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Switching Insurance: When, How, What and Why?

By January 27, 2016January 23rd, 2019No Comments

When Should I Switch?

Most people stick with their insurance company for a really long time before they decide to switch. Something normally drives a person over the edge – for example, a large rate hike or a claim that was handled badly – before they decide to go ahead and make some calls. Did you know you should be checking around fairly often for better rates? Yes! It’s true! Not only that, but you should always call around for better rates when you experience a life change like getting a new car, purchasing a house or moving, getting married or having a baby! Especially if you buy a new home, your coverage limits might need to reflect the purchase, so calling around is always a good idea. Even if you don’t switch, you can bounce ideas off of another agent to make sure your coverage is what you need! If you currently have your auto insurance with one company and homeowners insurance with another, don’t forget about multi policy discounts. You could combine the policies for a great discount with one company or shop both of them together to see what makes the most sense. You can do this at any time. Make it a new year’s resolution to understand your insurance and make sure you are covered before the worst happens and you need to make a claim.

How do I need to handle switching companies?

Switching insurance companies can seem overwhelming! Sure, it might take a little time to look around and find out what the best company is, but I promise it is always worth it in the end! You’ll find out you’ve got a great rate or find out you’ve been paying way too much and it’s time for a switch! Whether you are coming from another independent agent or a captive agent, finding a good agent and a good rate can be hard on both sides of the coin! A good agent will ask you questions about where you are in your life to find out what coverage suits you best – there is no one size fits all policy. A good agent will also explain your coverage to you. At BIG Agency, we are always happy to compare where our policies are the same and where our policies differ from your current one. It might be overwhelming at first, but we try to make it simple!

The first thing you’ll do is probably search Google for insurance companies and agents in your area. You’ll come up with companies that sell direct like Progressive, Geico, and Esurance. These policies you’ll get quotes for yourself and purchase by yourself either on the internet or over the phone. You’ll also come up with captive agents. Captive agents sell for just one company. These companies are like American Family, State Farm and Allstate. You’ll have an agent in a physical office but possibly you’ll have to do more legwork yourself when you decide to switch again. Captive agents make commission on the policies they sell from their own company. You’ll also find independent agencies like BIG Agency. Independent agencies work with several different companies and check around for you when you need to switch. You can still check around yourself, but one phone call will give you many different quotes to work with from an independent agent. Independent agents make commission from their companies as well, and contrary to popular belief, you’re not paying more because of that.

What do I need to look for before I switch?

So now that you’ve called around and got your quotes, you’ll need to decide what company you’re switching to. You’ll want to talk with each company and agent and make sure you’re comparing the same coverage. A lot of times you might get a quote from one place for state minimum liability coverage and much higher limits from another company. The prices might be similar but the coverage might be way better! Make sure you’re comparing liability limits, full coverage deductibles, and extras like rental car coverage and towing coverage on your auto policy. If you have a homeowners policy, look at liability limits and your deductible to make sure they are similar across the board. Also make sure that if you have a basement your home policy has water backup coverage and that the amount will cover everything in your basement. Ask your agent or company about any exclusions a policy might have to make sure you’re covered in case of a major loss.

Why do I need to check around and what should I be aware of?

Contrary to popular belief, unless you have an independent agent and you’ve called them directly to check on other companies rates for you, your insurance company or current agent has no idea you’re checking around for other insurance. One company won’t alert your current company that you’re shopping. They won’t blackball you, non-renew you or cancel you because you’re checking around for other insurance policies. You need to check around from time to time just to be sure you’re paying a completive rate and to make sure your coverage is adequate. If you never check around for other rates, you could be overpaying for years for sub par coverage!

When switching, you might find a really great rate that is too good to be true. Some policies have exclusions if anyone else drives your vehicle, while others don’t mind if you loan it out once in a while. You want to be sure to ask about these kinds of exclusions so you’re not stuck in a hard place if you loan your car to a friend and they have an accident. You might not have coverage and have no idea. You also want to be truthful with each company that you get a quote from. Does your boyfriend or girlfriend live with you? They’ll need to be listed on the policy. If you combine both your policies, you may even get a better rate. It’s important to disclose young drivers as well. Even if a driver is 16, newly licensed, but not driving on a regular basis, they still have to be listed on the policy.

You need to spend some time on the internet researching companies before you decide to switch. Find out what the A.M. Best rating is for a company. Find out if they have won any awards from places like JD Power and Associate’s and check into reviews from Consumer Reports. You want to make sure you’re not leaving a great company for a sub-par one. While it doesn’t happen often, insurance companies could be in a bad financial state, and you want to make sure you’re not using one of these companies. At BIG Agency, we review all of our companies regularly to make sure they give excellent customer service especially with claims, rates are competitive, and to make sure they are in a good financial state. Don’t forget to ask friends and family about their personal experience with companies. While the internet is a great resource, sometimes reviews need to be taken with a grain of salt. Ask friends and family who their insurance is with and call those companies for quotes too! At BIG Agency, we have a referral program going right now. If one of our current customers refers you to us, we will give both of you a gift card, just for getting a quote!

Be weary of companies that suddenly lower your rate once you call to cancel. If you call your current company and let them know you’d like to cancel because you found a better rate with better coverage elsewhere, they could suddenly say they can get you a better rate. Be aware of what they are changing. Ask a lot of questions. Find out if they’re moving you to another company, if they’re changing your current liability limits, increasing your deductible or excluding coverage you had before to get the rate down.

Don’t forget to ask questions about the billing options offered, how long the agency or company has been in business, if there is a local office and where it is located, if there are cancellation fees involved and how claims are handled. Some companies have local claims centers or body shops they can refer you to in the time of an auto accident.

Remember, you can switch insurance companies at any time. Not just at renewal! It is fairly easy and BIG Agency makes the process go smoothly. If you have questions or would like to get a quote today, give us a call at 513-831-4544.