Common Mistakes Made When Switching Auto Insurance Providers

There are a number of very good reasons why you might want to switch auto insurance providers. If your rates are going up for no reason, you're unhappy with the level of customer service you received, or you simply got a better car insurance rate quote from a competitor, it's time to make the switch. However, there are some mistakes and pitfalls to avoid when you switch over to a new insurance provider.

Whether you're insuring a new car or an old truck, here are some common mistakes to avoid when switching auto insurance providers:

Canceling the Old Policy Too Soon

Avoid any gaps in coverage that could translate to being uninsured for a period of time by making sure the new insurance provider has received payment and that your new policy has been approved. Don't cancel your existing policy until the paperwork for the new policy has been signed, and make sure you're aware of the effective date of your new agreement.

Ignoring the Cancellation Policy

Some companies do have a cancellation provision in place for customers who cancel their agreement too early. Make sure you've passed this date so that you don't end up paying high fees just to switch insurance providers. If you're unsure whether you will be responsible for any fees, call the insurance agent to find out what your options are.

Forgetting to Ask for a Refund

If you paid your entire premium in full and are making the switch well before your renewal date, make sure you request a refund for the unused policy. Some companies will refund the difference promptly, minus any cancellation fees, while others will wait until your next billing cycle.

Forgetting to Halt Payment on an Auto Payment Pan

If you don't inform your insurance provider that you are requesting a halt in auto payments because you are canceling your policy completely, they may still end up billing you on the next cycle. If you miss this bill and end up forgetting about it, it will go on your credit report. Make sure you have a confirmation that the policy has been canceled, and that the insurance provider will no longer be withdrawing money from your account.

Signing Up for a Different Level of Coverage

Make sure your new insurance policy mirrors your old policy so that you still have the same coverage (or better) with your new plan. Take a close look at the terms and confirm that you have the same dollar amount of coverage and have selected the same deductible. Catching any inconsistencies too late could end up costing you in the long run.

Sources:

Insurance.com -- How to switch car insurance companies

AutoInsurance.net -- Switching Auto Insurance Providers

AutoInsuranceQuotes.com -- Out with the old: How to switch auto insurance companies