Insurance renewals are an opportunity to save money

Shopping around can put more money in your pocket.

Insurance renewal time provides drivers with the perfect opportunity to make sure they’re getting the best deal on car insurance. While drivers can shop around any time for quotes, there are several good reasons why renewal is the perfect time to compare current policy with what’s available elsewhere.

Renewal rate increases – the thing that most often sends drivers in search of new insurance quotes is finding a rate increase on their renewal. Rate increases can happen for a variety of reasons; a ticket or accident on record, the insurance company may have made rate changes to your policy in particular, or there may have been a general rate increase to all of the company’s policies. No matter what the reason, seeing rates increase is a good sign it’s time to shop around.

Benefits of switching on renewal – when choosing to shop around and potentially switch to a new insurance company on renewal date, drivers save themselves more than just the difference between policies. Firstly, insurance companies often charge penalties for cancelling a policy in the middle of the policy term. Some companies don’t charge a penalty but will use a system called short-rating in which the money refunded may not be the fully pro-rated amount the policyholder should get back. This is another way of penalizing for ending the policy before the term for which it was rated. When switching to a new company on renewal date rather than renewing an old policy, risk of penalties or short-rating are avoided.

In addition to avoiding the penalties of early cancellation, you also make it easy on yourself when you change companies on renewal. You will simply pay the new company rather than renewing with the old. This keeps your payments steady and right when and where you expect them and have planned for them in your budget.

When to start shopping around – a few weeks prior to renewal date, a new policy will be sent out. As soon as that information is received, start comparing quotes. You will know exactly what coverage you’re receiving now in order to get quotes for the same level of coverage. By comparing apples to apples on coverage, you can be certain that a lower rate really is a better deal, and not just lower because the coverage is lower. Shopping around right when your renewal paperwork arrives also gives you the most possible time to make a decision on whether to continue with your current company or switch. Quoting sites like InsuranceHotline.com make it easier by comparing rates against over 30 insurance companies.

Not ready to switch – while renewal offers a great opportunity to shop around, that doesn’t mean you have to switch then. If you don’t find a better deal at renewal time, you can still go back and look at rates in the future. Shopping around doesn’t mean you have any obligation to switch insurance companies, so if you decide to stay where you are you haven’t lost anything.