Switching insurers mid-policy – here’s how to do it

Switching insurers mid-policy – here’s how to do it

Breaking up is hard to do – but not in the case of your insurance company. You can switch insurance to whichever company you want, whenever you want. It should never be difficult or ‘wrong’ to change insurance companies. You might want to hold out for a no-claims bonus or think that your loyalty will be repaid with lower premiums, however if you feel that your insurance provider no longer has your best interests at heart, it might be time to move on – no matter what time of year or at what point of your policy term you are.

What is a policy and what is a term?

Remember that short-term insurance is different from things like medical aid and life insurance in that it doesn’t impose blackout periods or conditions which stipulate when you are allowed to claim. You are 100% covered on your car, home contents or buildings from day one. You don’t get more covered as time goes by.

If you pay premiums on a month-to-month basis, you can simply notify your insurer that you want to cancel your policy (your contract). That’s it – simple as that. They may try to woo you with reduced premiums but you are under no obligation to accept their offer. It doesn’t matter if you’re approaching your renewal date or if you are in the middle of your policy term (mid-policy or mid-term).

If you’ve paid for a whole year in advance – i.e. for a 12-month term/duration – and you cancel halfway through this period, your insurance company will pay back your premium on a pro rata basis. The only reason why they won’t pay you back is if you’ve claimed to the value of the maximum insured amount.

Tip: Remember that all insurance companies look at your claims history to determine your insurability as a client so if you’ve made a lot of claims during your term, a new insurance company might charge you a higher premium than your existing provider. A poor claims history, a previous insurance policy cancelled by the insurer due to excessive/ fraudulent claims and a high risk profile (e.g. geographical location or high performance vehicle combined with an inexperienced driver) are all reasons why you may be refused insurance.

Reasons to switch insurers

Here are a few common reasons why people decide to call it a day with their insurance company. Have a look to see if any of these apply to you and if it’s time to get a new quote:

  1. Price: In the current economic climate, many people have to tighten their belts and insurance cover is often the first budget item that gets relooked. Cheaper is, however, not always better.
  2. Service: Perhaps you made a claim and weren’t happy with how it was handled? Or perhaps it wasn’t paid at all? You want to be with the insurer who looks for reasons to pay you rather than NOT.
  3. Coverage: Perhaps you need a niche type of insurance cover that your insurer doesn’t offer or you feel your existing cover is too restrictive.
  4. Excess: A co-payment can bring a nasty surprise at claims time – perhaps you want to move to an insurance company with more favourable excess amounts?
  5. Added extras: Insurance companies offer a lot of extra benefits to add value, from handbag cover to take-home services to SOS assistance. You might feel that your current insurer is falling short on this front.
  6. Bundle offer: Perhaps you are looking at combining home and car insurance.

Opportunities to relook your insurance

Even if you are not unhappy with your current insurer, it might be a good idea to review your cover if:

  • You recently got married or divorced, and you are restructuring your assets, responsibilities and finances.
  • You want to add or remove a driver who no longer lives with you – e.g. a student child who has moved or a child who just got their driver’s licence.
  • You’ve bought a new car or home, or a lot of new and expensive tools/furniture/electronic equipment.
  • You’ve just welcomed a new dog into your home and want to raise your liability cover.
  • You’ve changed jobs and want to update your mileage or where the car is parked, for example.

Things to remember before changing

Before you make a decision to switch insurers, be sure to compare the extent and limits of cover to your existing policy and check your new policy for excess fees. The deal you are getting may not be as great as you think if you discover that your new insurer offered you a much lower premium at the expense of your type of cover and insured amounts.

If you’re ready to change insurers, switch to Santam for comprehensive car and home insurance. Plus read our guide on the 7 things you need to know about switching insurers. 

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