How To Switch Auto Insurance (2023)

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.

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.

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