One question we hear a lot is “When should I consider changing insurance companies?” That’s followed up by questions about fees and risks associated with the change. One of the major reasons why people consider changing insurance companies is if they find a better rate. Perhaps, because they found out how much they could save by requesting a quote through isure! The answer to that question is complicated though. There are risks that come with changing insurance companies, mostly financial in nature.
Risks of Changing Insurance Companies
The major risks associated with changing your insurance come down to loyalty, and fees. The major benefit of staying with your current insurance company is that they will likely offer you a loyalty discount. Those discounts can range from 1% all the way up to 25% if you’ve been a long-term client. If you’ve been in accidents, your insurer will consider loyalty when deciding on insurance renewal. If you’ve been in accidents, and you’re with a new insurer, they will likely not renew.
The second risks that come with changing insurance companies are fees and future pricing. To cancel an existing policy, you may need to pay a fee. That fee can range to a flat rate per month you are canceling early, to a percentage of the total remaining insurance. As for pricing, some insurers offer low rates in the first year but they go up in the second. That’s a risk you take.
Finding a New Policy
If you still want to find a new insurer, the first thing you do is get a quote from isure. We’ll compare the rates of the best Ontario insurance companies to find you a great policy for the best price. You’ll then be able to pick whichever insurance company you think is best for you and your needs. If you have any questions, an isure registered insurance broker will be happy to help you out with independent insurance advice!
Cancel your Old Policy
When changing insurance companies, you need to cancel your old policy. The safest way to do that is in writing, as it’s certifiable if you had any legal issue. When writing it, you need to let them know which day you want to cancel the insurance. If you are waiting until your policy renewal date, it is much easier and comes at no cost – simply decide not to renew. If you cancel an insurance policy early, you may be required to pay fees at a set rate per month or an overall % of the remaining policy. When deciding on an end date for your policy (if canceling early), make sure your new car insurance policy starts on or before that date.
Switching Car Insurance Myth
Let’s say you decide not to renew, or cancel your current insurance early and NOT get a policy to replace it immediately. That leaves a gap in your insurance history. There’s a common myth that an insurance gap like that will impact your car insurance rates. If the gap was because you opted to not drive for weeks/months – most insurance companies will not hold that against you. That said, if the reason for a gap was a suspended license or failure to pay, that will affect your premiums.
If you ever have any insurance questions, don’t hesitate to call, email or chat online with one of our insurance brokers. We are available 24/7 to assist you with finding the best insurance!