Changing Insurance Companies Can Be a Hassle. Here's Why You May Want to Do It Anyway

Switching insurance companies is not something most people would describe as fun. Changing which insurer provides coverage for a home or an automobile can mean taking time to shop around and get quotes. It can also mean canceling a policy, stopping insurance payments from coming out of a bank account, and setting up a new payment process with a new insurer.

Despite the fact it can be a hassle, there are some good reasons to consider changing coverage anyway. Here are three of them.

1. A new insurer may offer a better deal

Sad as it is, insurance companies do not reward loyalty from customers. In fact, the reverse is true. When an insurance company thinks a policyholder is unlikely to shop around for insurance coverage, it may end up charging that individual more money.

There is no reason to accept higher rates when a different insurance company would offer more affordable coverage. But, people won't know that unless they shop around. After getting quotes, if a different insurance provider offers a better deal -- and the current insurer won't match it -- there's solid justification to switch.

Even a savings of $10 or $15 a month can add up to $120 a year or more, which is well worth going through a little bit of hassle for.

2. A new insurer could provide better coverage

Insurers offer different kinds of protections. For example, some insurers may offer a disappearing deductible that brings down the amount a policyholder has to pay out of pocket for each year that they don't make a claim. Others may offer special protections as well, such as coverage for pets hurt in a car accident or more money for a rental car while waiting for a claim to pay out.

Unless policyholders shop around and see what is out there, they may end up settling for substandard coverage. Their current insurer may not offer all the protections it would make sense for them to have, and they may not know it unless they look around and check out all their options.

That's why it's important to not just get quotes from several insurers each year, but also to look at policy offerings. If a different company provides better, more comprehensive coverage and a policyholder wants to transfer the risk of those particular losses, then switching to that company is worth the time and effort involved.

3. A new insurer could offer better customer service

Finally, it's important to make sure that an insurance company isn't just providing coverage but is providing quality coverage. If a policyholder experiences problems with customer service, whether that comes in the form of an improperly denied claim, premiums being charged incorrectly, or simply non-responsiveness to questions, then this alone could be worth changing companies.

No one wants to fight with an insurer in their time of need, so don't settle for a company that has already proven they won't take good care of their clients.

For any or all of these reasons, it may just make sense to switch insurance companies. Set aside a little time to see if a change is worth the effort.