Dave Ramsey's 3 tips to make switching auto insurance easy

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Changing car insurance can be a hassle, but it doesn't have to be. Dave Ramsey has some tips on how to easily switch policies, which could lead to significant financial savings if a different insurer offers lower premiums for the same or better coverage.

Drivers thinking of making a switch should check out these tips from Ramsey, which he says can make getting a new policy "as easy as waving a magic wand."

1. Find out what types of coverage are necessary

There's a simple reason Ramsey explains that exploring the types of coverage needed should be the first step drivers take if they want to make the process of switching insurers easier.

"A lot of people don't know how to switch car insurance because they don't really know what they need to buy," he explained. To figure this out, he suggested that drivers first look at the current coverage they have and then research what kind of protection it is so they can decide if it's necessary.

For most people, Ramsey believes it's important to have $500,000 in liability coverage to pay for damages caused to others. He also recommends collision insurance to pay for the repair or replacement of the driver's own vehicle, as well as comprehensive coverage to pay for any non-crash-related issues affecting the policyholder's car.

Ramsey also suggests considering the size of the insurance deductible, which is what the policyholder must pay out of pocket when a covered loss occurs before the insurer starts paying the bill.

"A high deductible means you pay more upfront for repairs if something happens to your car, but you'll pay lower monthly premiums. Unless you're very accident-prone, it pays to have a high deductible to save a little money." money every month," Ramsey said.

2. Consider working with an independent insurance agent

After deciding how much coverage to buy, the next step in switching insurance is comparing policy offerings from many providers. Ramsey recommends looking at six or even 10 different insurers to determine which offers the best price.

While this can be done online, Ramsey believes it's best to work with an independent insurance agent. He says they are "experts on how to switch auto insurance" and can do the process of comparing quotes for consumers.

Finding an independent agent who can get quotes from many insurers isn't a bad idea, especially for people who are busy or just don't enjoy shopping around. Of course, it is not strictly necessary, as it is also quite simple to get insurance quotes online.

3. Implement the new policy before canceling the old one

Finally, Ramsey has some other top tips to simplify the auto insurance switching process. "Before you run out and cancel your old insurance policy, make sure your new policy is in effect," says Ramsey. And he also urges drivers to make sure they've "printed out their new vehicle identification cards and put them in the glove box in case you need them."

This can help motorists avoid legal problems that could arise if there was a gap in coverage between the cancellation of the old policy and the purchase of a new one.

By following this advice, it's easy to switch insurers, opening the door to savings on coverage when a new company offers a cheaper policy than your current insurer offers.

We firmly believe in the Golden Rule, so editorial opinions are ours and have not been previously reviewed, approved, or endorsed by the listed advertisers. Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a separate team of analysts. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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