You may be able to save money by switching auto insurance policies, but you should be careful how you go about it. If you don't take precautions, you can end up creating unnecessary headaches and even lose some money in the process. Here are three precautions to help you complete the process successfully:
Switch at the End of the Coverage Period
The best time to switch insurance policies is when you need to do it; the next best time is at the end of your coverage period. There are several reasons for this advice. For one, some car insurers will penalize you if you cancel your policy before the coverage period elapses. For example, they may retain a percentage of the prepaid premiums, which you are supposed to receive when you cancel your policy. This is money you can save if you can afford to wait for a few months before switching your policy.
Mind the Gap
The state requires you to have insurance at all times if you plan to drive; you aren't supposed to drive without coverage even for a short distance. This is because you can cause an accident even if you are driving around the block, and you need insurance to pay for the ensuing damages.
Apart from the state's insurance regulations, which only applies to liability coverage, it's also wise to have other forms of coverage (such as comprehensive or collision) to help you repair your car if it's damaged, which can also happen even while driving a short distance.
Unfortunately, there is a risk that you may remain without coverage when switching policies. This may happen when you cancel your existing coverage before the new one comes into effect. Any loss that occurs within that gap in coverage is entirely up to you. Apart from that, you may also be fined for driving without auto coverage. Therefore, make sure your new coverage is in effect before actually canceling the old one.
Make Sure You Really Cancel It
Lastly, ensure that your old insurance policy is canceled; don't assume that the insurer will just close your books when you stop paying your premiums. Each insurer has specific steps motorists need to take when canceling policies; know what your insurer's steps are and follow them to the letter. If you don't do this, and just stop remitting your premiums, your insurer will make your account in arrears and report your "default" to the credit bureaus. This means you may have a hard time buying new coverage, and even if you do get one, your rates are likely to be high.
For more tips, contact a company like Manassero Insurance Agency Inc.