How To Switch Auto Insurance (2023)
It is important to do your research and know how to properly switch car insurance companies to avoid illegal coverage lapses or expensive cancellation fees.
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UPDATED: Dec 16, 2022
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Dec 16, 2022
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Your new auto insurance policy should start before your old policy ends
- Compare quotes from multiple companies before committing to an insurance company
- It is best to avoid switching car insurance companies when you have an open claim
If you are dissatisfied with your rates or are moving and need a different insurance company that sells in your area, then you’ll have to switch car insurance companies. Learning how to change car insurance companies to one of the best auto insurance companies for your needs will help you avoid lapses in coverage, signing up with a subpar company, and other mishaps.
To ensure you know how to switch car insurance properly, we will go over all the steps involved and answer common questions like, “Can you switch car insurance at any time?” Keep reading to learn everything you need to know.
Table of Contents
How to Switch Your Car Insurance Company
There are several steps that you should take when switching to a new car insurance company. Signing up with the first company that catches your eye can result in high rates, poor coverage options, and other issues. It is important to properly follow the steps outlined below to ensure the switching process goes smoothly.
Determine the Amount of Coverage Needed
The first step to narrowing down company options is to consider how much car insurance you need. When you switch companies, you will need to know what types of coverage you want beforehand, so you don’t accidentally purchase something you don’t need.
For example, while you are required by your state to carry the bare minimum liability insurance, you may wish to purchase more than what your state requires in order to be better protected. You should look at your state’s minimum auto insurance requirements and see if you want more coverage.
For instance, with liability insurance, you will often see policies listed in the format 25/100/100. This means the state requires you to carry a policy with $25,000 for bodily injury damages per person, $100,000 for bodily injury damages per accident, and $100,000 for property damages per accident.
If you want insurance to pay more than these listed amounts after an accident you cause, you will need to increase your liability limits.
You also should consider whether you want to carry important coverages like collision insurance or comprehensive insurance to have a full coverage policy. Most insurance companies also offer add-on coverages like roadside assistance or GAP insurance.
Consider buying more coverage than the minimum required and determine how much coverage you want before applying for auto insurance quotes.
Check Cancellation Fees and Refunds
The last thing you want when canceling insurance is to lose large amounts of money due to cancellation fees. Before canceling your current policy, make sure to check the cancellation fees and refunds. Can you switch car insurance companies mid-policy? Yes, but there may be a penalty involved.
If your insurance company charges a hefty fee if you cancel before your policy ends, you may wish to wait out the remainder of the policy before switching unless the money you save by switching will be more than the fee.
However, if your insurance company doesn’t charge a cancellation fee and will refund you the unused premiums, you can cancel anytime without fear of losing money. Most insurance companies aren’t clear about their cancellation fees and refunds upfront, so make sure to check the fine print on your policy to find out the details. Find out how to cancel your car insurance.
Compare Car Insurance Quotes
When picking a new insurance company, it is important to compare multiple quotes to find the best deal. One of the most common reasons drivers may choose to start shopping around and comparing quotes is because they have a new traffic ticket or accident on their record. Find out how to compare auto insurance here.
Comparing quotes will help drivers see if a different company offers cheaper rates based on their driving record. If drivers can find companies that can save them money, especially with a ticket or accident on their record, it is often worthwhile to make the switch to get cheap auto insurance after an accident or similar mishap.
Comparing quotes will also help you see which companies offer the coverages you want at an affordable price, especially if you are looking for add-ons like roadside assistance or accident forgiveness. Find out where to compare auto insurance rates.
Buy New Policy and Cancel Old Policy
Once you have picked a new insurance company, the next step is to buy your new insurance policy and set a date for it to be activated. The activation date may be the day you purchase the policy or a week later.
You want to buy your new insurance policy and ensure it’s active before canceling your old policy to avoid an illegal lapse in coverage where you are left unprotected on the road.
Even one day without insurance may result in higher insurance rates, so it’s vital to make sure you have coverage before canceling. Make sure you also receive your new digital ID cards and confirmation of insurance coverage.
Once you know what day your new insurance policy starts, you can cancel your old insurance policy. Make sure you set the cancellation date for the same day your new insurance policy starts, not before.
Change ID Cards
Once you’ve successfully signed up with your new insurance company and canceled your old policy, you need to carry your new insurance ID. Download the digital copy if applicable and carry a paper copy in your car. You can discard your old ID cards.
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Why Drivers Consider Switching Car Insurance Companies
Because switching car insurance companies can be time-consuming and a hassle for some drivers, you may be wondering if you should go to the effort of switching your car insurance. Generally, drivers should consider looking into different companies and possibly switching under circumstances like the following:
- Credit score changes. If your credit score has drastically changed, switching to a different company may help you find a better rate.
- Driver history changes. Any accidents or traffic tickets increase rates and make looking into other companies for cheaper rates worthwhile.
- Home purchase. Other insurance companies may offer better discounts for drivers who are also homeowners.
- Lifestyle changes. If you are working from home or retired and therefore driving less, another company may be cheaper.
- Marriage. Married couples often receive cheaper rates than single drivers, so it is worth seeing if another company offers a better rate.
- New drivers or leaving drivers. Parents should get new quotes if they have a new teenage driver joining their policy or a current policy driver is moving away.
- New vehicle. If you purchased a new car, you should shop around and ensure your insurance company still offers the cheapest rate.
- Rate changes. Any significant change in rates, whether you moved or were in an accident, warrants comparing companies and considering a switch.
Basically, any changes to your driver profile or history can result in rate increases, which makes switching car insurance after an accident or lifestyle change usually worthwhile. Your car insurance company may be the cheapest for you currently, but that doesn’t mean it will always be the best company for your needs.
When should I not switch car insurance?
While switching companies can result in cheaper rates, this doesn’t mean you should always look into switching. Some of the reasons not to switch include:
- You won’t qualify for some discounts. If you don’t stay with a company long, you won’t qualify for certain auto insurance discounts like loyalty program discounts that can save you money down the road.
- You may be charged cancellation fees. If your insurance company charges high fees for cancellation, you may want to hold off on switching.
- You may not be able to get the same full range of coverage. If another company is cheaper but doesn’t have the coverage you want, it is probably worth staying with your current provider to be fully covered.
- You have an open claim. If you have an open claim, you should hold off on switching until your claim is settled. This will help you avoid the headache of handling a claim at your old company while switching to a new one.
Just because a company is cheaper doesn’t always mean that you should switch car insurance. Sometimes it is worth staying with your current provider.
When is the best time to switch car insurance?
Can I change my coverage at any time? You can switch to a new car insurance company at any time, but if you are charged cancellation fees for early cancellation, it may be best to wait until the end of your policy term.
Typically, we recommend looking at insurance company quotes once a year to ensure you are still getting the best deal on car insurance. Your driving profile and record are always changing, and sometimes that warrants a switch in car insurance to continue getting the best coverages and prices.
The Final Word on Switching Car Insurance
When switching car insurance companies, making sure your new policy starts before your old insurance policy ends is essential to avoid a lapse in coverage. Because your driver profile and record constantly change, shopping for quotes every year is a good idea.
Getting quotes from multiple companies when switching is the best way to ensure you get a good deal. Use our free quote comparison tool to find the best rates from car insurance companies in your area.
Frequently Asked Questions
Can I switch car insurance at any time?
Yes, you can switch car insurance companies at any time you wish. However, keep in mind that you may be charged cancellation fees if you cancel before the end of your policy term.
Is switching car insurance companies bad?
No, it is not bad. We recommend continuously getting quotes and switching companies as needed to get the best rates and coverages.
Will I be refunded my car insurance premium if I switch car insurance companies?
Most auto insurance companies will refund unused premiums if you cancel before the end of your term. For example, if you paid for a whole year of coverage but canceled in the sixth month, you should be refunded for the six months of unused premiums.
Can I switch companies even if I have an open claim?
Yes, you can legally switch car insurance companies while you still have an open claim. Keep in mind, though, that not every auto insurance company will accept drivers with open claims, as the company will have to reevaluate your profile once the claim is closed.
You may also face higher premiums at your new insurance company once your claim is closed. In most cases, it is best to wait until the claim has been fully processed, so you know exactly how much you will be paying at your new insurance company.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.