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Switching car insurance providers can have benefits. Guide by CarInsuranceCalculator.info

Whether you have a choice in the matter or not, sometimes switching car insurance companies is the best thing you can do for your policy and your premiums. When you change insurance companies, there are certain things that you need to keep in mind when conducting your search. Things like understanding how your premiums are determined as well as making sure your driving and insurance record is up to date are all very important. Louisiana residents who’ve had Farmers Insurance for the past few years should listen up. Farmers Insurance Exchange, which has homeowner and auto insurance policies, is removing its business from Louisiana. While some policies will be reinstated under a different company name, this is a great time for people to start comparing insurance policies with other businesses.

The insurance company has been experiencing significant monetary losses the past few years and while the majority of its policies lie with homeowners they still have a significant portion of the auto insurance field covered (close to 7,000 policies). In the scheme of things, that’s only .02% of the market but that’s 7,000 customers that are going to need to look for new insurance policies because it’s likely the policies that will be transferred to a new brand name will only homeowner insurance policies.

Insurance Journal.com reports that Farmers Insurance Company tried to raise rates in attempt to save their business in Louisiana but that effort was not successful. “In 2010, the company sought to raise rates an average of 18.3 percent for its 30,728 policyholders. Last year, Farmers wanted to increase homeowner’s rates an average of 39 percent statewide for more than 25,561 policyholders. The insurance department rejected both requests.”

This could actually be a silver lining for Farmer’s auto insurance policyholders as long as they know what to look for. Finding a new insurance company can be stressful because there’s only a certain amount of time you have to find a new insurer before facing a penalty. With the stress of everyday life and the pressure of a deadline, it may be tempting to just sign up with the first auto insurance company that pops up in your search window but if you can take the time to compare rates and do more extensive research, it will benefit you in the long run.

What You Need from the Old Insurance Company

For Farmers policyholders, they know that their policy is going to be canceled but if you are voluntarily switching insurance providers, there are several things you need to check off your list concerning your older provider. Then you can move on to greener pastures.

The first thing you want to do is make sure that you are approved for your new policy and have made your first payment. It may be hard to pay for two insurance premiums in one month but if you’re careful with how you plan things that can be avoided. The most important thing is avoiding a lapse in coverage. Even if it’s just two days, the risk of having an accident during that time and being uninsured is too great, especially if you know you can’t cover any medical injuries or property damage out of pocket.

That leads us to the next step. One of the easiest ways to avoid this lapse in coverage is to set an appropriate policy effective date. This is going to require you to speak with bot insurance companies. You will need to let your older insurance company know that you are going to cancel your policy and you need to get an exact date of when that’s going to end. You then need to speak with a representative from your new insurance company and set an effective policy date for that same date. Make sure that you don’t overlap your coverage.

If there are any other specific directions from either carrier, make sure you follow them. It will help the transition go much smoother.

The most important thing is to make sure you understand you old policy and the benefits it provided you. If you knew you had discounted rates for taking a defensive driving course 3 years ago, have a copy of completed certificate. This discount might be transferred to your auto insurer. Double check your coverage and deductible amounts as well. If they still apply to your current situation, it will be easy to narrow your search. On the other hand, this is a good evaluation period and you may find that you’ve needed better coverage for years now.

Benefits of Switching Auto Insurance Providers

Realizing you need better coverage and taking the steps to make it happen is one big advantage of switching insurance providers. If you’re with the same insurance company for years, it’s easy to just keep renewing you policy at the same coverage amount year after year, especially if your premiums are very affordable. But we all know that in the span of 5 years, many things can change and in the unexpected even of an accident, not having enough coverage is the last thing you need.

Another benefit of switching policies it that you may pay lower premiums. If you’ve maintained a clean driving history for the past few years, one insurance company may reward you better than another. Other premium determining factors could have changed as well like your credit score. Maybe you finally paid off all your school loans and have no credit card debt. When you go to buy insurance, your credit score could have improved without your knowledge, leading to a lower premium.

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switching insurance companies because you have to or because you need to, always look at it as an opportunity. The beauty of being an auto insurance consumer is that there are many businesses competing for your policy so you have the advantage of being able to choose the company that best suits your needs. Determine your ideal coverage, set a budget, and start comparison shopping.