3 big benefits to switching your auto insurance provider

Whether you're watching TV or listening to the radio, it's hard to avoid one of the many recurring commercials that urge you to switch auto insurance providers.

These commercials typically say you can save hundreds of dollars just by changing carriers. According to Robert Hunter, director of insurance for the nonprofit Consumer Federation of America, this often is the case. Because car insurance is highly competitive, you frequently can save money or find an auto insurer who offers better customer service.  

Benefits to switching your auto insurance provider Hunter says he was able to negotiate a discount for his own auto policy just by calling his insurance company and explaining he was thinking of buying insurance from a cheaper carrier.  His annual premium dropped from $600 to about $400 per year. "I saved almost 30 percent just by threatening to shop," he says.

He recommends drivers comparison shop every other year to make sure they're receiving the lowest rates. 

If you can't negotiate a lower price from your current insurance company, here are three benefits that often are available simply by switching your auto insurance carrier.

3 big benefits to switching auto insurance providers

1. Cut costs without reducing coverage

Michael Barry, a spokesman for the nonprofit Insurance Information Institute, says it's important to make sure you don't sacrifice important insurance coverage features for the sake of lower premiums. The way to do this is review the terms of your current auto insurance policy. You should  note the features most important to you before you consider switching carriers.

Amy Bach, executive director of the United Policyholders consumer group, says that before you buy a new policy, do a side-by-side comparison of benefits. Some insurance companies are able to beat your current carrier's prices because they don't offer the same level of coverage, she adds. For example, if you want to keep your comprehensive and collision coverages, make sure the new, less-expensive policy also contains them.

Each company has its own proprietary formula for setting rates. Bach says you often can cut your costs simply by finding a company whose formula favors your driver profile. For example, if you have credit problems, an insurer that prioritizes credit rating won't give you the best rates, Bach says. 

Because insurers won't tell you the specifics of their price-setting guidelines, you'll need to seek multiple car insurance quotes in order to find the best fit.

Bach recommends getting at least three insurance quotes. The more quotes you get, the better your chances of saving money, she says.

2. Switch policies and get better service

It doesn't matter how much your policy costs if you can't reach your insurance agent or your carrier is reluctant to pay your claims. Make sure the insurance company you choose has a good record for customer service.

Each year, J.D. Power and Associates -- an American-based global marketing-services company -- issues its U.S. Auto Insurance Study. This study measures customer satisfaction based on several factors. It includes customer interaction, price, policy features, billing and claims.

To get even more information about insurers, check with your state department of insurance. Because these departments regulate the insurance industry, their websites often are good sources for determining whether complaints have been filed against individual carriers. For example, the Illinois Department of Insurance reports complaints against carriers over claim disputes, premium issues, alleged sales misrepresentations and policy cancellations.

State attorney general websites also contain information about insurance companies. When a carrier is fined by a state for violating insurance regulations, these websites often post announcements. For example, in April 2013 Massachusetts Attorney General Martha Coakley announced an auto insurance company agreed to pay more than $200,000 to settle allegations of overcharging consumers.

3. Find extra perks and benefits

In addition to saving money and getting better service, switching car insurance providers can help you enjoy more perks, says Pete Moraga, a spokesman for the Insurance Information Network of California. According to Moraga, some insurers offer accident-forgiveness programs. If you're enrolled in one of these programs, generally the insurer agrees not to raise your premiums the first time you have an at-fault accident, after a period of being accident-free.

e noteThe rules for such programs vary, so be sure to check to find out how long you must be accident-free to qualify for this perk.

Another common perk is free roadside assistance but be careful - not all roadside assistance programs are equally helpful. Bach says you should check with insurers to determine out how many towing miles you are entitled to receive under the policy.  She recommends choosing a policy that will provide at least 30 miles of towing service.

Another perk is rental car reimbursement if after a crash, your car is in the shop for repairs and you need temporary wheels.

Before choosing such a policy, it's important to ask whether you'll be reimbursed for the total cost of your car rental claim. Some policies place daily limits on how much you can spend on rental cars. In addition, insurers may place a cap on the overall cost of your rental car claim. 

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