Changing automobile insurers doesn’t have to be a rough ride. In fact, as long as you follow the insurance rules of the road, you might get a better deal with little hassle.

Approach it as if you were preparing for a driving vacation. You need to plot your policy route before you head out. Your current coverage’s expiration date is a natural starting point.

Most policies generally are issued for six months or a year. Change insurers before the term ends and you could face penalties. If you cancel mid term, the premium is returned to you based on a formula.

“If you change at the time your insurance is due, there won’t be a penalty,” says Jim Armitage, a principal with Arroyo Insurance Services Inc., an independent insurance agency in South Pasadena, Calif. “If you wait a couple of weeks after you’ve renewed your insurance, some companies may decide to charge a penalty.”

Even if you don’t have to pay a penalty, when you cancel in the middle of a policy term, you’ll have to wait on any refund of already-paid premiums. And keep in mind that your old insurer will make the calculations on exactly when coverage ceased, meaning you could end up with less of a refund than you might expect.

Other opportune times for changing insurers include when you buy or sell a car or move out of province.

Shop around
It also could make sense to switch carriers even if you’re not making any automotive or residential moves, especially if the same company has insured you for a long time.

In this case, you’ve probably never really looked around at other companies, content to let the policy continually renew. Another company, however, might be able to offer you a better deal.

To evaluate your current coverage against other insurers, go to your province’s insurance regulatory agency, says Derek Fee, public affairs specialist with State Farm Insurance Canada in Toronto, Ont.

Insurance is provincially regulated, so there’s a regulator in each province. “In Ontario it’s the Financial Services Commission,” says Fee. “They provide a valuable feedback system for someone looking to switch carriers,” he says. “There’s also the Insurance Industry Bureau of Canada, which is like the Insurance Information Institute in the U.S. It has rate tables and other consumer information, as well,” says Fee.

You can also check with online insurance quote sites. Remember, however, that while quote sites may be fast, the results might not be the most accurate for your situation. That’s because the sites generally don’t require a lot of information upfront. The conciseness speeds up the time it takes to get a quote, but it might mean the quote won’t be exactly what you’ll pay in the end.

“They require a minimum of information to get you quickly in and out,” says Arroyo Insurance Services’ Armitage. “However, to get a good picture requires a lot more information. It can end up being a teaser, and you’ll find out that a policy will cost you a lot more or less than what the Web site quotes you.”

If you don’t have the time to shop around or need more hand-holding than a Web site can provide, an independent insurance agent would love to get your business and won’t mind doing the research for you, Armitage says.

Change isn’t always better
When you do compare coverage, make sure you know what discounts you’re receiving from your current insurer and whether you’ll receive comparable discounts with a new company.

Many companies, for example, reward long-time customers, especially drivers who’ve had clean records. Switching from coverage you’ve had for many years could cost you this premium break. Will the new carrier match a lost longevity discount with another form of discount?

“You have to look beyond the premium notice,” says Fee. “Consider service rules on accident forgiveness: What will even a small accident mean to you? A lot of companies are more likely to find some way to soften the blow of an accident the longer you have been with them,” he says.

You might even discover that you can save money by simply amending your current policy. For example, five years ago when your car was new, you needed more coverage than you do now.

Cut out the agent
One easy way to save money is to switch from an agent to working directly with an automobile insurer, says Peter Bielagus, author of Getting Loaded: A Complete Personal Finance Guide For Students and Young Professionals. Just remember that you will have to do more work if you skip working with an agent.

Before you switch, check with your agent to see if he or she can match or do better than the new quote.

And make sure the lowest rate is really worth it. That dirt-cheap policy could come with hidden costs. You may end up sacrificing customer service, sign on with a financially unstable company or end up with an insurer that will quickly drop you if you have an accident, says Tommy Dietz, founder of Thomas J. Dietz Insurance, an independent insurance brokerage based in Bedford Hills, N.Y.

Your province’s insurance department can help you determine how reliable a company is.

Close the gaps
If you do find it makes sense, and saves you dollars and cents, to switch your auto coverage, make sure the change doesn’t send you down a costly detour.

First, notify your existing insurer and follow the cancellation steps as outlined in your policy. Insurers usually want a certain amount of lead time to close out a policy. The notice also needs to be in writing. This will protect against confusion and give you a record to fall back on if there’s any problem with the change.

Never simply stop paying your policy premiums. While you might see that as an easy way to cancel your coverage, it could show up on your credit report as carrier cancellation because you didn’t pay.

Equally important is making sure there’s no lapse in your coverage. Work with your new insurer to guarantee that your new policy takes effect as soon as the old one ends.

And never cancel your existing policy until you know exactly when your new one begins. If you leave a gap, a fender bender while you’re uninsured could wipe out any new policy savings you may have anticipated.

Jasmine Miller is a freelance journalist based in Toronto, Ont. She writes for a variety of magazines covering issues from parenting to business and everything in between.

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