• Wed. Sep 21st, 2022

Should you switch insurance companies in the middle of your term?

ByElla E. Kidwell

Apr 16, 2022

In some cases, it may be worth switching providers before your renewal date.

Content of the article

You probably only think about your car insurance policy when you make a claim or when your policy needs to be renewed each year.

Advertisement 2

Content of the article

But what is there to gain by paying more attention to it?

Savings – maybe quite significant. Staying on top of your insurance rates can help ensure that you get the best deal possible. But many people don’t take advantage of this chance to save money.

In some cases, it may be worth switching providers before your renewal date.

More on this topic

  1. Lorraine explains: don't just automatically renew your car insurance

    Lorraine explains: don’t just automatically renew your car insurance

  2. Here's why switching to a new ZIP code can increase your insurance premium

    Here’s why switching to a new ZIP code can increase your insurance premium

Auto-renewal may actually cost you money

Staying with the same insurance provider year after year may be the most convenient option, but it’s not necessarily the cheapest. Rates can increase for many reasons, some within your control – driving history, where you live, the type of coverage you choose – and some not, such as inflation, the number of cars on the road and the number claims made in your area.

Advertisement 3

Content of the article

Your insurance company will begin sending you automatic renewal notices 60-30 days before the new policy takes effect. Although some insurers may offer a renewal discount, take the time to shop around. There might be a better offer for you.

This is also an opportunity to call your current insurance provider and see if you can get a better rate. Be sure to ask about discounts and mention any changes in your driving habits.

According to Financial Services Regulatory Authority of Ontario.

Do I have to change providers before my renewal date?

Advertisement 4

Content of the article

As a general rule, it is not advisable to cancel an existing policy before the renewal date as you will have to pay a cancellation fee. The amount of these fees will depend on the insurance company and the number of months remaining in your term.

However, if you find a cheaper rate with another insurance company – and the savings far outweigh the cancellation fees – it may be worth it.

Therefore it makes sense to compare auto insurance rates throughout your tenure and at renewal. Some of the benefits of getting a new quote include:

  • Lower premium: Insurance companies want your business. It is therefore very tempting for you to switch suppliers. Some will offer incentives or discounts for new signings.
  • Increased coverage: A new plan may cost the same but offer better coverage – a good reason to switch.

If you decide to stay with your current provider, remember that you can make changes to the policy at a later date. Just be sure to keep this in mind – the result could be a lot more money left in your bank account.

LowestRates.ca is a free, independent rate comparison website that allows Canadians to compare rates from over 75 providers for various financial products, such as home and auto insurance, mortgages and credit cards.

comments

Postmedia is committed to maintaining a lively yet civil discussion forum and encourages all readers to share their views on our articles. Comments can take up to an hour to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread you follow, or if a user follows you comments. See our Community Guidelines for more information and details on how to adjust your email settings.