. Get at least three rate quotes so you can make an informed decision.

"A lot of us are creatures of habit. I've been with the same company since 1983," said Melvin Butch Hollowell, a Detroit attorney. "But if you shop around, it literally could save you anywhere from 5 to 50% a year."

2. Contact Your Current Carrier

Talk to your current insurance company. More times than not, if a company thinks they will lose your business, they will offer discounts and try to match the competitors quotes.

3. Find Out If There Are Any Penalties For Changing Companies

If you decide that you will want to change companies, make sure that your current company does not have penalties for cancelling your policy early. Most companies give their customers the right to cancel their policies at any time. However, they do ask that you give them significant notice.

4. Investigate The New Company

Before paying the premiums, check the customer complaint ratios. Find out what other customers think about the company and if they have had good experiences with this company.

"Typically people file complaints because of claims payments," Deeia Beck, the state insurance consumer advocate in Texas, said. "You want to be sure other people are happy with the way they resolve complaints. You want to know if your claim is going to be paid. Is it going to be paid timely? Is this a carrier that's likely to say it's your fault if you're in an accident?"

5. Watch For The Gap

If you change companies, make sure that there will not be a gap in coverage. If you were to have an accident, during the gap, it could cause serious legal and financial strains.

Image via Wikimedia Commons

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