If you've ever compared car insurance comparison quotes, it's likely you've been tempted to change carriers. Given the competitive nature of the business, you can almost always find a better rate. However, if you're entering the new year with new car insurance be careful to avoid these mistakes when switching policies.
Before you agree to buy a policy, make sure the coverage types, liability limits, and deductibles meet your expectations and state laws. Of course, this means you'll have to read and understand your current policy so you can compare coverages.
Depending on the amount of time left on your current policy, you may be entitled to a refund when you switch plans. If you change carriers with a few months left, your old company might be able to reimburse you for the months you didn't use. However, this only applies to customers who paid for their coverage in upfront. If you paid several months in advance and change insurers, always ask for a refund for the coverage you didn't use.
The whole point of switching insurance companies is usually to lower your premium. However, if you already have a policy and don't cancel your current one, you'll have double coverage. But double coverage doesn't mean double protection. You won't get payment from both policies for the same incident. Further, it could come across as an attempt to commit insurance fraud. This is referred to as unjust enrichment and can be prosecuted in criminal court.
Sometimes people just forget to cancel their previous policy, which could lead to a credit issue. If you don't formally cancel (in writing), the current company assumes you're still their customer. If you just stop paying, it could be difficult for you to get an affordable insurance coverage plan in the future.
In most states, if you're ever stopped by a police officer, one of the three things they ask for is your insurance card. If your old policy lapses and you don't have a card for the new one, the responding officer will write up a citation. This could be a real problem if it happens outside of business hours and you can't contact your insurance agent. In some states, you'll pay a fine or be forced to attend traffic court to prove you had coverage.
This will occur if your current policy expires at noon today and your new policy starts at noon tomorrow. While the possibility of an accident during that time period is small, it does exist. Always time new policy to begin the moment the original old policy ends.
These tips will help you avoid the six most common mistakes people make when switching car insurance. If saving money is your thing, CoverHound can help you find the best car insurance quotes for your budget. Best of all, it's free to compare. Try it today!
Insurance shopping simplified
Insurance shopping simplified
