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In Canada, it is mandatory to have “vehicle” or auto insurance. But, as we’ve seen over the past couple of years, how much we use our vehicles has changed greatly. Many people are becoming more proactive when it comes to spending their money on necessities, and vehicle insurance is one of these. With many different car insurance companies vying for your business, should you consider switching? Here is everything you need to know about how to switch insurance companies, and if you should or not.

Can I switch insurance companies?

Yes, it is possible to switch companies as Ontario’s system is private, yet regulated by the provincial government. Privatization means you can change to any insurance provider at any time. Still, regulations mean they all have the same minimums. The minimum car insurance in Ontario is $200,000 for third-party liability, in case you injure someone or something.

It is quite common for people to switch their insurance carriers. Customers shop around to find better coverages and pricing for their home, their car or condo insurance. That’s where an insurance broker, like isure, can be beneficial in acquiring multiple quotes from different insurance companies for you. When comparing insurance quotes, it is important to be sure you compare the same features on these policies. Policies should have similar coverages, limits, deductibles and other terms. You don’t want to change insurance companies only to find out later that the coverages are not what you needed or had on your previous policy.

Our isure brokers will compare several insurance quotes against your current insurance policy to understand the pros and cons of making a change, such as cancellation costs, policy prices, coverages, discounts and claims services. Your isure broker can help you compare quotes to ensure you have the right coverage!

Why should I switch insurance companies?

Every insurance company has different prices, coverages, limits and claims services. The main benefit of switching car insurance providers is saving money on your premiums. Of course, a low premium isn’t the only thing to consider when choosing an insurance company. If you have had a bad customer service experience with your current provider or are interested in a benefit or perk that a different auto insurance company offers, you might consider switching. Some examples include free roadside assistance or gap coverage for the lease or loan on a new car.

It doesn’t hurt to shop around to find the best option that suits your needs.

When is the best time to switch insurance companies?

There’s little downside to shopping around for a better price than you’re currently getting on car insurance, so you can check for better rates as often as you want. Changes in your personal circumstances impacts how insurance companies calculate their rates. Buying a new car, adding your partner or teenager to your policy or moving to a new home can all make a big difference in the price of premiums. It is a good idea to shop around and see what sort of offer different insurers can make to best suit your changing insurance needs. However, changing companies or cancellation in the middle of your policy term may result in additional fees. Contact your isure broker to inquire further about changing insurance companies!

If you have been involved in an at-fault accident or driving violation, it may be a good idea to shop around. If your rates went up because of an accident or speeding ticket in the last few years, it’s worth checking back every six months or so to see if you can get a lower rate, as your rates will gradually decrease.

How does switching work?

When you purchase a car insurance policy, your insurer will write policies for a term, which is usually defined as six months or a year. Most insured drivers either choose to renew at the end of their term or shop around and switch when their policies expire.

If you decide that you would like switch your insurance, the process is fairly straightforward – but make sure you follow these three steps (under the guidance of your isure broker):

1. Shop around!

Do not cancel your policy just yet! Many bad things can happen if you don’t do it right, including losing car insurance altogether. The first step is to look at your current auto insurance policy and determine if you are going to have to pay any penalties. This may be the case if you are switching before it’s time to renew. The penalty costs could wipe out any savings you may acquire with your new coverage.

Next, have your isure broker compare car insurance quotes from a variety of car insurers. If you want to do so yourself, the best way is online. You want to make sure you’re comparing apples to apples, so keep a copy of your policy details handy during your search. Sometimes, the cheaper policy you find may come with higher deductibles in order to get a good rate and in the final analysis, it may not be worth it. While you’re collecting quotes, think carefully about whether your coverage needs have changed and whether there are any new discounts you might now be eligible for.

While comparing quotes to your current policy coverage, look closely at the discounts. Most insurance companies offer different discounts, and some may even have several that they offer. You want to take advantage of these as they can be beneficial in reducing your premiums. What you are doing here is looking at more than just the base premium rates.

2. Remember to re-evaluate your current needs

While you’re collecting quotes, think carefully about whether your coverage needs have changed and whether there are any new discounts you might now be eligible for.

  • Has the value of your older vehicle dropped enough that you can remove collision coverage?
  • Are you driving at night more often, increasing your risk of an accident to the point where you want to increase your liability coverage?
  • Could you save money by using a telematics driving tracker?

3. Reach out to friends and family

Reaching out to family members and associates to learn about their first-hand experiences have been like with their companies is a great strategy. Do they find their rates go up every year? Do these companies offer good customer service? How did they respond to claims, if any were made? You may also want to consider convenience, such as whether you can refer to your policy online or whether there is a mobile app available.

Besides cost, take the time to research the reputation and dependability of these insurance providers. It takes no time at all to find a variety of customer experience ratings online for any insurance company. You don’t want to have any hassles if you need to submit a claim in the future!

If it seems overwhelming, remember you can contact your isure broker. Once you are equipped with the quotes and details of several policies, you can accurately determine which insurance product best meets your needs and budget. When you choose to change insurers, your isure broker can settle the paperwork and legwork for you and make switching insurance companies quick and easy.

Get it in writing

After you’ve found the best price for insurance, give your current provider a call before you commit to switching to the new company. See if your current company will match the quote you got from a competitor and ask, in detail, about the company’s cancellation process. You may need to give your insurer advance notice to cancel your policy — sometimes, as much as 30 days is required — as well as pay a small fee to cancel your policy, though you will receive a refund for the majority of your unused premium once you cancel.

Once you’ve found a new insurance provider that better meets your needs, put the new policy in place before cancelling the old one. This is a highly-overlooked part of learning how to switch insurance companies, as it ensures that there are no gaps in your coverage. Wait until you have documentation that your new policy is in place before notifying your existing provider. Once you are sure you are covered by the new company, contact the old insurance company to let them know you have switched.

Cancel your old policy

Before you cancel your current auto insurance policy, ensure your new policy is in place. An online insurance quote is only a quote, you may pay more or less after you speak with a broker. The broker needs to send you a contract, you need to sign the said contract and submit it back to them for the policy to activate at what was agreed upon. It’s critical to be 100% sure of what your final price will be.

Now, you can notify your insurance company that you want to cancel your insurance (you can do this through your isure broker!) They will then send you a form to confirm your cancellation. Be sure that you have your new insurance in place to start the cancellation of your previous one.

Important: Make sure to avoid any gaps in insurance coverage!

You also want to make sure your policy dates line up and that you have no coverage gaps. If you start your new policy without cancelling your old one and it renewed automatically, you may be subject to penalties. Driving without insurance can cause you to lose your license. Even if you aren’t caught, gaps in coverage can eventually lead to your premium increasing significantly. It’s much better to have a few days of overlapping coverage than to take the risk of being uninsured. Once you have proof of insurance from your new provider, contact your previous insurance company to cancel your policy. You’ll receive a refund for whatever coverage you’ve paid for but haven’t used, so do this promptly to get a bigger refund.

Notify your lender (if you have one)

If you have a lease or loan on your car, make sure to notify your lease provider immediately after changing insurance companies. Most car leases and loans require you to carry insurance, and if your loan company thinks you’ve cancelled your insurance, it may repossess your car or purchase a separate policy for you.

For greater ease, your isure broker can do the paperwork, get the new policy in place and let your old insurer know about the cancellation.

Can you switch before the renewal date? 

With enough notice, auto insurance companies will generally allow you to cancel your policies for your current coverage at any point. However, switching mid-policy may come with some cost to you. If you’re cancelling early, the insurance company may prorate or short-rate your refund. Check out our cancellation calculator for a rough estimate of what cancelling early may cost you.

Prorating

If your insurer prorates your refund, you get back the portion of the insurance you won’t be using. Most policies are for one year.

Short-rating

If they short-rate, they could take a penalty from any financial return. In some cases, the fee is expensive enough that you won’t want to switch until your renewal time. The short rate fee for cancelling prior to your renewal date is usually about one month worth of your total premium.

When you terminate your contract mid-term, penalties may be applied – find out what the penalty will be before you cancel. You may find that it is better to continue with your current insurance company until the end of the policy term before changing insurance companies.

Switching insurers during the renewal process is simpler, you won’t face penalties and it’s your best time to take advantage of cost savings.

Consider bundling your home and auto insurance

Often, insurers will offer a significant discount if you insure multiple products with them. If you had your home insurance with your old provider, ask your broker about porting that insurance over to your new policy to see if you could save on both. If you have changed homeowner’s insurance policies, remember to let your lender or mortgage company know.

When shouldn’t you switch insurance companies?

It may not be the best time to change your Ontario car insurance just after you have recently renewed or started with a new company, as you may be eligible for cancellation fees. Also, another time when you probably should not look to switch companies is if you’ve recently been found at-fault or incurred a driving violation. Basically, if you’ve had anything happen that may affect your car insurance rate negatively, then now is not the time switch.

As your life changes, so will your insurance needs. The cheapest rate isn’t always in your best interest. The company that gave you the lowest price two years ago as a single renter might not be the best option now that you are married and thinking of buying a home with your partner. It is not difficult to switch insurance companies if you decide it is the most beneficial option for you. Allow the brokers at isure to do the research for you to determine if switching insurance companies is the best choice for you.

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