If you’re like most people, you probably never speak to your insurance agent unless you have to pay a bill or file a claim. Car insurance isn’t something that crosses peoples’ minds until they need to make a payment, renew their policy or file a claim.
Let’s first take a look at situations that call for policy updates, and then how to update your car insurance policy in five easy steps:
When your insurance policy needs updating
There are times when you may need to update your insurance policy. This may occur when:
You experience life changes
There are various life changes that have a ripple effect when it comes to car insurance. These changes include getting a new job, getting married, having children, moving to a new location or adding a new member of the household to your policy’s driver list.
These changes may result in gaps or overlaps in your car insurance coverage. They may qualify you for discounts while others may require an increase in your coverage needs. Keeping your car insurance policy updated will ensure that you have adequate coverage at a reasonable rate.
Before you buy a new car
If you’re shopping for a car, it is important to factor in the cost of insurance. Insurance premiums contribute to the total cost of maintaining a car. It is therefore important to update your insurance before you purchase a new car. This will help influence your decision on what type or model of car to purchase.
After you purchase a car
Before you put the car on the road, ensure that you have adequate insurance coverage. This will mean updating your current insurance policy.
How to update your insurance policy
Evaluate your needs
Evaluate your life and any changes you’ve made that could impact your coverage needs. Research what type of impact these changes could have on your coverage (e.g. getting married or getting a professional job could result in a discount in your insurance premiums).
Recent studies are showing that few people take the time to shop for insurance options. A 2015 Consumer Reports study showed that only 25 percent of the respondents had compared insurance policies in 12 months. Those who did compare insurance companies only compared one or two companies.
This is surprising considering that a JD Powers study revealed that consumers have been found to save over $300 when they switched insurance providers. The study also showed higher customer satisfaction rates amongst those who switched providers.
Comparing insurance companies can help you get a better offer. You can explore your options using the following steps:
Get a free quote for car insurance from at least three providers using insurance-comparison sites like CoverHound
Compare quotes based on coverage, deductibles and limits – not just by price
Consider different payment options
Look for discounts
Verify the reputation of the insurance companies you’re considering
Consider the level of convenience and accessibility offered by the company
Consider any additional benefits different insurance providers offer, such as community involvement or environmental awareness. You may want to follow their accounts on social media to see what they’re all about.
If you’ve identified a policy that is suitable, you can now make the switch. If you’re dropping your insurance provider, you may have to inform the state’s motor-vehicle department. You should also ensure that your new policy takes effect before or on the actual day that the old insurance policy ends. Even a single day of lapse in coverage may result in future insurance rate increases.
Cancel previous coverage
Cancel your previous coverage. You may be charged a cancellation fee if the term has not expired. You may prefer to wait and not renew your previous coverage. Always ask for confirmation of the cancellation. Your policy may otherwise be automatically renewed.
Get your new ID cards
Get your new insurance ID cards and keep them handy. You are now covered.
You should shop around and update your insurance coverage annually. This may not mean changing providers but just confirming you’re adequately covered based on your situation and financial needs.
Updating your car insurance isn’t complicated, but it must be done. Keep the above steps in mind the next time you’re thinking of either updating your policy or getting a new one altogether.