When Should You Change Insurance Companies?

Most of the time, it doesn’t matter if your insurance is good or not; you pay your premiums and go about your day. But in a crisis, it’s crucial that your insurance company has your back. If the insurer you’ve been paying fails to come through for you, a bad predicament can turn into a real disaster.

Luckily, you don’t have to wait for a crisis to know if your insurance company is a dependable choice or if you need to switch providers. Here are some signs to look for now to make that decision.

Abrupt rate increases

Your insurance premiums take many factors into consideration, so unless your circumstances have drastically changed, a sudden, unexpected rate jump should be a red flag.

“It could be that the insurance company has recalculated their risk profiles and you have been grouped into a higher risk classification,” explains insurance expert Jonathan Fritz, in an interview with The Simple Dollar. While insurance rates do follow marginal inflation rates every year, Fritz recommends that rates jumping by double-digit percentages should be a sign to shop around.

Better rates elsewhere

While you shouldn’t leave a trustworthy company just to save a couple bucks, you may be paying twice as much for coverage as you would elsewhere. If you don’t keep an eye on gradual premium increases, you may wind up paying far more than necessary a few years after your initial research.

That’s why it’s always important to see if you’re getting a good deal. “You often can find virtually the same coverage for many different prices when shopping among a variety of insurers,” says Emily Delbridge of The Balance, concerning automotive insurance. “You should look around before you buy, and continue to shop every couple of years to ensure you are getting the best deal.”

If you notice a significant disparity between your current rate and other going rates on the market, you may be able to negotiate a reduced rate with your current provider. If they won’t budge, it might be time to move on.

Communication is poor or nonexistent

If you’ve paid for coverage from a provider, it’s important that you can get in touch with a representative — whether you’re in an emergency or not. If you can’t get in touch with a company agent or are noticing that you’re not on the same page as them, that miscommunication will likely only worsen when you’re in an emergency.

“If it’s particularly difficult to get in touch with your provider, there’s a good chance they’re giving you the runaround,” warns Michael Goldberg of attorney firm Fried Goldberg LLC. “Lack of communication is an alarming sign that could mean your insurance company is acting in bad faith.” Make sure that customer service is a top priority of your provider, because it could make or break a claim.

Rampant customer complaints

You don’t have to wait to be in a disaster to know if your insurance company is reliable or not; you can read testimonies of other customers who have been in such situations. Periodically comb through the recent online reviews of your insurance provider to look for any alarming trends that go beyond one-off tirades.

Although any company will receive a mix of positive and negative reviews, keep an eye out for a recent wave of complaints. “Are customers leaving bad reviews online about your insurance provider? It may be a good idea to check and see if people are having problems,” recommends Fritz. “If bad reviews are flying in, it may be time to shop around.”

Whether you’re assessing your current home, automotive, health or other type of insurance coverage, it’s always important to make sure you’re getting a good deal from a reliable company. If you notice any red flags, it’s time to explore your options.

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