March 2, 2011

Ways An Auto Insurance Provider May Scare You Into Staying

Almost every auto insurance provider hates to lose customers. While some insurance providers may willingly accept your decision to switch to a new insurance provider, others may scare you into staying with them. While there is no legal obligation to stick with an auto insurance provider, few insurers may try to fool you or trick you in an attempt to retain your auto insurance policy with them. Let's have a look at the various ways by which an auto insurance provider may try to scare you.

While there are fees involved with the cancellation of an auto insurance policy, the fees are nominal. However, few insurance providers may charge you outrageous amount of cancellation fees in order to scare you. The fact that there are fees involved with the cancellation of a policy, you need to assess whether the switch would be beneficial or not. If the fees exceed the better rates, there is no point in switching the policy, especially when you are considering a switch in policy to save some precious dollars.

Almost every state requires vehicle owners to get a new auto insurance policy before canceling the old one. Most of the auto insurance providers are required to report termination of polices to the state insurance department so that the state can monitor those vehicle owners who do not own an insurance policy. The existing auto insurance provider may scare you by claiming that you will be reported as uninsured to the state insurance department. Your best bet would be to take a new policy few weeks in advance before the cancellation of the old policy to avoid any legal issue. Also, you can get in touch with the department of motor vehicles to let them know about the change in policy so that the state knows that you are not uninsured.

Individuals are advised to cancel their old policy before having a new one. It's a must that you don't assume that the old auto insurance policy will get canceled upon non renewal or non payment. The previous auto insurance provider may choose not to cancel your policy. Instead, the insurer will try to scare you by levying additional interest charges by carrying on the bill. Subsequently, one might receive frequent calls and emails related to non payment of the bill. To avoid such a situation, one must formally cancel the policy.

These are some of the ways by which auto insurance providers try to scare consumers so that they can retain the policies of individuals who are looking to switch auto insurance providers. Proper knowledge about the insurance market is the key to avoid the traps laid by these auto insurance providers.