Is it Time to Switch Insurance Companies?

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We get asked this question a lot and the answer is not always clear, but with the recent failures of AIG and other financial services companies, now is a good time to ask yourself whether or not to consider switching insurance providers.
Its worth at least considering this question anytime your auto, home, life or medical insurance policies come up for renewal.

If you haven’t bothered to get quotes and look at the differences between your insurance company and other competitors, how can you be sure you are getting good rates from a company that is still sound financially and will be there in your time of need?

How Do I Know Whether to Switch Insurers?

To determine whether or not it might make sense to consider switching insurers, ask yourself the following questions:

  1. What made you decide on your current insurance company in the first place; was it the service you get from your agent, a recommendation by a friend, the fact that you saved money by using that insurer initially, the rating that provider got from insurance rating services? If any the reason(s) you chose your current insurer have changed it could be time to reconsider.
  2. Has your insurer’s rating or financial condition changed as a result of the recent financial crisis? Most people though companies such as Wachovia, Lehman, Merrill and others should trigger all of us to look closer at the financial soundness of our bank, investment brokerage, insurance company, etc.
  3. Have you or a friend had recent claims experience(s) with your insurance company that would cause you to think about switching?
  4. Have your premiums changed significantly in recent years? If so, you should definitely shop around to see whether you could save enough on your insurance rates to consider taking your business elsewhere.
  5. Have you had any major life changes recently (marriage, career change, relocation, etc.) that could affect your insurance premiums and/or policy needs? Life changes are always a good cause to re-examine insurance policies.

Look at More than Just Premium Costs

Remember the whole reason you have insurance is so that you can rest easily knowing that should an insurable peril occur you’ll have adequate coverage and your insurance company will be there to assist. That’s why it’s usually worth paying a small premium to have coverage with a sound, reliable and reputable insurance company.

Saving a few bucks by going with a fly-by-night insurance company just isn’t worth the potential cost of finding yourself battling with their claims people if the time comes that you need to file a claim!

Do Your Homework before Switching

I’ve been with AAA since I learned to drive. While I shop around and get quotes from other auto insurers every year or two I just haven’t found anybody else I’d switch to; for me it just hasn’t made sense to switch. While I could save a few dollars by going with Allstate or GEICO, the service and discounts I receive by being a long time customer with Triple A have outweighed the potential benefits of switching.

You hear horror stories about people changing insurance companies, only to have their policy non-renewed for one reason or another and then finding their old provider will no longer offer them coverage. This is one of the risks to consider, especially with homeowner’s or renter’s insurance, which is a loss leader for most insurance companies and has caused more consumers grief and suffering than any other line of insurance in the last decade.

Losses caused by hurricanes, wild fires and other catastrophes have hurt the home insurance market so severely that you really want to consider whether saving a few dollars on your premium makes switching to another insurer a risky move … especially if you’ve been with your current provider for many years and have not filed any claims.

October 17th, 2008 by Local Fresh

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