3 reasons now is the right time to shop for new car insurance
If you’re like the majority of Canadians, chances are you haven’t updated your car insurance in a few years. Car insurance companies make it super easy for you to renew your insurance – they automatically renew it and then ask for another year’s worth of premiums.
Rather than wait until your policy is up for renewal, now is the time to start shopping for new car insurance. Here’s why.
Insurance quotes take time
Car insurance companies wait until about a month before renewal to send out the paperwork for next year’s premiums. Even if you wanted to shop around and find a better rate, who has the time to visit brokers and comparison shop? Especially when the alternative is to just pay the bill and be done with it. Brokers do their best, but even the fastest ones take at least a day to finalize a quote.
Instead, use HUB Insurance Hunter. Find out what the going rate for your car insurance would be and how it compares to your current rate. There’s no commitment involved with getting a quote, and, if you find a much lower rate, you’ll know where to go when your existing policy expires.
You could save money
Let’s say while comparing quotes, you find a better price. At this point, you have two options. The first, you can wait until your policy expires and get a new quote, hoping that it remains the same. The second option is the less chosen one – you can sign up with the new company and break your existing car insurance policy.
The second option is less popular because brokers and car insurance companies advise against it, usually by warnings of large penalties for breaking the contract. However, aside from any potential cancellation fees your broker might charge, the car insurance company will ask only for what it’s owed, more or less.
For example, let’s say you have a premium of $1200 a year and you are paying $100 per month. After one month, if you decide to cancel, the car insurance company might ask for 12% of the premium – or $144. Since you’ve already paid $100, the cancelation fee is negligible.
The same contract might cost 52% to get out of after six months, or $624. The further along the contract you go, the higher the percentage gets, but the lower the cancellation fee becomes.
If you can sign up for a new car insurance contract now, it might cost you slightly more money upfront, but you save more in the long run! Your broker will have more specific information, but it’s definitely an option worth exploring.
Your life has probably changed
Yes, changing car insurance companies is a hassle that involves tedious paperwork. However, your life may have changed significantly since you first signed up for car insurance. Maybe you’ve graduated university or gotten married – both of these life situations have an effect on your car insurance rate.
By renewing your car insurance policy every year, you take away your ability to comparison shop. Although Grandma might have purchased the same mid-class Buick every few years, no one shops for cars like that anymore. Instead, we do our research, we check prices, we negotiate. Now we simply have to take that mindset and shift it over to the car insurance world.