Making Changes to Your Auto Insurance Policy: What to Know

Auto insurance policy

Whether you're going on a long trip and you need to upgrade your roadside coverage or you've been laid off and need to find a way to cut costs, changes to your auto insurance policy can have a big impact on your financial future. With the help of Insurance Information Network of California's Tully Lehman, Online Auto Insurance has put together this primer to help with your decisions about your car insurance policy. The following are Lehman's answers to our questions.

I need to change my auto insurance coverage. How long will it take for it to go into effect?

In most cases, immediately.

In almost all cases, most companies will let you change your coverage and even delay your payments until the next premium is due. In only a few instances will a underwriter delay expanding the coverage.

What are some of those instances when an underwriter will delay coverage?

If there's a big storm coming, like a hurricane or massive weather system, and a couple days before it is expected to hit you try to upgrade from basic liability to comprehensive coverage.

You don't want to be caught in that situation. The big question to ask is "If I think I'd add it later, what's the risk today?" And what is your risk going forward? If you live in an area with frequent hurricanes or hailstorms, you don't want to add coverage just because you think something bad is going to happen.

I've been laid off or seen my hours cut at work and need to save some cash. Should I opt for less auto coverage?

No, unless it's absolutely necessary, which often it isn't.

Just like your job situation changes, so do discounts and other cost savers. Before you downsize your insurance, ask your agent or insurance company if you qualify for good driver or loyalty discounts.

Maybe you can combine policy companies, like you have one company that insurers your home and one that insurers your auto. By combining the policies, you can often save money with the company. Also check for longevity discounts. Many insurers offer discounts based on how long you've been paying premiums on time.

And make sure you're not paying extra for something you don't need. Maybe someone in your house is on your auto policy, but they never drive your car anymore. Get them off the policy. But the last thing you want to do if you're downsized or laid off is reduce coverage. Because if something does happen where you have to file a claim, you'll have less money to deal with the problem.

I'm going on a road trip and want to make sure I'm covered if I break down. Should I opt for roadside assistance through my auto insurer, or go through a third party service like AAA?

You need to know what kind of coverage you need.

Sometimes insurance companies don't cover roadside hazard in certain areas, or if you break down over a certain distance from your home. But, often that's not the case, and you can get a discount for adding on roadside hazard. You just got to know what your insurer offers, and what alternatives there are.