If you are looking to switch insurance companies, you may have some concerns before committing to do the research. Whether you are looking for better car premiums, considering buying a home or simply feel that your current insurer isn’t giving you the best rate, you’re not alone – online insurance searches have been steadily on the rise! Here are answers to some of the more common concerns when it comes to switching insurance companies in order to help you decide if changing insurers makes sense for you.
Am I able to switch car insurance companies in Ontario?
Yes, it is possible to switch companies at any time in Ontario. Ontario’s system is private, yet regulated by the provincial government. Privatization means you can change to any insurance provider at any time.
Is it common for people to switch?
It is less and less common for people to stay with their insurance companies for several years. If there is a saving of 10% or more, most people think it’s worth it to switch nowadays. Most commonly, many people now switch every five years.
How do I cancel my current insurance policy?
Once you’ve done your research and have found the coverage you want, the best way to complete the switch is to call your isure broker and ask for a cancellation. They will send you something called a “Lost Policy Voucher” or LPV. This is a form you sign which will cancel your policy. You can also sign the back of your current policy and return it. Be sure to verify that you’ve cancelled your old policy once your new policy takes effect; don’t just let it lapse on its own! If you don’t specifically cancel your policy, it will get cancelled for non-payment which will negatively impact your insurance rates. Your new insurer is not responsible for cancelling your old policy.
When is the best time to switch insurance companies?
Generally speaking, a good time to assess your insurance (and maybe even look to switch companies) is when you have personal circumstances change or its time for your insurance to renew.
Changes in your personal life can include things, like moving addresses. For example, getting a new postal code can be one of the most detrimental factors that influences how much you pay a year in home insurance. Insurance companies track claims that have occurred in neighbourhoods based on three factors: the type, the number and the cost of each claim. Insurers use your neighbourhood’s claim history to determine the likelihood of your future claims, which in turn, play a part in rate determination. Other examples include getting a new vehicle or getting married. Many feel that making the switch at the time of your upcoming renewal is best as you will not need to pay any cancellation fees if you switch at this time.
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 if you have started with a new company, as you may be eligible for cancellation fees. You probably should not look into switching insurance companies if you’ve recently been found at-fault or incurred a driving violation. You will have to deal with two insurance companies simultaneously until the claim is settled. Basically, if you had anything happen that may affect your car insurance rate negatively, then now is not the time switch.
How often can I switch insurers?
You can change insurance companies as many times as you want. However, always consider any mid-term cancellation fees that may apply.
Is it bad to switch insurance companies frequently?
By switching insurance companies frequently, you may miss out on some discounts. These discounts include accident forgiveness on your car insurance, loyalty discounts, bundling and claims forgiveness discounts on your home insurance. We advise that you get guidance and advice from your isure broker before switching insurance companies.
Will changing insurance companies affect my rate?
No, it will not. Gone are the days that people commit to their insurance company for 10+ years. As Ontarians become more financially savvy, insurance companies continue to expand their types of coverage. Insurers are developing more online platforms to inform the public about potential savings, they understand people are looking to make the switch more readily. If you understand the rules and regulations around making a switch before your auto insurance is up for renewal, your auto insurance rate will not become more expensive. If you are unsure, you can check with one of our isure brokers today.
Do I automatically qualify for accident forgiveness with my new insurer?
No. Most companies only offer accident forgiveness after three or more years of continuous coverage. Therefore, switching companies may mean losing access to this feature for some time. Accident forgiveness can potentially save you thousands, making it a valuable benefit for remaining a long-term customer.
Should I keep all my insurance policies together?
Absolutely! Doing so could save you quite a bit of money if you bundle your home and auto policies together. By doing your research for new car rates, you may find that insurers will give you a better deal if you bring over your home insurance, as well. Concerns with switching carriers can be alleviated once the savings are realized.
What are the rules, penalties and fees around switching your car insurance?
This is one of the main concerns with switching insurance. Whether you signed up to pay a monthly premium or you agreed to pay for a full year in advance, your coverage is based on an annual agreement. Depending on when and why you cancel your policy, the penalties for cancelling are often different. Not every single company charges a fee, but most of them do.
Despite the differences between each insurer, there are two main models insurance companies use when someone cancels their policy: short-rating and pro-rating. Pro-rated cancellations will refund you the full amount of an unused premium. Short-rated cancellations will take an amount of the refund as a penalty for cancellation.
Why are insurance policies cancelled short-rate?
Insurance policies are cancelled short-rate to help cover the administrative costs associated with setting up an insurance policy. A lot of time and effort goes into setting up a policy, which results in costs for the insurance company. Short rate cancellation fees help offset these costs, as they are incurred whether a policy is in force for a week or for the entire year.
If you cancel your policy mid-way, a cancellation fee of approximately three weeks’ worth of insurance will be charged to your account. Let’s say your policy premium is $2,000 per year – the premium earned would be 55% and the resulting fee would be $100.
Must I change insurance providers if I drive a different car than the one listed on the policy?
If you’re looking to transfer your car insurance to a new or different vehicle, you don’t need to change providers. Nearly all insurance companies will allow you to switch your policy to a new vehicle and will alter the policy to reflect the change.
I have an open claim. Should I have concerns with switching?
Concerns with switching insurance companies with an open claim are not necessary. Your current insurer will still pay out the claim you have with them as they normally would, even if you stop coverage from them. However, it is important to be aware of a few points. First, your old insurance company will handle the claim and any payouts involved. Secondly, if you were in an at-fault claim, do expect your premiums to rise. Keep in mind that you’ll have to deal with two car insurance companies simultaneously until the claim is paid out, which may be a bit of a headache.
Looking for the best possible insurance coverage doesn’t need to be complicated, and we’re happy to ease your concerns when it comes to switching insurance providers. With a little research and your knowledgeable isure broker guiding you through the process, you can be sure to get all the coverage you want at a price that suits your budget.