Avoid buyer's remorse and surprise fees when switching providers

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By Mary Lou Jay

Are you contemplating switching to a new auto insurance provider? Maybe you think that your rates have gotten too high, or you're not happy with the service you've received when you've had a problem. Whatever your reasons, follow these steps to ensure that you're happy with your decision when you change your auto insurance provider.

Choosing a new provider

  • Compare your current policy and the policy you're considering to determine similarities and differences in the policy limits and coverage. They can be subtle, so if you're not sure of something, ask for clarification. Be sure that the auto insurance you're thinking of buying is the equivalent of what you have now. If you've chosen comprehensive coverage on your current policy, for example, you'll want to make sure you've selected that option for the new policy.
  • Consider any special circumstances or special needs you have. If you travel frequently with pets, you'll want to know whether the new policy has protection for your four-legged friends. Progressive, for example, includes $1,000 of pet injury coverage when you buy collision insurance, but many other companies simply lump pets in with personal property.
  • Ask about the costs of optional coverage you may want, like mechanical breakdown insurance or emergency roadside service.
  • Check out the ratings of the insurance company that's offering the vehicle coverage you're considering. Some states (Missouri and Ohio, for example) keep databases of consumer complaints about insurers. Other good resources for evaluating insurers include A.M. Best and the National Association of Insurance Commissioners.

After you've made your decision

  • Make sure that your new coverage is in place before you cancel your old auto insurance policy. In some states, you can be penalized financially if you let your coverage lapse for even one day.
  • Cancel your current policy formally by calling the insurance company or your agent and saying when you want to end the coverage. Ask whether there are any forms that you should fill out; if there are, make sure you complete and return them promptly.
  • Time your cancellation carefully. In some states, auto insurers are allowed to include "short rate" cancellation provisions. Instead of sending you a full pro-rated refund when you cancel a policy, the insurer may charge you 10 percent or more of the policy premium as an administrative fee, according to the Oregon Insurance Division. To avoid short rate charges, cancel your policy within 30 days of its renewal date.
  • Don't just stop making payments on your old policy without notifying the insurance company. If you do, the insurer will cancel your policy. That could affect both your credit rating and your ability to get vehicle insurance in the future, according to Edmunds.com.

Once you've switched insurers

  • Destroy any insurance cards from your old insurer and replace them with the cards from your new company.
  • Drive safely so you can keep your auto insurance rates low.

See how much you could save today on your car insurance. Get your free auto insurance quotes today!