Anytime you are in the market for car insurance, whether it is because you are buying a new car or because your current policy is about to expire, is a good time to compare car insurance rates. What’s more, you should compare rates at least once a year to ensure that you are getting the best insurance rates.
The great thing about comparing car insurance rates is that all you are doing is looking. You aren’t obligated to make a purchase, and if you use a free quote tool, you aren’t going to be pressured by phone calls and agents to make a purchase.
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The rates for car insurance change every day. Once you select a car insurance company, however, the rate you choose is the rate you will pay for the entirety of your contract, which is typically six months. When your six months is up, then you can compare rates again to see if you are still getting the lowest cost.
How often should I change car insurance companies?
The truth is that you can change car insurance companies as often as you would like. However, changing car insurance companies too often can lead to you paying higher rates than if you stayed with one company for a longer period of time.
You see, one of the factors that insurance companies use to determine your car insurance rate is the length of time that you have spent with a particular company.
In most cases, to get the best rates, you need to stay with the same company for a year or more.
According to the Consumer Watchdog, some companies will increase your rates by 50% or more if you don’t have at least a year with one insurance company. Mercury is a company that applies this type of rate to what they call “insurance inexperienced drivers.”
This doesn’t mean that you should stay with a company that is charging you hundreds of dollars more than one of its competitors. Instead, ensure that you don’t make a switch every couple of months over $20 or $30. If you do, the impact on your premiums will be a negative one.
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Can an insurance company turn me down because I switch so often?
Yes, an insurance company can turn you down for car insurance for this reason, but typically, they don’t. Instead, it will charge you higher fees than it would someone else who has a similar driving history as you.
What some companies do in order to reduce the number of insurance hoppers is charge a termination fee if you switch to another insurance company. In some cases, it is based upon how soon after you purchase your policy that you switch. In other cases, it is simply a base fee that anyone is charged if they make a change.
Some states actually have laws against this practice. However, most insurance companies don’t use this type of fee penalty regardless.
What if I love my car insurance company but its rates aren’t competitive?
If you have been with a car insurance company for an extended period of time and you find that you are paying more with the company than you would elsewhere, then it is time to call your agent and see if you can negotiate. There are some things that the insurance company can work with you on and some things that they can’t, but it doesn’t hurt to try.
The first thing that you will want to do is discuss any discounts for which you might qualify. If your situation has changed–for example, if you got married, graduated from college, or had kids–your insurance company won’t know unless you tell them.
Another thing that you will want to do is discuss your other offers with them. Make sure that your other offers, if they are less expensive, are exactly the same as what you are getting from your insurance company now. If you are paying a higher deductible to get a lower rate, for example, then you could do the same thing with your current insurer.
Lastly, you need to check out ratings and reviews for your each potential insurance company from sources like the Better Business Bureau, A.M. Best, and from your state’s Department of Insurance website. You want to ensure that you are not leaving an excellent company for a company that has a terrible reputation or that is about to go bankrupt!
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