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Switching Insurance Companies

Have you been considering switching auto insurance companies? Before you start collecting automobile insurance quotes, there are a few things you should consider, such as tenure with your current company. Tenure with an insurance company is important for many reasons - for instance: if you are involved in an automobile accident and your vehicle is damaged. The way the insurance company handles your claim may be a direct reflection of your tenure with the company.

For example: Lets say the front bumper was damaged in an accident however the damages were not found until several weeks after the initial repair had been completed. In this situation the insurance company may likely review your policy history including your longevity with the company. If you can not prove the damage was a result of the accident the company decline your request to have further repairs made.

Example Two: Now lets say you are considering moving your automobile insurance to a new company that has offered to save you $10 a month. Lets say you are considering this move because you like many other people have been negatively effected by the economic down turn. By excepting this savings you would be leaving your current insurance carrier after 10 years of loyalty. Now this sounds like a great deal - you could save $120 a year, however there is a down-side. If you elect to except this new offer for insurance you will be starting out as a new customer. Now lets move one step further and say you experience a further decline in your income to the the prior mentioned economic situation and you get behind on your insurance payments. As many of us do in tough financial times we hold onto our cash until the due date. If your policy lapses due to non-payment you will need to contact your insurance agent and request a policy reinstatement. As in our last example, the insurance company will most likely review your policy history and tenure when deciding weather or not to reinstate your policy. At this point it is very possible the insurance company may decline your request for reinstatement because you do not have a history with them.

Now lets look at the repercussions of having your policy terminated. Now you have a lapse in auto insurance coverage. All insurance companies that I know of give a discount for maintaing prior insurance. If you request a new quote and cannot provide them proof of prior insurance they will increase your premium. So now you are paying more money for the same amount of coverage and are once again starting out as a new customer.

I have only covered a couple of scenarios where keeping an existing insurance policy may be the wise move. With that said: If you are paying extremely high premiums and you can find the save coverage from a reputable company, it may be in your best interest. There are many factors to consider. My goal was to get the thought process started and to provide a little insight as to how your decision may impact you in the future. There is no right or wrong answer - simply think if the savings out weights the benefits to staying with your current company.

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