Should I Switch Insurance Companies?

Elliott Insurance Services    February 12, 2019
Should I Switch Insurance Companies
Should I Switch Insurance Companies?

No one likes over paying for insurance, so when you see a deal that you think could be better, it’s pretty tempting to make that switch. The real question is, should you make that switch?

Today we will try to break down the reasons why you should switch companies and also the reasons why you should stay with your current insurance provider. It doesn’t matter if you are currently insured by an insurance broker, a direct insurance company, or us. Our goal is to help you make the right decision for you.

It is highly suggested that you read the reasons to switch companies and also the reasons not to switch companies so that you can have an objective look at your choices.

Reasons to Switch

Everyone will have different reasons for switching their current insurance company or their current insurance broker. It could be for a cheaper premium or it could be due to the lack of services that they are providing you. Making the change can be a big decision and by listing common reasons to make that switch we aim to help you make that decision.

Lower Premiums

It’s true, some companies just have better rates. Every company sets their premiums based on an incredible amount of past data and real world projections. The only catch with making a switch for a lower premium is to ensure that you are getting the same or better coverages than your current policy. A lot of people will think they are getting a better deal when in reality they are simply getting less coverage. Make sure your insurance professional compares the coverages between the two companies with you so that you understand what you are covered for and where there are gaps in your coverage.

Better Coverages

If there is a reputable insurance company that will give you better coverage for the same or slightly higher premium than your current provider, than that switch makes sense once you have weighed the options not to switch insurance companies.

Lack of Service

Not every company or insurance broker is amazing. It’s the same in any industry in the world; some people just don’t have your best interest at heart. If you are experiencing a lack of knowledgeable and professional service from your insurance provider, it is highly suggested that you make a switch.

If you’re currently insured with a broker, it could be possible to keep your current policy in force, but to simply switch the brokerage you deal with on your renewal date. This could be a great option for people who want someone to service their insurance profile with the same dedication that they would service their own.

Reasons Not to Switch Insurance Companies

Believe it or not, switching insurance companies is not only a lot of work, but it could be the wrong move. Even if you save a few dollars, it could end up costing you a lot more money in the long run.

Loyalty

Now before you say that’s a silly answer, hear us out. We don’t mean loyalty as in you need to be loyal to your insurance company like you would your significant other. Insurance companies take loyalty seriously, and if you have been with the same insurance company for years, it could benefit you in the event of a claim.

If you were to have an insurance claim that were to be just outside of your coverage, but one could reasonably make the argument that it could be covered, those years of loyalty could get that claim covered. If you have a claim and there is a dispute over the pay out, that loyalty could get you that slightly higher pay out. We are not saying that it will happen for sure on every claim, but it does affect how the insurance company will look at your claim in any grey areas.

In some occurrences having loyalty simply isn’t enough to get a claim covered that you think should be. The insurance companies all have rules that they follow and sometimes you simply need a good broker who will be your advocate in these types of situations. A strong broker will push against the insurance company in your favour and fight for the fact that your loyalty should be rewarded and not punished.

Home Evaluations

When you switch to a new insurance company for your home insurance the new insurance company will request a house evaluation to get the right rebuild value for your home. Often times when these evaluations are requested, they might even request that the home be inspected for any safety or underwriting concerns. If there is a chance that your home has any required repairs after the inspection, you will have to fix those either before you get your coverage or within 30 days of the coverage starting. If you are unable to financially fix these items in your home, it could land you without insurance at all. If you are in this situation, it would be worth it to get your home repaired prior to trying to switch insurance companies.

You may also find yourself in a position where you need to provide new certifications that your home is safe. If you have a wood stove that heats your home, you may need a new WETT certificate. If your home has aluminum wiring, you may need to prove again that it’s safe.

These situations could cost you money and possibly even make switching not worth the time or money. It could be as simple as having to put a railing on the stairs or porch, but sometimes the repairs are costly like replacing an old roof or replacing that old lead and galvanized plumbing. If you own a heritage home, there is a good chance you will have to get some portion of your home up to code.

There are too many different scenarios to list them all, but if you have anything in your home that falls into our “dirty words when it comes to home insurance” article, you may want to get those taken care of before you try to switch insurance companies.

Coverages

Insurance is a hard subject and no one is pretending it’s easy unless they are trying to sell you a basic simple policy that won’t actually protect you. Insurance is complicated because it’s based on laws and probabilities of risks. When you are looking at another insurance company, the premium amount may be the only thing you care about. That’s okay, but it’s critical to look at the coverages they are offering you.

There could be endorsements that are missing such as water coverages, lower accident benefits, or the policy could be written on a non comprehensive form that doesn’t have close to the same coverages.

For these reasons, it is always suggested that you enlist the help of an insurance professional to help you make the right decision for you and your family.

Service

If you are currently insured with a brokerage who analyzes every piece of insurance documents sent to you from your insurance company, it could be a devastating hit when you are the one who has to check those documents. If you don’t know insurance like the back of your hand, you could be the reason why you don’t have coverage for an accident that happened. Now you’re stuck with that same cheaper insurance, but you also have to replace your property that wasn’t properly insured out of your own bank account. Usually the costs associated with replacing your property are not worth the savings from switching companies.

The Final Advice

Switching insurance companies is a harder decision than it seems at first. Yes you might be able to save a few dollars, but at what cost? Are the coverages the same or are you getting worse coverage for less money?

When making these types of decisions it is always a good idea to get the help of professionals who specialize in this area. They can help guide you through what will be the best decision for you, your family, and your property.

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