Paul Sanchez
There is no set rule for how often you should change your insurance company, but it is recommended that you shop around for better rates every six to 12 months, or at the end of each coverage period. This is because insurance companies calculate their rates differently, and your rates can fluctuate depending on factors like location, age, and driving history. Shopping around for insurance can help you find cheaper rates or discounts, and ensure your coverage matches your evolving needs and budget. It is also a good idea to review your insurance coverage if you experience a major life event, such as moving to a new house or region, getting married, or having a baby.
| Characteristics | Values |
|---|---|
| How often should you change insurance | Every 6-12 months or once per coverage period |
| When to change insurance | When your insurer hikes premium costs or slashes benefits |
| When to change insurance | When you experience a major event that impacts your coverage needs, e.g. moving house, getting married, having a baby |
| When to change insurance | When you can find cheaper rates elsewhere |
| When to change insurance | When your insurance carrier changes its terms |
| When to change insurance | When your provider stops accepting your insurance |
| When to change insurance | When you experience poor customer service |
| How often to change car insurance | At least once a year |
| How often to change health insurance | More than once a year |
| How often to change life insurance | When your age or relationship status changes, or your rates rise |
| How often to change business insurance | More than once a year |
What You'll Learn
Review insurance annually
It is recommended to review your insurance annually to ensure you are getting the best rates and coverage. This is especially important if you have had the same insurance for several years, as you may be able to find a better rate with a new provider. Reviewing your insurance annually can help you secure the lowest premium for the coverage you require.
Insurance companies calculate their rates differently, and your rates can fluctuate depending on factors like where you live, your age, your driving history, and more. By reviewing your insurance annually, you can make sure that you are getting the best rate for your coverage. It is also a good opportunity to assess whether your coverage needs have changed. For example, if you are now driving an older vehicle, you may no longer need collision coverage or gap insurance.
When to Review Insurance
In addition to an annual review, you should also review your insurance whenever you experience a major life event that could impact your coverage needs. This includes events such as:
- Moving to a new house or region
- Making a major purchase, such as a vehicle or fine jewelry
- A birth or death in the immediate family
- Getting married or divorced
- Adding a teenager to your auto insurance
- Having or adopting a baby
- A change in your daily commute
How to Review Insurance
To review your insurance, you should shop around and compare quotes from multiple insurance companies. Get quotes for the same types and amounts of coverage to get an accurate idea of how companies compare. You can also research available discounts and bundle options to get a better deal. When reviewing your insurance, it is important to have your current policy information handy, including coverage and deductible amounts.
Switching Insurance
If you find a better rate or coverage by reviewing your insurance, you can switch insurance companies. There is usually no penalty for switching, and you can switch as often as you need. However, some companies may charge a cancellation fee, so be sure to review the cancellation policy of your current provider. When switching insurance, make sure that your new policy is in effect before cancelling your current policy to avoid a gap in coverage, which could result in higher rates or legal trouble.
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Switch after major life events
Life is full of surprises, and some of these surprises can be considered major life events. These events can impact your insurance coverage needs. Here are some examples of major life events that may prompt you to switch insurance:
- Moving to a new house or region: Not all insurers operate in all regions, and even if your current insurer does, your rates may rise based on your new location. For instance, you may have to pay higher auto insurance premiums if you move to a more populated area.
- Making a significant purchase: Buying expensive items such as vehicles or fine jewellery may require additional insurance coverage to protect your investments.
- Changes in your household: Events such as getting married, having a baby, or adopting a child can impact your insurance needs. You may want to add your spouse or child to your existing policy or explore new insurance options that better suit your growing family.
- Loss of health insurance coverage: Losing your job or ageing out of your parents' plan can result in a loss of health insurance. This type of event often triggers a special enrollment period, allowing you to enrol in a new health plan outside of the regular annual open enrollment period.
- Death in the family: The death of a spouse or family member can impact your insurance coverage needs. You may need to remove them from your existing policy and explore alternative options.
- Changes in income: If your income increases or decreases significantly, it can affect your eligibility for certain insurance programs or discounts. It may be beneficial to reevaluate your insurance coverage to ensure it aligns with your current financial situation.
- Retirement or milestone birthday: As you get older, your insurance needs may change. Older drivers, for example, are typically considered less risky to insure and may enjoy lower car insurance premiums.
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Compare multiple companies
Comparing multiple insurance companies is a great way to ensure you're getting the best deal. Here are some tips on how to do it:
- Shop around regularly: It's recommended that you compare insurance quotes at least once a year to make sure your rates are competitive. You can also shop around whenever you experience a major life event, such as moving to a new house, getting married, having a baby, or retiring.
- Get quotes from multiple companies: Compare quotes from at least three insurance companies to get an idea of the market rate. You can use online tools or speak to agents directly to get quotes.
- Consider your needs: Determine the level of coverage you need before getting quotes. Think about factors such as your driving history, vehicle, location, and budget.
- Look beyond price: While price is important, also consider other factors such as customer service, claims handling, and available discounts when choosing an insurance company.
- Ask about cancellation fees: If you're switching insurance companies, ask about any cancellation fees or refunds from your current insurer. Some companies may charge a fee for early termination of your policy.
- Avoid a coverage gap: Make sure there is no gap between your old policy ending and your new policy starting to avoid higher rates or legal troubles.
- Notify your lender: If you have a car loan or lease, inform your lender about the switch, as they may have specific insurance requirements.
- Compare similar coverage levels: When comparing quotes, make sure you're looking at the same types and amounts of coverage to get an accurate comparison.
Avoid coverage gaps
It is important to avoid coverage gaps when changing insurance providers. A coverage gap can occur if you cancel your old insurance before your new insurance is in place. This can lead to a damaged driving record or legal punishments.
To avoid a coverage gap, set your new policy to begin on the same day that your old policy ends. This will ensure that you are always covered and won't have to pay higher rates or face legal consequences for driving without insurance.
You can also ask your new insurance company to send proof of insurance to your lender or leasing company. This is especially important if you have a car loan or lease, as they may require you to have a certain amount of insurance coverage.
In addition, be sure to cancel your old insurance policy after the new one is in effect. Contact your old insurance company to find out about any cancellation fees or refunds that may apply.
By following these steps, you can avoid coverage gaps and ensure a smooth transition to your new insurance provider.
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Notify your lender
If you have a car loan or lease, it's important to notify your lender or lease provider of any changes to your insurance. This is because the lender has a financial stake in your car and will want to ensure it remains insured. Ask your new insurer to send proof of insurance to the lender or leasing company, and inform them yourself as well.
If you have a mortgage, you are typically required to have home insurance. If your home insurance is cancelled or not renewed, your mortgage lender is allowed to buy insurance and charge you for it. This is known as force-placed insurance or lender-placed insurance, and it usually only protects the lender, not you. It can cost twice as much as a standard policy.
Under federal law, your mortgage lender must notify you at least 45 days before charging you for force-placed insurance. If you receive a notice that your home insurance policy is being dropped, you should contact your insurance company to ask why. They may reconsider and renew your policy.
If you switch to a new insurance provider, be sure to notify your mortgage company of the change. You will need to provide them with the name and address of your current and new insurance companies, your mortgage loan number, and your old and new policy numbers.
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Frequently asked questions
It is recommended to review your insurance plans every 6-12 months or once per coverage period.
Yes, you may need to change insurance carriers when you move to a new state, as not all insurers operate in all regions, and your rates may rise based on your new location.
You should consider switching car insurance providers at least once a year to ensure you're getting the best rates and coverage.
Yes, you can change your insurance carrier at any time, although you may have to pay a cancellation fee if you leave your current carrier in the middle of a policy.
You may want to change your insurance carrier if you find cheaper rates elsewhere, if you've recently moved, or if you've had a major life change such as getting married, having a baby, or retiring.
