Although the price ranges from provider to provider, there’s no getting around it — car insurance is expensive in Canada. Most Canadians pay thousands of dollars for car insurance each year.
If you feel like the grass is greener on the other side, then it may be time to start shopping for a new car insurance provider. Re-shopping your policy is a fantastic way to save a significant amount on car insurance in Canada.
With that being said, you shouldn’t be overzealous about the process. Drivers need to ask themselves several questions before switching car insurance providers. Some of these questions include, “is switching car insurance providers worth it?” and “can I change car insurance before renewal date arrives?”.
We can help you answer these questions and many more.
Why do drivers renew auto insurance policies with different providers?
Switching car insurance providers is more common than you’d think — the average Canadian driver switches providers every five years or so.
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So, why do Canadians switch car insurance providers? The following are some of the most notable factors:
Overcharged by providers
Canadian drivers want to feel valued and respected by their car insurance providers. If you feel like your car insurance provider is overcharging you for coverage, or you’ve noticed a number of unexpected rate increases, you may want to look to greener pastures.
Poor service
How an insurance company deals with policyholders says a lot about how they conduct business in general.
For instance, a quality insurance provider will ensure that your needs are met, questions are answered and that you’re satisfied with their service. Furthermore, a reliable car insurance provider will do their best to make the claim-filing process smooth, simple and straightforward.
If you’re not satisfied with your car insurance provider’s level of customer service, consider opting for a different company.
Moving to a different province
If you’re thinking about moving to a new province or distant city, you might need to renew car insurance with another provider. Doing this can be quite tricky, especially if you’re satisfied with your current provider.
Can you get an insurance renewal with a different provider mid-term?
Despite the rumours you may have heard, drivers in Canada are free to switch car insurance providers any time they please.
However, if you choose to switch insurance providers mid-term, you will likely have to pay a cancellation fee.
How much is a car insurance cancellation fee?
The price of a car insurance cancellation fee depends on the price of your insurance premium. Most car insurance providers in Canada charge a short rate fee, which generally equates to about three weeks (roughly 5%) worth of your premium.
Here’s a simple example:
You decide that you want to switch providers, so you notify your current car insurance company. You’re currently paying $1,500 a year for car insurance. That being said, we can calculate that your provider will charge you approximately $75 for cancelling your insurance policy.
You can avoid paying a cancellation fee by switching providers at the end of the term.
Bonus tip — Not all car insurance companies charge a cancellation fee. Be sure to ask your car insurance provider if you have specific questions about cancelling your car insurance policy.
Is switching car insurance providers mid-term worth it in the long run?
There’s no black and white answer to this question — the answer depends on your situation.
For instance, some drivers don’t have much of a say. As mentioned earlier, if you move to a different province or distant city, you may be forced to switch car insurance providers. Drivers need to have car insurance, regardless of whether they are in the process of moving or not. So, for these drivers, making the change is not only worth it but also necessary.
In contrast, most Canadian drivers aren’t in a situation where they need to change providers. If you’re on the fence about switching providers, you need to assess the costs and savings.
As a rule of thumb, you shouldn’t switch providers mid-term unless you can save at least 10% on your current car insurance rates.
If you can’t reduce your premium by roughly 10%, the savings might not outweigh the costs. As mentioned earlier, most car insurance providers charge a 5% cancellation fee if you switch before the agreed-upon renewal date. If you pay a modest amount for car insurance (anything less than the provincial average), then you should be able to save more than you spend.
On the other hand, if you are a high-risk driver, you most likely pay more than the provincial average. Because of this, the cancellation fee may outweigh the benefits of switching providers.
Can I keep my insurance broker if I switch car insurance providers?
We’re flattered that you asked!
In most cases, yes, you are able to work with your current insurance broker if you switch providers. Canadian insurance brokers work with numerous providers throughout the country. So, as long as you switch to one of the providers that your broker works with, you can continue utilizing them.
Want to save on car insurance in Canada? Count on the Surex team
Speaking of insurance brokers, have you reached out to one of our team members? Our insurance brokers can help you save an impressive amount on car insurance — often up to 25%!
Best of all, getting car insurance quotes from Surex is quicker and easier than ever before. Our brokers can provide you with ten or more personalized quotes in ten minutes. Instead of waiting in an office, you can search for quotes from the comfort of your own home.
Call or click today to learn how we can help you save the next time you switch car insurance providers.
Do you have questions about switching car insurance providers?
Finding a new car insurance provider can be a stressful ordeal, especially if it’s your first time re-shopping your policy.
Thankfully, after reading this article, you can tackle the provider-switching process like a pro. If you have any last-minute questions, feel free to reach out to one of our experienced brokers.
