How to Switch Car Insurance Any Time

How to change car insurance companies

If you’re interested in switching car insurance companies, you won’t have to wait for your current policy to expire. You can change car insurance plans anytime, whether you purchased your policy two days or two months ago. Here are some key tips for switching insurers:

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Should you switch auto insurance after an accident?

Changing your auto insurance policy after an accident is fine. You can switch companies at any time, but if you are still dealing with an accident claim, it can become more complicated.

You will have to deal with multiple insurance companies and will need to disclose the accident to your new company.

What are the hazards of canceling your auto insurance policy incorrectly?

Whatever you do, do not stop paying your old bill until your new policy is active and you’ve officially told your old company that you have a new policy and wish to cancel. This is an important step in how to change your auto provider.

If you stop paying your bill without informing your old company, they could report you to the credit bureaus for nonpayment, which could negatively affect your credit score.

If you cancel your old policy before your new policy is active, you could create a lapse in your coverage.

During a lapse, you are not covered by any policy, and if you get into a car accident during that time, you could face dire consequences, including having to pay for all of the accident-related damages and being sued by the other driver.

You could also have your license revoked, have to pay high court costs, and face higher auto rates in the future.

Switching auto companies frequently will not harm you if you follow the appropriate steps.

To get started, you can use our comparison tool to help you find a more affordable policy with a company that you trust to provide you with the coverage you need.

Switching Auto Insurance Carriers When It’s Right for You

You’ve reviewed your policy, gotten quotes and narrowed your options down to a few potential alternative insurers. It’s time to plan your next move. Should you choose a new insurance carrier or stick with your current one? Answers to the following questions may help you decide.

  • What do you give up if you leave your current insurer? Are there any penalties for switching? Will you lose accident forgiveness, which often kicks in after a few years with the same provider? Is there a recent accident or moving violation that might cause your rates to go up at renewal time, but renewal is still several months away? If so, you may want to wait until it’s time to renew, since any new policy you shop for now will take your accident or ticket into account when pricing is set.
  • Do you like doing business with them? If you’ve had a great experience with your insurance company, that might be worth a few extra dollars. If you’ve had a negative experience, there’s no reason not to switch if you find a better deal elsewhere.
  • Do you need something your insurer can’t offer? Whether it’s vintage car insurance, an insanely low price or an easy-to-use app, your needs simply may not intersect with what your insurance carrier has to offer. If that’s the case, it’s time to move on.

If you make a change, be sure to avoid any gap in coverage. It’s better to overlap policies by a few days than to risk going without insurance, even for a short time. Operating a car without insurance is illegal in most states. It’s also tempting fate.

Our recommendations for car insurance

While it takes time to find the best rate and switch your car insurance company, it can be worth it in the long run. Enter your ZIP code below to quickly compare rates from multiple providers in your area.

When to switch auto insurance companies

You can switch car insurance companies at any time. This includes the day you start coverage and even when you have certain open claims. You also won’t be penalized for switching multiple times in one year.

We recommend shopping around for coverage at least once per policy term to make sure you have the best price. Beyond that, it’s a good idea to consider a switch if your life situation changes in one of the ways described above.

Shop for rates if you are thinking of changing your coverage amounts, as well. Some providers are cheaper for minimum liability car insurance, while others offer cheaper full coverage rates.

When not to switch car insurance providers

While you can switch car insurance at any time, that doesn’t mean every time is the best time. Be aware that some car insurance companies give discounts based on how long you’ve had a policy with your provider. So, if you switch companies after a month, you won’t be eligible for a loyalty discount.

Check with your car insurance company to see if it charges a cancellation fee within a certain timeframe. Most companies let you cancel without any fees, but this isn’t always the case. You might want to wait until your policy expires to avoid any fees.

Also, it’s best not to switch your car insurance company while you have an open at-fault claim. While you’re allowed to do this, your rates can increase to account for the cost of the claim once it’s settled or at your next policy term. If you have to switch during a claim, make sure you are completely honest about it with your new provider, as leaving anything out could result in even higher rates.

7. Make sure your old policy is canceled

If you are switching car insurance to a new insurer, do not assume that your existing policy is automatically canceled if you stop paying premiums. If you signed up for auto-renewal, your current auto insurer could report you to credit bureaus for non-payment. Most insurance experts recommend that you contact your current carrier to cancel your policy when you are switching to a new car insurance company.

Follow these few steps to terminate your prior policy:

  • Contact your current insurance company and notify them that you are terminating your policy. This will prevent them from billing you for future coverage.
  • If you signed up for auto-payment, you may need to log into an online account and cancel the auto-withdrawals. If you use your bank’s bill pay service to pay your premiums, be sure to stop the payments with your bank.
  • Ask your carrier to confirm the termination in writing.

Each insurance company has its own process for canceling policies. You may need to sign a form authorizing a cancellation, or you may need to call and speak directly with a company customer service representative. Some companies might let you do it online, but you may feel more comfortable putting it in writing or speaking with someone to confirm that cancellation. Your insurance agent can help you through the process.

Learn more: When and how to cancel your auto insurance policy

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4. Contact your current carrier

As you are getting quotes from other carriers, contacting your current provider could be beneficial. Although it is a car insurance myth that insurance rates are negotiable (meaning that your company won’t be able to lower your bill just to keep your business), you may be able to identify discounts and other savings opportunities that you are currently missing. Your agent may have suggestions about how to lower your costs, like maintaining a clean driving record or even buying a less expensive vehicle.

This step is particularly important if your insurance is written through an independent agency. Independent agents are able to represent numerous insurance providers, unlike captive agents who only sell insurance products from a single company. An independent agent may be able to shop your policy with multiple carriers to find you a lower rate while still keeping your policy in the same agency.

Learn more: Best car insurance discounts

Tailoring Your Coverage to Save Money

The first thing to do when you’re comparing auto insurance alternatives is to look at your current policy. If you’re in the market to save money, reviewing your coverages for savings opportunities is a good place to start. You might even kick things off by contacting your current insurance company to ask about modifying your coverage or applying discounts to bring your premium down.

Additionally, consider these three ideas for fine-tuning your policy to reduce your auto insurance costs:

Downgrade your coverage. If you own your car outright, nixing comprehensive and collision coverage can bring down your premium drastically. This coverage kicks in to help you pay for repairs or replace your vehicle if you’re in an accident or another covered event (vandalism, for instance). Review your policy for “extras” like roadside assistance or car rental coverage. Proceed with caution, though: Downgrading your coverage is only a good idea if your remaining coverage and savings are such that you won’t be left high and dry if something happens to your vehicle.

Check your credit. In most states, insurance companies use what’s called a credit-based insurance score to help determine premiums. Check your credit report and score to see where you stand. If your credit is good, it may be a bargaining chip when you talk to prospective insurance companies. If not, taking steps to improve it can help bring down your premiums.

Look for discounts.. Auto insurance companies offer discounts for a variety of things: being a good driver, having multiple policies (such as auto, home and life), belonging to affiliate groups, having good grades—the list is usually long. Take a close look at each company’s list of available discounts, note the ones that apply to you and make sure your insurance provider is including them in your premium calculation.

When to Switch Car Insurance

Consider switching car insurance if you:

Move to a new zip code, city or state

Car insurance is regulated differently in each state, which means you’ll have to get a new policy once you arrive. Keep your old policy active until you arrive at the new location, as it’s illegal to drive across state lines uninsured.

Get married

As a married couple, a new car insurance policy translates to lower rates. Couples can capitalize on these savings even more through loyalty discounts, multi-car discounts and bundles for renters and homeowners insurance.

Purchase a new vehicle or add an additional car to the policy

An additional car on your policy will most likely increase the insurance rates. New vehicles, in particular, will raise premiums, as their value will be higher than your previous car.

See a significant change in your credit score

Your credit score can have a direct impact on your car insurance rates. If your credit score has significantly increased since you first took out the policy, you could see a reduction in your premium with a new insurer.

See an increase in your car insurance premium

Your current insurer won’t increase rates during the policy term, but it might happen at renewal. Although the typical culprits are major life changes, sometimes car insurance rates increase due to factors out of your control, such as a surge in reckless driving.

Add a teenage driver to your policy

Insuring teenage drivers is expensive because they’re considered high-risk by auto insurance companies. Deals like “good student discounts” along with multi-vehicle, mileage and bundling discounts can help offset the cost.

Want to increase or decrease coverage

There are situations where the current policy’s coverage doesn’t fit your insurance needs anymore. For example, a lease buyout – dealerships generally require higher coverage when leasing a car, but the same policy may be too much for an auto loan.

Are near policy renewal

Auto insurance policy terms expire either every six months or once a year. To ensure it’s still adequate for your lifestyle and budget, it’s a good idea to go over the policy before you renew. Cancelling near renewal means you don’t have to deal with any penalties.

Frequently Asked Questions

How to switch car insurance to a new car?Insurance companies offer a grace period anywhere between 7 to 30 days, during which they’d cover your new vehicle while you make arrangements to update the current policy or purchase a new one entirely. You can transfer your current coverage to the new vehicle or purchase a new policy entirely. Regardless of what you choose to do, the car dealership will let you drive the vehicle off the lot as long as you provide proof of insurance. Can I switch car insurance anytime?Yes, you can switch car insurance anytime, near policy renewal or even mid-policy, and qualify for a refund on any premium payments made in advance. However, if you have an open claim, it might be better to wait until it’s settled since the previous provider will still manage the claim. If your current provider charges cancellation fees or refuses to refund unused premiums, we recommend that you calculate whether the savings of a new policy offset the cost of canceling prematurely. How do I cancel my car insurance? To cancel your car insurance coverage, get in touch with your insurance agent. You may be able to do it over the phone, but some providers require a mail-in or faxed cancellation document with your signature. We recommend you get the cancellation confirmed in writing and double-check that automatic payments are deactivated. How to switch car insurance to another stateSwitch to a new provider once you’re settled in your new state, as costs depend on the state, location and commuting distance. On the other hand, if you’re happy with your current provider, call your agent to learn how to transfer the policy. Remember to keep the current policy active until you reach your new home, as it’s illegal to drive across state lines without insurance.

Are there hidden fees/less coverage?

There are plenty of commercials promising you the lowest rates that try to entice you into switching policies. The cheapest option is always enticing, right? While this may be true that some auto insurance companies may offer significantly lower prices for the same coverage, but some insurers will offer you a cheaper rate, only to drastically reduce your coverage.

For example, if you currently have collision and comprehensive coverage in addition to liability, you’d only want to compare rates with a company offering the same full coverage with the same policy limits and deductibles. Rather than reduce the type of coverage you have, inquire about any discounts that may apply with the new insurer. Giving up valuable coverage to save money may not end well for you, especially if you give up the coverage types that would help the most, such as the above mentioned collision or comprehensive.

Additionally, sometimes an insurance company may avoid mentioning hidden fees and other charges to make their insurance rate seem much lower than what you are currently paying. While this can make the new policy appear cheaper than the policy with your current insurer, when it is all taken into account, the reality is that the prices from both auto insurers can be closer than they first seemed. If you have an insurance agent, it may be helpful to talk with them about your coverage options and needs to find out if you can modify your current policies to avoid changing auto insurance providers before your policies expire.

Best (and worst) times to switch car insurance companies

It’s a good time to shop around when…

  • You’ve had a major life change. Your insurance rate is unlikely to change much unless you change—in other words, if you change zip codes, change jobs, change cars, grow your family, or improve your credit. 

  • You’re no longer a young driver. Young drivers have some of the highest rates of all. If you’re over the age of 25 now, it may be worth checking around to look for a better rate.

  • You were charged with a traffic violation. If you received a speeding ticket or DUI charge, it could be a good time to shop around. You can switch providers even if you currently have an open claim, though it’s not recommended.

Each state has its own guidelines about getting back on the road after a serious conviction. Plus, every company has its own formula for assessing risk and calculating premiums. If your provider is set to increase your rates due to an accident, for example, you may be able to find a lower rate somewhere else.

It may not be the best time to shop around if

  • You were recently in an accident. A recent accident means your rates probably won’t go up until your policy renewal time comes. If you switch immediately, your new company’s rates will immediately take into account your accident. If you wait until renewal time to switch, you can enjoy lower rates for at least a little longer.

  • You qualify for accident forgiveness. This is a coveted benefit that can save you thousands if you get into an accident. Top companies require drivers to have about five years of claim-free coverage before they receive this perk, but it’s a good reason to stay with your current provider.

  • You’ll lose a good discount. Two of the best discounts in car insurance are loyalty and bundling. If you switch providers, you will lose these discounts. Is it worth it?

No matter your circustances, though, it never hurts to check rates with other companies. Even if you don't find a better deal, at least you'll know that you already have the best rate you can get!MORE: 9 questions to ask when comparing car insurance quotes

How to Switch Car Insurance FAQ

You won’t be penalized for switching car insurance companies, but you could be subject to cancellation fees, depending on your insurance company. Also, you could miss out on certain car insurance discounts if you switch to a new insurer. For example, you could lose a loyalty discount. If you move policy to a new company and keep a policy with a previous insurer, you could lose a multi-policy discount. One of the best discounts you can snag is when you bundle your auto and home insurance with the same insurer.

Yes, you can switch car insurance companies while you have an open insurance claim with your current insurer. If the accident occurred while you were covered under your previous insurance policy, that insurer needs to handle your claim. You will have to stay in touch with your previous insurer to resolve any open claims.

When you cancel a policy mid-term, you should get a prorated refund for the remainder of your policy term. For example, if you paid your annual premium in full and canceled your policy after six months, you should get a refund for the remaining six months (minus any applicable cancellation fees, depending on the company). You will likely be refunded in the same manner as your payments. So if you pay by credit card, you’ll see the refund as a credit on your card balance.

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