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  • Writer's picturejoseph retcho

Cancelling Insurance Checklist

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People cancel and switch insurance companies for a variety of reasons. One of the most common reasons for an insurance policy cancellation is poor customer service, such as an agent who is difficult to reach. Customers frequently switch companies in search of lower premiums, while others have had negative claims-filing experiences. Whatever the reason for canceling or switching providers, it is critical to do so correctly. Here are few things to think about before making a final decision.

Whether to Inform Your Insurance Agent

You can cancel and change insurance providers by contacting your agent or simply ceasing monthly premium payments. However, it is strongly advised to call him or her and make an appointment. Of course, your agent will inquire as to why, so be prepared to respond. Agents also explain how to cancel a policy correctly, which is another reason to meet with them.

If, on the other hand, you decide not to notify your agent and simply stop making monthly payments, your policy will automatically terminate or lapse. If you choose this option, be aware that it is not the most prudent way to cancel a policy. Consider how it may have a negative impact on your record by making it difficult to obtain new insurance.

Penalties that could be imposed

Check to see if you have any penalties before canceling an old insurance policy, which is another reason to consult with your insurance agent before canceling a policy. If you do have penalties, you don't want to have to pay more for your new policy because of penalties from your old one.

The Difference Between Your Old and New Insurance

To avoid coverage gaps, make sure your new policy is active before canceling the old one. A lapse in auto insurance coverage is especially dangerous. Aside from the risk of being in an accident and not having coverage, insurance companies tend to offer lower rates to drivers who maintain continuous coverage.

Period of "Free Look"

Inquire if an insurance company provides a "free look" period. This is a time frame during which customers have full coverage while reviewing a policy. After reviewing the policy's conditions and terms, some people decide it does not meet their needs. In this case, the contract is canceled, and they are fully refunded for paid premiums with no penalties.

Other Considerations and Cautionary Notes

  • Don't just assume that your previous policy has been cancelled. That is why you must contact your old insurance company's agent to confirm the cancellation. You may still be billed if it hasn't been canceled. Don't rely on word of mouth. Request a confirmation letter instead.

  • Even if your insurance company does not require you to cancel your previous policy in writing, it is still best to do so to avoid confusion.

  • Request quotes from several insurance companies, making sure they are based on the same coverage as your current policy.

  • If you paid in advance for your previous auto insurance policy, you are entitled to a refund for unused coverage.

In conclusion

Before canceling a policy, make sure it's absolutely necessary or that you can replace it with a better one. Instead of rushing out to get a new policy, take the time to weigh the benefits and drawbacks of switching providers. Also, do your "homework" by comparing what different providers have to offer. Unfortunately, people frequently switch insurance companies only to discover that the new policy provides less coverage than the previous insurance.

Do you need high-quality commercial insurance? Then get in touch with us. Our insurance specialists work with a diverse range of businesses.

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