Exit strategies for leaving your old auto insurance company.
When it comes to changing auto insurance, it can be very expensive to go without an exit strategy. Thou shalt not just let your old plan coverage lapse!
Your credit may be damaged if your old carrier auto renews you, but you fail to pay the premiums. Your driving record may be effected if your old carrier reports to the DMV that your policy was canceled.
The dreaded auto insurance policy cancelation fee
When considering when to cancel, many carriers will charge you a $50 fee if you cancel before the policy expiration. Keep this in mind if you plan on changing close to the policy expiration. If you are going to save less than $50 over the policy period with the new carrier, why not wait until the policy expiration rather than incurring any cancelation fees? Of course, we understand there are other reasons to cancel, like poor service, anger, revenge, claims issues, etc.
Timing the start of your new auto insurance policy
Before you cancel your old plan, make sure your new coverage will coincide with your desired future effective cancellation date of the old policy. You do this by working closely with your new carrier. You don't want any gaps in coverage when choosing a new carrier. Because of DMV fines and liability from accidents, it's not a good value to drive without insurance for any period of time.
Pitfalls with a new auto insurance company?
When buying a new plan, you can avoid rate ups or premium increases from your new carrier (because of corrected underwriting) by; Making sure your new company has examined your driver's license record, looked up any old accidents (your claims history), and has your correct physical address where your car is kept (hopefully garaged for insurance purposes). Some old fashioned brick and mortar carriers will need your old current declaration page, drivers license and down payment to get the policy started. Insurance companies allow you to cancel your policy at any time during the policy term by sending written notice stating the date of cancellation. It's always good to send your cancellation notice in writing, not over the phone. Many carriers want you to use their cancellation request form.
If you cancel your coverage via phone, many things can go wrong. The phone operator may have computer problems, there might be a language barrier, they may cancel the wrong policy. A written cancellation notice eliminates that (just make sure all your information including address and policy number are correct!).
After you cancel in writing, make sure you are canceled! Look for written verification from your old carrier you were canceled. Don't forget to look for your new insurance cards (proof of insurance) in the mail or email from your new carrier.
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Advice on what to do if you experience:
Policy cancelationA good time saver
Kelley LaBlanc, IA
Without the gimmicks, I got real rates from names I knew
R. Bailey, San Diego
You made getting different prices faster, and we got to choose
Jess Haden, Baltimore