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Top 7 signs it’s time for your business to switch insurance companies

Top 7 signs it’s time for your business to switch insurance companies

By Kim Mercado
Apr 18, 2022
10 min read

Whether you’ve had your current business insurance coverage for a few weeks or a few years — you can switch insurance companies at any time.

There are many reasons to explore other options. Maybe when you first started your business, you were in a hurry and picked something fast. Or maybe you’ve been with your business insurance broker for years but have heard there could be better options.

Thanks to the digital revolution, getting insurance for your business has never been easier. Many insurance companies offer automated online business insurance services, and signing up is as easy as a few clicks of the mouse. The average cost of small business insurance has dropped, and insurers can offer better and faster support than before. 

If you want to explore your coverage options or are thinking of switching insurance companies, we’ll share why others make the leap and some tips for how to switch carriers.

7 signs you may need to switch insurance companies

There are no laws that say interacting with insurance has to suck. (We checked.) If you find yourself nodding in agreement with these scenarios, you may want to start looking into a new provider.

1. You’ve had bad claim experiences

Maybe it’s the ultra-long wait times when you call your agent, or they just don’t respond to your emails. Maybe you had to wait months before an insurance claim was resolved, with no information on why it took so long.

There's no reason to stay with a company that hasn't treated you well in the past. Today, consumers have more choices than ever at their fingertips. They can research information about companies well before they ever interact with them.

If you make a claim, you should receive your approval and payout within a reasonable time frame. And if your carrier has been consistently unhelpful and unresponsive, or if they have refused you coverage for things you think they should have covered, it might be time to consider taking your business elsewhere.

2. The insurance provider is difficult to work with

Similarly, if your insurance company is difficult to deal with, from getting certificates of insurance to explaining your coverage in plain terms, don't assume that that's just how it is. 

Anyone you speak to at the company should be responsive, supportive and helpful. You should have someone to turn to with any question or concern, and that someone should answer you promptly and clearly. 

The provider should also dream up ways to make your life easier and your insurance more accessible. It could be a self-service portal where you can update additional insureds yourself without getting an agent on the phone. Or a mobile app that allows you to file a claim from anywhere, anytime.

If these criteria haven't been met with your current insurance company, it may be time to move on.

3. Your previous agent leaves or retires

We get it; relationships matter. Some of us have been loyal to our hairdressers for years and couldn’t imagine anyone else touching our hair.

It’s the same with insurance agents. Maybe the agent you bought your business insurance from leaves or retires, and someone else takes over. You’re left wondering if this new person will have your back like the old one did, or will they try to get you to buy things you don’t need?

This could be an opportunity to explore what else is out there. Are you getting the best rates? Is your coverage at the right level? Are you happy with the coverage and service, or do you think it could be better? Now might be the right time to shop around.

4. The insurance costs too much/not enough value

Maybe you’re required to have insurance for your job. Or you want to have insurance as protection for your business. Either way, insurance shouldn't cost an arm and a leg. But how do you know if you’re overpaying?

Start by asking other professionals in your field how much they are paying for insurance premiums. If it looks like others in your industry are paying significantly less, it's time to renegotiate your terms or switch providers. 

What if you're paying a decent rate for your insurance, but you still find that insurance has swallowed up more than its share of your budget. How is that happening?

It might be because your company is nickeling and diming you. Some insurance companies try to squeeze every last drop out of their clients by charging for every little thing. 

For instance, do they charge for a certificate of insurance to show clients and prove that you're insured? Do they exclude essential coverage from your basic general liability insurance policy and charge you for additional insurance? 

If you find yourself forking out more than you planned on insurance costs, don't assume it'll be like that with every company. Shop around, get detailed quotes and consider moving to a carrier with better rates and value.

Even if you don’t end up changing providers, knowledge is power. With more information from your peers and quoted rates, you’re better positioned to negotiate with your provider.

5. Your business has changed, but your insurance has not

Even if you're happy with the service you've received from your insurance company, things are always changing. You may have added a new product or service, such as launching a food truck or offering mobile services.

If your insurance company doesn’t cover this new aspect of your business, or it’s far more expensive than you want to pay, it’s time to go shopping. Especially with the first scenario, you’ll want to ensure your business’s growth is covered.

Similarly, suppose your insurance coverage has stayed the same for many years. There are likely better options available now. A good, up-to-date insurance company should be able to offer you updated terms that reflect changes in the industry and your long-standing relationship with them. If they can't, you may want to think about switching. 

6. The insurance company changes their terms

Maybe it’s not you who changed, but your insurance carrier. It happens occasionally. 

Your insurer may decide to change their policies, coverage geographies, and coverage offerings. You'll get the notification from your company and suddenly find yourself having to find another provider.

Carriers don't want to leave you high and dry, so they might provide alternatives or recommendations for coverage. (Whether they’re the best fit for your business or have comparable pricing is a different story.)

Instead of feeling like you got booted, you can take proactive steps to find your next carrier by doing your own research. You may find better deals or customizable insurance tailored to your business.

7. You get a recommendation from someone you trust 

Maybe someone you know had a good experience with their insurer. Their claim went through quickly, or they had an issue, and it got resolved smoothly. (We like these kinds of stories.)

It’s the classic FOMO (Fear Of Missing Out) effect, and you’re wondering if you should get in on what that other person has discovered. Should you take it as a sign to switch carriers?

Probably! You’re getting valuable information from a first-hand experience. The person who recommended the insurer may be able to give you insights from a customer perspective that you don’t get from browsing a website. 

For instance, they can tell you about their costs or if the company charges for certain products or services. They can explain processes, response and turnaround times and more.

If a company or brand has earned the respect of someone you trust, it’s probably worth looking into. Their recommendation and good intent might help you save money and time.

How to switch business insurance companies

Before you jump ship, find out from your agent or check your policy for cancellation fees, which may affect when you switch business insurance providers.

If you’re thinking about switching companies, here’s what to do.

1. Research new providers

The first step is to do your homework. Research small business insurance carriers that cover your job and/or industry. Many carriers will let you get a quote for free, so get quotes from at least three different carriers for comparison.

2. Make a decision and purchase new insurance

You’ll want to avoid a lapse in your coverage, so buy your new insurance before ending your current coverage.

Do a little planning ahead, so your new policy begins a day or two before the current policy ends. Depending on your industry and your state’s laws, a coverage gap — even as little as a day — can result in fines.

3. Notify your current provider

Once you have new coverage, you need to cancel your old insurance. Contact your soon-to-be previous insurance provider and formally start the cancellation process. Your agent can give you information about open claims, fees, or questions about refunds for unused policy periods.

You can also schedule when you want your coverage to end, so you have continuous coverage.

4. Get your proof of insurance and notify third-parties

Once you have your new insurance, figure out how to access it when you need it. You can download and print a certificate of insurance, access it on a mobile app, or have it mailed to you. (NEXT also provides a handy onboarding checklist for new customers.)

You know how doctor’s offices always ask if you have the same insurance when you visit? It’s the same for some third parties — you should notify them of the insurance change. These could include clients or your landlord if you rent commercial property.

Looking to make a switch? Consider NEXT

We know we're biased, but we hope you'll consider NEXT if you're thinking about switching.

You can trust NEXT to protect your small business. More than 300,000 small businesses trust us to protect theirs. We’re accredited by the Better Business Bureau and have an A+ rating.

Whether you are looking for general liability coverage, commercial auto, workers’ compensation, professional liability or commercial property, we can help you find insurance that fits your needs and budget. 

NEXT is 100% online. You can get a quote, review options, buy coverage and get instant access to your certificate of insurance in less than 10 minutes.

If you have questions, our licensed, U.S.-based insurance professionals are standing by to help.

Get an instant quote today.

Top 7 signs it’s time for your business to switch insurance companies

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About the author
Kim Mercado is a content editor at NEXT's blog, where she writes and edits posts for small business owners. She is an experienced marketing professional and loves helping entrepreneurs solve their business challenges. You can find Kim trying new recipes and cheering the 49ers.
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