We often talk about the benefits of shopping around for insurance. Requesting new quotes and taking a look at your policy compared to other insurers can help you ensure that your coverage is up-to-date and competitively priced. If you find a policy with better coverage, better customer service, and/or a lower price, you should consider switching to a new insurance provider. But with all the rewards that can come with switching insurers, there are some “risks” you should consider before making this transition as well.
The Downsides of Changing Insurance Companies
1. You could lose loyalty benefits.
The primary benefit of staying with the same insurance company for several years comes down to loyalty. Most insurers offer loyalty discounts the longer you’re insured with them. The value of these discounts can range, but we’ve seen some insurers offer up to 15% off your monthly or annual premium for long-term clients.
Moreover, if you’re a loyal customer with a history of on-time payments and little to no claims, you may be less likely to see your rates drastically increase if you do submit a claim. If you are a lower risk, higher tenured customer, this might be a factor to consider before you decide to make a switch. If you were to switch insurers and submit a claim shortly after switching, your rates may increase or they might not renew your policy altogether because you don’t have the “history” to demonstrate your lower risk profile.
For some of our customers, though, these loyalty benefits may not be worth it. Some customers may be able to find more competitive pricing by comparison shopping our panel of insurance companies, all of whom offer a variety of discounts. Learn more about potential discounts for your home and auto with the following resources:
- 8 Insurance Discounts to Ask Your Insurance Agent About
- 9 Ways to Save On Your Insurance Over the Summer
- How to Get a Lower Price on Your Car Insurance
- The Benefits of Bundling
2. You may have to pay a cancellation fee.
If you cancel an existing policy before your policy’s end or renewal date, the insurer may charge you a cancellation fee. They could charge you a flat cost of one month’s premium or they could charge a percentage of your total remaining insurance. Most insurance companies don’t do this, but before you go through with your plans to cancel, you’ll want to double check just in case.
3. You want to make sure the new company is in good standing.
Don’t make a switch based on price alone. You want your insurance company to have the financials, service, and credibility to handle your claims if and when the time comes (that’s the whole point of insurance!). A licensed insurance agent can not only help determine how much coverage you should consider carrying , but can also give you first-hand insight into the insurance companies they work with.
InsuraMatch works with insurance companies in good financial standing that offer excellent customer service. We’ve done all the vetting and due diligence for you, so you can feel confident when you compare quotes through InsuraMatch that you’re getting a great price and great service. Give us a call today at (844) 300-3364!
4. Your insurance rates may rise in the future.
Some insurance companies may offer you super low rates the first year, but those rates might increase in the second or third year, for a number of factors. That’s why it’s so important to choose your insurer and insurance policy on more than just price alone, since price can fluctuate. You’re paying for insurance, so you want the best possible service and coverage available to you, not just the best deal.
5. You may risk a lapse in coverage.
If you’re shopping around for insurance and then forget to actually go ahead and make the switch, you could find yourself accidentally canceling or not renewing your old policy without already having a new policy in hand. As long as you make sure your new policy starts at least one day before your old policy ends, you’ll avoid any potential lapses in coverage and won’t have to worry about this.
Should you change insurers?
Generally, there’s little risk or downside to switching insurers. If you feel you aren’t getting your coverage at a reasonable price, we recommend shopping around for home, auto, or other insurance under the guidance of a licensed insurance agent. Insurance is there to help protect you, so you want to ensure you have all the coverage you need with fair monthly or yearly payments. An insurance agent can help make sure you’re looking for the right amount of coverage from insurance companies that have great reputations, both for financial stability and customer service.
Thinking about switching insurers? Give one of our expert insurance advisors a call today to compare quotes at (844) 300-3364!
Not by the phone? Get a quote online: