Policy Jumping - Switching Insurance Companies
Posted by: info | September 9, 2007
Many auto insurance agents don’t like to sell customers a policy who switch insurance companies too often. These agents consider a customer as a high risk if they switch companies more than 2 times in a year. These agents will not charge more for these customers since they can’t. However, customers who switch auto insurance companies a lot often are in a higher risk tier.
Consumers really don’t have any reason for changing insurance policies more than twice a year. The most common reason to switch a policy is for price. There is nothing wrong for changing your insurance company to get a lower rate. However, you should do this wisely. A good rule of thumb is to keep your policy until it expires. This is the time to shop and compare other companies rates. There is really no good reason to shop for auto insurance in the middle of a policy.
Other reasons for changing insurance companies for many consumers is due to bad service, not getting information needed, trouble with an agent or company. These can be valid reasons for wanting a change in your auto insurance policy. However, if this continues to happen then it may not be the company causing the problems. Some people use these excuses because they don’t get what they want or ask for something that is not possible.
The sad fact for why many drivers who like to policy jump (policy jumping is a consumer who goes from policy to policy several times a year for invalid or valid reasons) don’t do it for good reasons. Many of these drivers have not paid off their old policy or find reasons for not paying their bill on time. They get a policy and look for reasons to cancel or switch carriers. They often leave the insurance company with no warning or notice. They may get a month or two for free and switch once the insurance company cancels their policy.
Policy jumping hurts consumers more than they think. A typical policy jumper has bad credit or doesn’t care about their credit. They know that by not paying their insurance bill, the insurance company will report it on their credit report. Often times these individuals try to protest or dispute the debt. Policy jumping can also result in higher premiums for these individuals.
Bad credit and the lack of keeping continuous coverage will cost jumpers money. Insurance companies check credit reports and will most likely charge higher rates for these items. They will also have a good idea of how many insurance policies a consumer has had based on credit reports. This report can provide enough information for a company not to provide you with coverage in certain cases. If they do insure a policy jumper it will result in a higher rate.
Don’t take this information wrong. Switching companies is not a bad thing. This is very true if you can save money, get better coverage or service. Changing polices to avoid paying off your policy or because a driver can’t afford it isn’t right. The overall result forces good drivers to get stuck with part of these extra cost.
Posted in: Insurance, General |
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