insurance question

[debtfreeme]

So I got a speeding ticket three years ago that is going to come off my record in july. My re rate for my insurance happens in june. My agent mentioned us being able to cancel the first policy in july and writing a new policy to save about $700 per year.

Does anyone know of anything negative about canceling and rewriting an insurance policy? I want to make sure that if I do this I have no problem with my credit or in the future. When I asked him he said there are no problems with this and that he can only do it if I demand it. I just feel uneasy and want to make sure the rest is safe and taken care of.

Do any of our esteemed members have any suggestions or information?

Thanks!

[sweeps]

I don't know, it sounds suspicious to me. The insurance company should lower your rate without having to write a new policy, do another credit check, etc. etc. Maybe the agent gets an extra commission bonus for each new policy he writes?

An exception might be if you're getting a different kind of policy. For example, Allstate has this new policy type called "Your Choice Auto" that offers accident forgiveness, new car replacement and deductible rewards. (Not recommending Allstate by the way, just offering an example. In fact I just recently switched from Allstate after being a customer for 8 years and saved 50%(!!).)

[34saving]

Does your agent deal with one insurance company or many? It's possible that in July you'll qualify for X rate with Y company, but now you're stuck with Z company because of the ticket. If you're switching companies the policy will have to be cancelled and rewritten. (BTW, I've switched companies many times chasing rates and have never had any problems . . .though I don't watch my credit score particularly closely . . .it's just always been high enough to do what I want to do.)

[poundwise]

I don't think there are any real scary issues here, just be sure your insurance company doesn't charge you a fee for terminating a policy early. Mine did, but the savings I made over the course the first three months of my new policy, which corresponded with the time remaining on my former policy, more than covered that fee.

[sweeps]

Good point, 34. Would make a difference whether this is an insurance agent or an insurance broker we're talking about.

[bharman]

The reason your agent wants to re-write your policy is probably because they don't run another MVR at renewal to show that your ticket fell off the 3-year mark. There's nothing wrong with doing this. Just talk to your agent and try to make sure you re-write at renewal in case of a cancellation fee.

[debtfreeme]

he said that the insurance commission says either we have to just renew the policy and be good for a year with that rate or re write this one and cancel it in 45 days and write a new one so the ticket drops off.

I have had the same policy since i got my own car and got off my moms policy in my early 20's so it has been about 10 years or so. Does it reflect better to have one long policy or does it look bad to change it now after so long? i just dont want it toaffect any of my records or anything. I have great credit but i don't want to have anything affect it as i get ready to buy a house in the next couple of years and saving 700 is a nice change.

[34saving]

There will probably be an inquiry on your credit report (but there might not be since they've already pulled it once.) Other than that it shouldn't have any impact at all. My credit report doesn't list any insurance I have . . .much less who it's with or how long I've been with them . . . I use an insurance broker (deals with lots of different insurance companies) and he ends up switching us around quite frequently. We've saved thousands by not being company loyal.

[sweeps]

I agree with 34. Loyalty to a company doesn't count for much anymore -- in fact usually it just costs you.

Just make sure you don't have any breaks in your insurance coverage. That can be a bad thing. (That's why it's suggested if you don't plan on driving your car for, say, 6 months, to still keep the minimal liability insurance on it, so you don't get gouged when you re-apply for insurance.)