How to switch providers when your car insurance is about to expire

If you are already a policyholder in the Philippines, then we assume that you know how important an insurance policy is for a car owner. It is not just a legal requirement that needs to be fulfilled, but an essential shield protecting your finances. Whether it's an accident, collision, or theft, car insurance covers such unexpected, unfortunate events.

While your car insurance policy protects you against several financial liabilities, did you know that it is your responsibility to keep the policy up-to-date? Every policy comes with an expiry date, after which you need to renew it. However, what if you aren’t satisfied with your policy or provider? Will it still make sense to renew the policy? Obviously, no.

In cases where a policyholder is uncertain about continuing their association with the provider, it is advisable to switch to a new provider that includes the process and documentation. Worry not, as we are here to guide you through the switching process and help you land with a provider with better coverage, benefits, and cost.

Making a switch - Basic understanding

What does switching a car insurance provider mean? It is an act wherein the policyholder decides to end the existing insurance policy and get coverage from a new provider. Thus, instead of renewing the policy at the end of the term, the policyholder moves to a new provider offering a policy with one or more benefits, including lower premiums, better coverage, and improved customer service.

Is it a common practice among Filipino policyholders? Yes, in the Philippines, it is common for policyholders to look for new providers with better policy features and cheaper rates. Or to be set free from the poor claim service of the old insurer.

Also Read: Step-by-step guide to renewing your car insurance in the Philippines

Switching car insurance providers - Common scenarios

A policyholder can switch their provider at several points, including -

Before the policy renewal date (mid-term): Many insurance providers in the Philippines allow clients to cancel the policy and move to a new provider mid-term. However, doing so might hit you with a cancellation fee or result in the loss of a part of the premium refund.
At the end of the policy (about to expire): This is the most common time and also the best to make a switch. Here, the policyholder will experience a smooth transition and avoid making payments for overlapping coverage.

Pro tip: Start exploring your options at least 30 days before your current policy expires. This proactive approach ensures you have enough time to compare quotes, gather necessary documents, and most importantly, avoid the risk of being uninsured during the transition.

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Prep for switching car insurance providers

Here are all the things that need to be done before you go ahead with the switching process -

Review your policy. Before you start the switching process, it's essential to review your current policy and assess your insurance requirements. This step will help you identify any gaps in coverage and ensure the new policy meets your specific needs.

Inquire about No Claim Bonus status and transferability. If you haven’t filed a claim in the past year, you become eligible for No Claim Bonus (NCB), which can reduce your new/renewed policy cost. If you are planning to switch providers, it is essential to check with your old provider about the transfer process of NCB (if they allow it).

Complete your paperwork. For a smooth transition, it is recommended to do some prep, including gathering commonly requested documents, including a valid driver’s license, OR/CR, claim & driving history, current policy, and proof of NCB benefit.

Switching car insurance provider - A step-by-step guide

Let us now learn how to switch providers when your current policy is about to expire -

Step 1: Compare quotes
The first and most crucial step is to compare prices and coverage of different providers. You can do so through third-party providers like Zen Insure or by going to an agent.

Step 2: Check coverage, exclusions, & benefits
When choosing a new insurance provider, focus on finding a policy that offers optimum coverage tailored to your needs and driving habits, rather than just a low premium.

Step 3: Notify the current provider
It is essential to notify your current insurance provider of your decision not to continue the association. This will help avoid situations like auto-renewal or unexpected charges. Plus, it gives enough time to complete any formalities.

Step 4: Apply for a new car insurance policy
Finally, it's time to move on. Please fill out the insurance application form from the new insurer, which can be completed both online and offline. Also, submit all the required documents.

Step 5: Avoid lapse
It is essential to ensure continuous coverage; therefore, time your switch carefully. Make sure your new policy starts immediately after the expiry of the old one. The point is you shall never be left uninsured.

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Mistakes to avoid when switching policies

Failing to investigate the reputation and customer service quality of new providers. Make it a point to read reviews and speak with current customers.
Selecting the new policy due to its low rate, despite completely ignoring the coverage. Instead, it is recommended to find the right balance between cost and coverage.
Overlooking the payment terms. Applicants often ignore the flexibility of payment options. It is essential to check the provision of monthly/quarterly instalments, auto-debt, or online payment, as they make a significant difference.
Ignoring hidden charges. Some policies offer upfront affordability, but in reality, they come with high deductibles and limited coverage. So, make sure to read the fine print.
Allowing policy to lapse without switching. In the Philippines, driving without insurance for even a day is illegal, and you could face legal trouble and a fine.
Overlapping policies and making double payments. Do not make the mistake of activating your new policy while the old one is still valid. Timing is the key to avoiding this unnecessary expense.

Also Read: No car, no problem: Why ‘Loss of Use’ coverage matters

Bottom line

Getting your car insured is not a one-time thing but a continuous process that you have to follow unless you are no longer a car owner. Usually, a car insurance policy is valid for a year (from the date of activation), after which it requires renewal. However, there’s one more option available: switching car insurance providers. The latter option is entirely feasible and highly recommended if you are not satisfied with your current provider, in terms of coverage, customer service, or claim process, or you have found a new provider with a better cost.

Anyway, switching car insurance providers is not at all complicated or a hectic process.
With just a little prep, such as analysing your needs and comparing quotes, you can opt for a new provider offering better coverage and cost.

Just remember that in the Philippines, you can not afford coverage gaps or go uninsured even for a day, so if you have plans to switch, start prepping in advance and do not wait for the policy to expire.

FAQs

Q1. Is it required to inform my current insurer that I am not interested in policy renewal?
Ans. It is suggested to inform your provider about your plans to prevent automatic renewal or any unexpected charges.

Q2. Can a policyholder switch car insurance providers before policy expiry?
Ans. Yes, if required, a policyholder can switch providers mid-term; however, it’s better to wait until the current policy ends to avoid paying for overlapping coverage.

Q3. Will I transfer the No Claim Bonus benefit to the new provider?
Ans. While many insurance providers honour past No Claim Bonus, it is suggested to confirm the same before making a switch.

Q4. What will happen if my car insurance policy expires and I am not able to switch?
Ans. In such a case, you’ll be left uninsured, which is both illegal and financially troublesome.

Q5. What is cheaper: policy renewal or switching providers?
Ans. In most cases, it is cheaper to switch providers than to renew the same policy; that’s because new providers often offer competitive rates to attract applicants.

Q6. How soon should a policyholder start looking for a new insurance provider?
Ans. If you have plans to make a switch, it is recommended to start looking for options a month in advance.

Q7. Do I need to surrender my old policy while making a switch?
Ans. There is no need to surrender the policy; it is essential to keep the documents with you for record-keeping.

Q8. Can I apply for car insurance online?
Ans. Yes, many providers in the Philippines offer facilities like online application and digital payment & processing.

Q9. Can I switch providers if I have recently filed a claim?
Ans. Yes, you can; however, it may lead to a higher premium due to your claim history.

Q10. Is a comprehensive insurance policy required for Filipino motor vehicle owners?
Ans. A comprehensive insurance policy is not mandatory but highly recommended for Filipino motor vehicle owners for its border protection.

Q11. Can I pay a premium in instalments?
Ans. Yes, many providers offer monthly or quarterly premium payments.

Q12. What is the difference between CTPL and comprehensive insurance renewal?
Ans. While you don’t have to give much thought to CTPL insurance, the coverage remains the same. As for comprehensive insurance, you can analyse whether it’s required, whether it's sufficient, and if you need add-ons this time around.

Q13. What documents are required to switch car insurance providers?
Ans. To make a switch, you will need the following documents: OR/CR, driver’s license, previous insurance policy, and claim history.

Q14. Will the new insurance provider cover existing car damage?
Ans. No, your new insurance provider will only offer coverage against damages incurred after the activation of the new policy.

Q15. Can I include add-ons at the time of policy renewal?
Ans. Yes, you are free to alter or enhance your coverage at the time of policy renewal.

Q16. When should I consider switching car insurance providers?
Ans. Consider switching if you encounter any of the following situations: limited coverage, poor customer service, high premiums, or better deals.

Also Read: From confused to confident: Car insurance tips for first-time Filipino drivers