One: When switching insurers, you need to cancel your initial insurance policy officially.

When you purchase car insurance, your insurance company is likely to say that you can terminate your coverage any time. All you need to do is to notify the company in writing the date of the termination. However, many customers assume that they can cancel the coverage just by disregarding the bill. Know that if the bill is not paid the second time around, your insurance company will terminate your account for non-payment and this will reflect on your credit record.

What You Should Do: It is best to call your agent or any of your insurance company’s representatives and inform them that you are cancelling your coverage. Indicate the date of your cancellation otherwise; you might end up uninsured for a long time. Next, wait until your insurance company sends you a cancellation request, you will need to check for errors, just to be sure. You may also need to prove to your former insurance provider that you purchase car insurance from another company.

Two: You are responsible for your friend’s poor driving.

No matter the policy or the rates for car insurance that you paid, you will have to file the claim with your car insurance once you let someone else borrow your car and crashes it. It is you who will pay for the deductibles that apply to the policy you bought and yes, rates may increase as a result of filing a claim. More so if you made any recent claims.

What You Should Do: If the person who drove your car did not have your permission, you may not be held liable for damage. If your friend is not insured and inflicted damages that exceed beyond your policy limits, the injured party may come after you for medical and property damage bills.

Three: You will increase your overall bill if you pay in instalments.

Whenever you divide your annual premium payments into instalments rather than paying a year’s worth of coverage at once, you will be charged with “fractional premium”. Although payment terms offered by most insurance providers are presented on a six-month, quarterly, or monthly basis, almost all companies will charge an administrative fee for dividing the payments. The more you break the fees down, the more charges will apply regardless of the rates for car insurance.

What You Should Do: Always ask how much are the charges if you settle for instalments, right off the bat. If the charges will not cost you much, then it may be worth a shot. That said; know that insurance providers have the right to cancel your policy due if payments are delayed. The payment process is much more simplified once it is paid annually.

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