Should I change my car insurance?

May 22, 2007 5:38 PM

My girlfriend and I are considering changing our car insurance. Are there any penalties or caveats we should watch out for?

I've gotten quotes that would save us about 50 bucks a month, and we are staying with national carriers. Is it like a credit score that reflects poorly when there are multiple inquiries?

posted by msalex to travel & transportation (8 comments total)

I don't think so, but at least in Massachusetts there is a flat fee for any changes to your insurance.
posted by mkb at 6:04 PM on May 22, 2007

Most insurance companies will be checking your credit, thought legally they have to tell you about it. I don't think it reflects the same on your score as it would if you had a similar run of credit card openings, or car loans, etc.
posted by efalk at 6:25 PM on May 22, 2007

Well, insurance looks at your credit score as a 'soft hit', so while you might see it on your report, it doesn't count against you.

Insurance carriers don't keep tabs on each other's customers - they end up coming and going as they please. The only thing the company can and will use against you is your DMV (for tickets) and Clue (accidents).

I can't think of any carriers that charge a penalty for canceling (when I worked for GEICO, they didn't anyway). In most cases, they pro-rate it and you usually get money back for the unused month.

Just make sure you get the new insurance before you cancel the old. A lapse of insurance is not the kind of crap anyone needs.
posted by sephira at 6:27 PM on May 22, 2007

Also, you don't say what your car insurance situation is, but to get into the 'preferred' catergory or higher with most carriers - carry at least double the state minimums for Liability (you should anyway) for at least six months, then switch carriers. If you really liked the first carrier, you can switch back after 6 months anyway. The reason for switching is that most carriers will not do a review of your policy for at least a year, but when you switch, they have to, obviously. The higher liability seems to correlate (to the actuaries at least) with a higher overall sense of responsibility and thus a lower rate once you've established this. The savings of doing this as opposed to people who carry the state mins for long periods of time are rediculous.
posted by efalk at 6:29 PM on May 22, 2007 [4 favorites]

When I called to cancel my Allstate insurance after I switched, they suddenly got much more competitive because of a "new program". Yeah. I still switched because I had already paid for the new policy, but I would have stayed if I had been offered that rate at the normal renewal. So it's worth calling your current agent and seeing if you can get a little retention loving.
posted by smackfu at 7:04 PM on May 22, 2007

Just activate your new insurance policy on the same date that your old insurance policy expires. (You'll need to inform both companies of this in advance, but that's no problem). That way there will be no gap in coverage and there will be no pro-rated fees to worry about.
posted by amyms at 8:17 PM on May 22, 2007

Definitely call your current insurer with the new quotes. My agent offered me a 50% rate cut as soon as I mentioned having shopped around. When I told her the quoted rates were lower than that, she offered to beat them.

Shop your rates annually, and use the best quote to wring plenty of concessions from the others. If you've got a good record and few claims, you're a profit center. Everyone should be eager to have you.

The only concern I'd have about switching is about the posibility of being dropped or facing a rate hike if you have to make a claim relatively soon afterward. A company is much more likely to "forgive" a claim or two from a longtime customer than from a new one. You have to be the judge of whether $10/mo is worth the gamble. Definitely ask the present insurer to match that price before doing anything.
posted by nakedcodemonkey at 10:16 PM on May 22, 2007

If you have a long history with your current insurance provider, and no claims, you are probably losing a steep discount by switching. On the other hand, if you have a lot of claims or a short history, there's no benefit to staying with your current company. Also, not all insurance companies are equal.
posted by BrotherCaine at 11:10 PM on May 22, 2007