Car Insurance Penalty

Company Trusted For Over 25+ Years*

Car Insurance Penalty

car insurance penalty
There are numerous strategies insurers use to keep your policies renewed and keep you from canceling. One popular tactic is to impose a so-called car insurance penalty for canceling, in the event you terminate the policy prior to the expiration date. Car insurance companies have used this trick for many years and for many people it works. One of the reasons these works is lots of people are uninformed about possible fines and how much they are. They are often insured without ever even reading the all-important fine print, where most of this information about cancellations is found. Lots of people just take the easy route and renew their insurance because they do not want to hassle with fees they are not even aware of. Here are a few basic tips that will help you make better-informed decisions about your insurance renewal.

  1. Calculate how much the penalty is versus the savings you will get by switching.

If you will have to pay a $200 penalty for terminating your automobile insurance but will save $300 by switching to a new company, then it is probably worth it. However, if you are paying a $200 penalty for a $100 savings, then you might want to wait to tell it expires and then make the switch over. You also might be upset with your auto insurer for fining you and just want to make a change regardless of the financial costs involved. Get your rate check-up with good to go insurance online.

  1. The longer you have had insurance with the same provider, the smaller the penalty will be.

Someone that cancels after two weeks might end up paying $400 in penalties and someone who has been covered for 11 months might only get hit with $50 or less. Again, before you sign and activate your coverage, read all the fine print and know what kind of deal you are getting involved in.

  1. Call your current insurer and threaten to change companies unless they lower their rates.

This is a simple tactic now many people take advantage of. If you like your insurance provider but they are a bit too expensive, and they are charging cancellation fines, call them up. Tell them you are getting quotes from competitors that are 15% lower and you are willing to stay but want a better rate. There’s a good chance they will reduce your premiums and get you a better deal. It only takes a few minutes to do this, and the worst-case scenario is they turn you down. In that situation, it is just more motivation to change firms.

  1. Read the Cancellation Rules on any new policy you are considering

If you find cheaper ins and want to jump over, make sure the new provider does not have massive penalties written into the agreement. The last thing you want is to pay a penalty for switching and then get imposed another huge fine with your new insurer. Get on the phone and ask the rep about all the fees and fines and then thoroughly read everything, especially the small print.

  1. Find a Direct Insurer that does not impose cancellation fees.

If you are like me and hate added-on fees, then go to find a carrier that does not have them. Many direct providers have done away with car insurance penalty programs and allow you to cancel at any time. This is an ideal financial situation, enabling you to get internet-based rates without fear of getting hit with fees if you decide to end your policy. If more people go this route, the old fee-based cancellation ins model may eventually be a thing of the past.

Now that you know how to avoid extra cancellation fees, you should take a few minutes and try to get your rates lowered. The best place to find a better car insurance deal is online. Sites like good to go insurance search for the cheapest plans with the coverage you choose. You can compare prices and companies in only about five minutes. Get your free no-obligation quote online and see how fast you can save hundreds on car insurance.