Pain in the Butt! 6 Factors that Make Switching Insurance Companies and Firing Your Agent All Worth It

There are more than a million reasons why I love my wife. She’s hot, she’s a great mom, she cooks (every once in a while), and she does the laundry — although my jeans are always wrinkled–love ya baba! :)

Another BIG reason why I love her, is that she handles all the insurance stuff with our household. She’s on the phone for hours deliberating with the insurance companies about what we owe and what we’ve already paid that they never seem to have the record on.

Recently, we decided it was time to switch insurance companies and she, being the awesome wife that she is, took on the task. Here’s her experience on the whole ordeal of changing insurance companies and firing our agent. Take it away sweetie…..

There are several reasons why a person might consider switching insurance companies. I assure you that doing it for fun is not one of them. Perhaps the company you are currently insured by is going out of business or maybe the rates from other insurance companies are more affordable.

We had been with our insurance company for over five years. We personally knew our insurance agent, as he was a friend of mine from high school. I trusted him and I knew that we were in good hands. Earlier this year, our agent decided to switch jobs, leaving us with a new agent that we did not know.

This was the triggering factor in our situation to start shopping for new insurance. I knew we were paying a little higher premiums that other people I had talked to, but since we knew our agent and felt comfortable with him, we were okay with that.

However, when he left, it was a prime opportunity for us to take a look at some different options and reevaluate our situation. And WOW, what I found out was….I should have been comparing rates and coverage WAY before my agent had left.  We were paying substantially higher rates than we needed to be. Doing business with a friend can be tricky like that. You want to be loyal, but you also want to make sure you are getting the best bang for your buck. Be careful.

It can be time consuming to compare insurance rates…trust me. I spent more than a few hours doing my research and talking to different insurance companies to get quotes. I assure you that if you end up saving a substantial amount of money then it’s totally worth every second.

Whatever your reason there are a few things you should consider before actually making the switch from one insurance company or agent to another. Here are some things that I considered when I was comparing companies to ensure we were getting the best coverage at a reasonable rate.

1. Multiple policy discounts

If you are switching insurance companies and you have more than one policy at your current provider, consider the discounts that may be applied to your policies for having multiple policies with one provider. It may make sense to move not one but all of your policies to the new provider to continue receiving the multiple policy discount. We had our Homeowners, auto, and umbrella policies all with the same company. We saved over $250 a year on just our auto insurance for having a multiple policy discount.

2. Research the company as well as rates

With various tools available on the Internet you can shop for insurance rates from the convenience of your home. You can compare rates and get quotes from dozens of companies. While comparison shopping for the best rates is one of the first steps in saving money, it is also important to research the insurance provider as well. There are many new companies that are starting that might not have the experience nor resources to provide the coverage you will need should an accident or disaster strike. It doesn’t make sense to pay for insurance policies backed by a company that is unable to provide the protection you need at the time you need it.

Changing Insurance Companies and firing your insurance agent

Guess I need to call my insurance agent

In 2009 we experienced an “inland hurricane” and had the chance to really “test” out just how good our insurance provider was. Luckily, they covered all of the damage and then some, without any fuss. This is where it comes in handy to trust your agent. However, we had several neighbors that spent months fighting their insurance company trying to get money for their home repairs. Do your homework and make sure that your company is not a bust! After all, what’s the point in paying for insurance if the company isn’t willing to honor your claims? Cheaper is not always better.

3. Switch companies at the right time

Whenever possible, try to switch companies when your current policy is set to renew. Insurance companies usually send out important details regarding your policy a few weeks before it is due to renew. You can use this information to get current details and rate information that can be used when comparison shopping. This is what I used to compare our current rates with the competition. In addition, you will avoid any cancellation fees that might be attached to your policy by switching before the term is up or prorated amounts for switching in the middle of a policy period.

Our previous insurance company charged a $75 fee for cancelling our policies before the policy end date. However, we were willing to pay the charge since, by switching companies, we were saving over $300 a year. Weigh your options.

4. Compare coverage between insurance companies

Before making the switch to a new insurance company you must take the time to compare the coverage provided to ensure you are not getting a great new rate but substantially less coverage. It doesn’t make sense to save a few hundred dollars in premiums if it costs you several thousand in the long run. Make sure you compare apples to apples. Any insurance company can “get you a cheaper rate”, but can they get you a cheaper rate with the same amount of coverage? I had numerous insurance companies try and tell me that they could beat my current rate, but when it came down to it, most of them were providing less coverage.

The insurance company that we ended up dealing with was not only able to beat our current rate, but they were able to provide MORE coverage than our current policies.

5. Accessibility of your insurance agent

Make sure that you are choosing a trust worthy insurance company that is available when you need them. Have you ever tried to get a hold of your insurance agent? I have waited longer than a week for my insurance agent to call me back and we are friends. Now think about it, what if you needed something important, you were in an accident or your house burnt down, would you want to wait a week before your insurance company got back to you. Not likely. When calling to compare rates, make sure that the agent is accessible and willing to take the time to speak with you within a reasonable time frame. It will be a foreshadow of your future relationship with them.

6. Policy cancellation

Switching Insurance Companies

Making the switch

Once you have done all of your homework, researched company history, rates and coverage and picked a new insurance provider, don’t forget to cancel your old policy. Do this in writing and request an official cancellation notice to keep with your records. This proof may be needed in the future if there are questions regarding payments or coverage.

Everyone wants to save money and changing insurance companies can save hundreds or even thousands of dollars per year. It took me over two weeks before we finally settled on a new insurance company. The whole process was a pain, but I know it will save us thousands over the years. I just hope I don’t have to do it again any time soon. :)

This is a guest post from my awesome wife Mandy Rose. She can check out more about her and our fam at her blog House of Rose.

Creative Commons License photo credit: //dotism

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Comments | 1 Response

  1. David says

    Your article makes sense for P&C insurance, where the agent usually represents just one company. But I would definitely recommend having an independent broker helping you with your health insurance. There are a lot of carriers with a lot of different types of policies. Understanding what you’re getting is not easy and comparing the options that meet your needs from all available carriers, understanding other variables like carrier reliability, provider networks, etc is too much. Insurance is the same price no matter where you buy it, so there is no cost for a broker. And it is more efficient for the health insurance carriers to have a commissioned broker helping you out, so they don’t put too many resources into having in house help for you if you have problems with claims, billing, etc. A broker can really help in a situation like a claim issue since they know who to talk to at the insurance carrier, can help decipher EOBs, know what to say to the claims dept, etc.

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