Auto insurance policies are extremely important and even mandatory to drive a vehicle legally. The rate of road accidents is on the rise, and so is the price people have to pay for medical treatments and repairs that follow after a car accident. All you need as a driver is a fuel-efficient car (for the rising gas prices), and brilliant car insurance coverage that comes at a low cost and offers great coverage.
But there comes a time when having the same auto insurance policy can lead you to lose money. A question that often gets asked is if you’ll ever need to change your vehicle insurance coverage. This article will answer this question in detail, letting you know when is the right time to switch auto insurance policies and when to avoid changing insurance policies.
When to Change Auto Insurance Policies
Finding the perfect auto insurance policy or company that suits your needs the best is one of the best things that can happen to your commuting expenditure. Saving money while being secure is truly a blessing. But there are times when you might have to change your auto insurance policies because staying with the same company might not be as beneficial for you as it used to be.
Here are some of the instances when you should consider buying auto insurance policies from a different company or switching to a different policy.
Better Rates, Better Coverage
One of the most compelling reasons why you chose an auto insurance company is because they offer great coverage at a great price. That is until some other company offers something better, and you should always look out for the best for yourself.
So when your policy period is about to expire and the time to renew the policy is close, just do a quick search and find the best car insurance policies that offer better coverage at an even better price. With time your auto insurance needs to change, so you need to change your auto insurance policies accordingly.
The great thing about the internet is that you can find great insurance companies online with your computer or your smartphone. Just do a specific search and compare multiple policies and companies. Choosing the best car insurance policy has never been easier.
For example, if you live in Georgia, look for affordable auto insurance quotes in Georgia online, and get all the relevant information about the different policies and plans. Select the one that suits your needs the best, as when it comes to auto insurance policies, price and coverage are both of equal importance.
Pay-Per-Mile Coverage
The changing world after the pandemic has shown people that you need not travel 20 miles every day to work. Work can be done from anywhere, even in your home with equal efficiency. This has led to many companies adopting hybrid work schedules wherein people go to the offices for a few days and work from home for the rest of the week.
This leads to reduced use of your car, and reduced use brings down the mileage of the car. If your car usage has reduced due to something similar, why not switch to pay-per-mile car insurance? This policy could help you save hundreds of dollars in insurance expenditure.
Pay-per-mile insurance takes a base rate which is calculated by looking at your driving record, insurance claims, and other factors. This base rate is then multiplied by your monthly mileage to calculate the rate of your insurance. The less you drive, the less you pay while having the security of auto insurance.
Buy pay-per-mile car insurance only if your mileage is low and you don’t drive more than 800 miles a year. If you drive more than 800 miles a year, stick to general car insurance.
Accidents and Insurance Claims
Road accidents and insurance claims will increase your auto insurance rates when you renew the policy unless you have bought an accident forgiveness add-on. So if you’ve recently had a car accident, or gotten a speeding ticket, be ready to pay more when you renew your auto insurance. Or avoid paying more by switching companies.
Every auto insurance company will charge you extra if you have had an accident or any traffic violations. But you can still save money by choosing the auto insurance company that charges the least for the specific violation. For example, some companies only increase the rates by 20% for speeding tickets, while others increase them by 45%.
When Not to Change
Changing auto insurance companies or policies might not be a great idea all the time. There are some cases when you should stick with your auto insurance company to get the most benefits and save money. Here are those instances.
No Claims Bonuses
If you have not made any auto insurance claim during your policy period, there’s a good chance that you’ll get no-claim bonuses. As the name suggests, if you do not make any claims, you get some discounts on the policy renewal price. It can range anywhere from 20% to as high as 50% (for not making claims in 2 or 3 consecutive years).
The terms and conditions of no-claim bonuses vary, so make sure you contact your car insurance company and know everything about it. It is better to collect no-claim bonuses and stick with the same company.
Multiple Car Insurance Policies
If you have bought car insurance policies for multiple cars from the same company, it is better to stick with the same company as switching can make you lose some great discounts and other benefits.
Minimal Price Difference
Switching auto insurance companies might be very tempting if you see a big price difference. But it’s not worth it if the price difference is minimal. If you see some other car insurance company offering the same policy at maybe $100-$150 cheaper, don’t get into the hassle of switching policies. Stick with your current insurer.
