8 Circumstance when You should Change your Car Insurance Company

It is essential to have car insurance if you have a vehicle. If you don’t have one, under Indian law, you can’t operate your car in the country. But it is for your own good. In case of a traffic mishap or accident, car insurance will pay for your damages.

There are times, however, when you may find it necessary to change your motor insurance company. At such times, it is recommended that you do as you’ll get better offers, better coverage and better all-round benefits. For this reason, it is recommended that you monitor the market for better car insurance offers. Always compare the insurance policies of different companies. This is most important when your financial situation has undergone a change.

The process is very simple, and can be done at any time. You don’t need to wait for the current insurance policy to expire. When you are about to change insurers, think about your requirements, as well as your eligibility to get discounts. Here are the circumstances where you may want to make a switch.

When you may want to switch your insurance provider

1. Change in marital status: There are some car insurance companies that offer lower premium rates for car insurance when the insurance holder is married. At such a time, compare and contrast the car insurance products of different companies to pick the best one.

2. Home ownership: Some companies are ready to give a lower premium rate if you have become a homeowner.

3. Change in residence and employment: Car insurance companies give you lower rates for these as well. The thing is if your place of work is closer to your home, you’ll be using your car less. Thus, it shall be safer from problems. Some professions bring better insurance premium rates as well.

4. Age and experience: At certain ages, you can get better vehicle insurance premium rates since insurance companies regard people of these age safer drivers. Additionally, if you have been driving safely for 5 years continuously, you can get lower premiums as well.

5. Increase in premium: If your current motor vehicle insurance company has started charging you more premiums, it can be a time to change companies. At such a time, explore better options. Many companies shall offer you lower rates to make you their customer.

6. Cashless garages: Current car insurance companies do not have a good coverage of cashless garages? Change the insurer and find those who do. Cashless garages can be a lifesaver when there is a road accident and when you need to get your car repaired without physical cash.

7. Add-on benefits: Maybe the add-on benefits are no longer suited for you, and the current insurer is not able to give anything better. If so, change the company to one that can do so.

8. Customer service problems: This is a big reason to make the switch. Your current motor insurance provider has a horrible customer service? Switch to the competitor. 

How to switch your car insurance to another company?

 If you have decided to switch, here’s how to actually do it.

1. Compare policies: Compare the products and services of various motor companies. Don’t rush the decision. This shall give you a good idea of all the products in the market.

2. Tell the current insurer about the change: Do tell your decision to your current insurer. It may happen that the current company will start giving you better premium rates because they don’t want to lose a customer. If that’s not happening, so make the change. 

3. Check for policy switching penalties: Some insurers charge a penalty for switching. Before changing, check how much you’ll owe them. But as long as you give a sufficient notice period, very few companies shall charge a penalty.

4. Consider the future company: Make sure the new company is worth going to. Is its policy features indeed better? What about benefits and ad-ons? Are their hidden charges? Will the premiums get hiked after a few years? Is the company reliable? What is its success rate? Think of all these before switching. 

5. Don’t switch if there is a gap in insurance payments: If such is the case, don’t switch now. Doing so shall only bring financial and legal problems from the current company, especially if you were in a car accident. Don’t cancel the policy before the start of the new plan. Because of breaks in payment, even the new company may charge you a higher premium.

6. Make sure the old policy is cancelled: Get a written confirmation from the current insurance company. This protects you if the current company continues to charge premium, and protects your credit history since the company will no longer report non-payments to the credit bureaus.

7. Do not raise a claim on the new insurance policy: Don’t raise a claim if it is less than 90 days old. Even new insurers can drop you for doing that. Don’t miss premiums either.

You have multiple choices when changing your insurance provider. But explore all the options. Only then you can find the ideal solution. Also make sure that you are not at fault when searching for a new insurer.  

What to do when applying for a new car insurance policy

1. Be honest: Give the new insurance company all the necessary details and all the needed documents. If you withhold information, your insurer will find it out most likely. This shall only bring you higher premiums and even claim denial.

2. Drive safely: Don’t raise claims if the policy is less than 3 months old. If you do, the new insurer can even drop you off and deny any service. For this reason, it is important to drive safely, especially in the first few months of getting new car insurance coverage.

When to inform the current insurer that you’ll change to another company?

You should inform your current car insurer about your decision to make the change as soon as possible. Most companies need a 30-day notice.

Doing so has several benefits. For one, prior intimation of your decision will give the current insurer enough time to give you better benefits to keep you as a customer. Secondly, if you have been a good customer so far, you may get a better deal. If the company gives you a better deal than a potential new company, you can rethink your decision to change.

What about cancellation charges?

If any, the cost is minimal. You don’t need to pay anything to switch.

If the policy cancellation is in mid-term, your current insurer shall be reimbursing your premium paid on a pro-rata basis.

All that you need to be careful of is the coverage gap. You don’t want to cancel the current policy and go over to the new one with a coverage gap. It brings heavy penalties. 

Are there any disadvantages of changing insurers?

There may be some downsides, like:

1. When switching, you may miss out on loyalty discounts.

2. You may lose out on bundle discounts when you make the switch.

3. It’ll take time to build a relationship with the new insurer

Thus, it is prudent to know about the pros and cons before switching insurers. 

To conclude, you have many choices when switching, and staying loyal to just one insurer may not be the best option either. If your decision to move is concrete, remember to have a healthy driving history, to know your current insurer in advance, and to avoid having breaks in premium payments.