When Should You Change Insurance Companies?

Is it time to shop insurance or change insurance companies? No one enjoys doing it, but sometimes it’s necessary. When is it smart to change insurance companies? How much savings is enough to make a switch?

When you shop insurance or change insurance companies, compare cost, savings and risk.

We’ve all thought it:

“My homeowners insurance bill went up again!”

“I’m paying too much for car insurance!”

“I need to cut my business insurance costs!”

“My insurance company wants me to repair my house, and I don’t have the money!”

What’s the Threshold to Change Insurance Companies?

Everyone’s different. Some clients choose to stay with their current insurer in spite of $300 savings per year for similar coverage. Others want to switch insurance companies to save a fraction of that, and with a higher deductible. Neither is right or wrong. It depends on your risk tolerance and price sensitivity.

Can Your Agent Shop Insurance For You?

Does your insurance agent represent more than one company? One reason people choose Noyes Hall & Allen, a Portland Maine Independent Insurance Agency is that we represent several insurance companies. This offers you the ability to shop and change insurance companies without having to start a whole new  relationship.

Because we represent so many insurers, we have a good handle on market conditions. We review most policy renewals every year. If we question whether a policy remains competitive, we compare options.

That usually happens in one of three scenarios:

  • Excessive Price Increase – the premium increases by more than the current market rate change percentage.
  • You’ve been with one insurer for many years – Even if you never had an excessive premium increase, your rates can creep above the market over the years. We can check options to make sure that your current insurance company is still the best value for you.
  • New company or coverage options – Once in a while, a new insurance company enters the market, or an existing company offers an important new coverage that you don’t currently have. That might cause us to compare options and present them to you.

 Related Post: When a Great Car Insurance Quote Isn’t

Changing Insurance Companies: Savings

Changing insurance companies is not to be done lightly. You can save money, but there are costs and risks to consider, too. If the savings outweigh the risks, maybe it’s time to change insurance companies. We can help you evaluate that.

Saving Money When You Change Insurance Companies

It’s easy to measure savings – or is it?

Insurance is a competitive business. Companies compete on price, coverage and service. You may find savings of $300 per year. Is that for similar coverage – or does it transfer more risk to you? An insurance agent can tell you the difference.

  • Compare “apples to apples” as close as possible.
  • Check liability limits, property deductibles, and type of coverage.
  • Consult an insurance agent to help you review quotes. A good agent will tell you if their program is not the best for you. Pay attention to their answer.

Costs to Change Insurance Companies

How much is an hour of your free time worth? It can easily take 3 -5 hours to switch insurance. You have to:

  1. Research insurance companies,
  2. Choose one (or more) to get quotes from
  3. Provide information for quotes
  4. Compare the quotes and coverage
  5. Apply for a policy
  6. Cancel your old insurance
  7. Set up new billing arrangements.

An independent insurance agency that represents many companies, and can save time. But even if you use an IA you can’t eliminate these steps completely. It still takes time. And time is money.

  • Cost of Lost Benefits
    Many insurance companies reward longevity. Some offer insurance discounts to customers who are claim-free for 3 or more years. Others are more lenient in underwriting or billing for long-term clients with a good payment or claim history.

    Estimate a dollar value on those lost benefits and advantages when deciding whether to change insurers. Your insurance agent can help. If you think the savings outweigh the costs, you may want to change. If not, stay put.

Risks of Changing Insurance Companies

  • Risk of Losing Coverage  
    Insurance companies’ coverage can vary a lot. When you change companies, it’s difficult to impossible – even for an experienced insurance agent – to duplicate the coverage you had before. Trying to match coverage on your own (on a web site or 800 number)? That’s risky. A local insurance agent can help you evaluate and discuss whether there are important differences.
  • Risk of a New Insurance Company
    It’s expensive for insurance companies to underwrite new policies. To control costs, they quote your insurance using a “quick qualification” process. They only spend money on expensive reports for people who intend to buy. Then they underwrite fully. That creates some risk for new customers.

    After you apply, they inspect your property and order more reports (motor vehicle records, claim histories, etc). Depending on their findings they may :

If you’ve already cancelled your other policy, you can find yourself looking for insurance in a hurry – and end up worse off than you were before. If you shop on your own, without an agent to advocate for you, you’ll be on your own to fight the insurance company.

If you have questions about the right time to shop for Maine personal or business insurance, contact a Noyes Hall & Allen Insurance agent at 207-799-5541. We offer a choice of Maine’s top insurance companies, and our advice is always free.

We’re independent and committed to you.