Auto insurance needs often change over time. For example, younger adults are primarily interested in finding cheap insurance, while older drivers may be more interested in finding the best insurance company to protect their financial assets. If your living environment changes after you enroll in the insurance, you need to consider switching car insurance.
Insurance experts generally recommend not changing companies too often. However, finding a new company can help you find the policy that best suits your needs. You may discover features such as lower premiums, more coverage options, additional discounts to qualify for, or previously inaccessible mobile apps. Learning how to switch your car insurance to a new company will benefit you in many ways.
When changing insurance companies
You can switch insurance companies at any time, but there are often situations that help you find new business. These situations may include:
- Moving to a new zip code, city or state: Your city, state, and even your zip code can affect auto insurance premiums. If you’re moving, it might be a good time to consider a new insurance company, at least to see if premiums in your area are more competitive.
- Add driver or car: If your teen is getting a license or adding a new car to your home, consider getting a quote from another insurance company. You can find companies that offer lower premiums for new drivers or vehicles.
- Life event experience: Life events such as getting married, buying a home, and having a child can affect your insurance needs and premiums. In these situations, we recommend updating your current policy or looking for a new one.
- Upcoming update date: You can switch car insurance at any time, but your renewal date is a particularly good time to switch. If you cancel your old policy on your renewal date and start your new policy on the same day, you are less likely to face small charges or refunds for your old policy.
While there are benefits to switching insurance companies, there are times when switching insurance companies is not a good idea. For example, if you just made a claim, you probably can’t switch carriers. If the claim is not resolved and paid, the new auto insurance company has no way of properly evaluating your policy. This could result in a significant increase in new policies at renewal, chargebacks that account for increased risk that the new company was unaware of, or erroneous claims if the new company was not notified of the claim. There is a possibility that a cancellation notice will be sent.
1. Consider compensation options
Too little coverage can leave you financially vulnerable, while too much coverage can overpay. If you feel like you’re paying too much, consider switching to auto insurance.
“Ask yourself: Am I driving an older car? Doing this might eliminate the need for comprehensive collision damage waiver insurance or increase the deductible to save money. Yes,” says insurance expert Michelle Demora.
The more coverage you add to your auto insurance policy, the higher your premium will ultimately be. If you want to know how to switch car insurance, understanding what the different types of car insurance cover and which one you need is an important first step.
2. Check possible penalties
If you decide that switching car insurance is the right choice, find out if there are penalties for switching before your policy expires. Fortunately, auto insurance companies usually give you the right to cancel your policy at any time, as long as you give them proper notice.
Most insurers may refund unused premiums, but some may charge a fee if you decide to cancel your policy prematurely. Before canceling the policy, you can consult with the company’s customer service department or ask an agent if the company has a special cancellation policy.
If you find that you have been charged a cancellation fee in the middle of the term, we encourage you to change your policy. Even if you find a new policy with a premium that covers your old provider’s cancellation fees, it makes sense to switch providers.
3. Compare car insurance quotes from multiple companies
If you decide it’s a good time to switch companies, you need to know how to switch auto insurance companies. We recommend getting quotes from multiple companies first. This allows you to compare the premiums offered by different companies, the coverage available and the discounts you want. Try to get offers with the same coverage as often as possible.
“Family and friends are valuable resources when purchasing new products and services,” says Demora. “In many cases, they are already prepared to provide helpful advice and narrow down your search, and finding the right auto insurance company is no exception.”
Whether you get a quote online, by phone, or through an agency, you should have some basic information ready. You must provide the names, dates of birth, driver license numbers, and addresses of all drivers in your household. We also need the year, make, model and vehicle identification number (VIN) of all vehicles. If you have a copy of our current policy statement page, that information will be displayed along with your current coverage. You should also be prepared to provide passport or accident dates and details that have occurred in the last 3-5 years. You may omit this information to receive the offer, but providing this information may make the offer more accurate.
You can also see available discounts when searching for businesses. Asking the company to include all eligible discounts in one offer will help you find cheaper coverage.
4. Contact your current provider
If you have received an offer from another company, we recommend contacting your current auto insurance company. We may not be able to offer you low rates just to keep your business running, but we can identify discounts and other savings opportunities you’re currently missing. The agent may make suggestions on how to reduce costs. B. By keeping a clean driving record or buying a cheaper vehicle.
This step is especially important if you have independent agency insurance. Independent agents can represent multiple insurers, unlike captive agents who only sell insurance products for a single company. Independent agents can buy policies from providers to find lower rates while keeping them at the same agency.
5. Research the new company
We recommend that you thoroughly research your insurance company before purchasing a policy. Some useful features are:
- National Association of Insurance Commissioners (NAIC): The organization ranks each company based on the average number of complaints it receives and also gives a score. A score above 1.00 indicates complaints above the industry average, and a score below 1.00 indicates complaints below the industry average.
- JD Performance: The company has a score of 1,000, with multiple dimensions of the survey, including overall customer satisfaction and satisfaction with complaints.
- AM is better: If you want to learn more about the company’s financial strength, AM Best is a good resource. AM Best assigns companies a Letter Quality Financial Strength Score. This can indicate a company’s ability to pay its accounts receivable.
- Bankrate Insurance Company comments: Our editorial team analyzes average premiums, customer service ratings, financial strength ratings, available coverage and discount offers to identify the best auto insurers. There are national reviews as well as specific state reviews.
Price is an important consideration, but it’s not the only one to consider when choosing an auto insurance company. By working with a licensed insurance professional, you can choose the insurance company that best fits your needs.
6. Avoid coverage gaps
“If you decide to switch insurance, it’s best to plan before your current policy expires,” says Demora. “By moving early, you can prevent gaps in the cover.”
Losing insurance coverage can lead to serious legal and financial problems, especially if you are involved in an uninsured accident. If you cause an accident and are uninsured, you are responsible for compensating for damages at your own expense, including medical expenses. Even if you weren’t at fault, most states require your insurance company to show your DMV your insurance card if the police are called after an accident. If you do not have insurance, your license may be suspended.
If you drive without insurance, you may be seen as a riskier driver, so insurance companies may charge you higher premiums in the future. The new insurer should be able to schedule the new policy to start when the old coverage ends.
7. Make sure to cancel your previous policy.
When switching auto insurance to a new insurance company, there are a few things you need to do to make sure your current policy ends. Do not assume that if you stop paying premiums, your insurance will automatically be cancelled. If you signed up for automatic renewal, your current wireless service provider may report your non-payment to the credit bureaus. It’s safer to officially cancel your old car insurance than to cancel without paying.
You can cancel your old policy by following the steps below.
- Please contact your current insurance company and tell them you want to cancel. This will prevent future premiums from being charged.
- If you signed up for automatic payments, you may need to log into your online account to turn off automatic payments. If you use your bank’s bill payment service to pay your premiums, be sure to stop the payment at your bank.
- You may ask the provider to confirm the cancellation in writing. If you continue to receive bills or receive negative comments on your credit report, certify that you have canceled the policy. You can dispute a fee or an entry on your credit report.
Each insurance company has its own cancellation procedures. You may need to sign a form authorizing the cancellation, or a simple phone call may suffice. If your company offers an online portal or mobile app, you can opt out there.
8. Print a new car insurance card
Once you have officially canceled your old policy and purchased a new policy, replace the old policy in your car or wallet with a renewed policy. If you’re stopped by the police or involved in an accident, you’ll need proof of coverage from your new provider.
“Most insurers allow access to your ID card online via your smartphone, but we recommend that you have a paper copy with you if you are visiting an area without cell phone service.” explains Demora.
Frequently Asked Questions
How often should I get new car insurance?
If your life or financial situation has changed since you purchased your auto insurance policy, it may be time to purchase a new policy. You can also contact your current provider to renew if necessary. Wireless service providers can adjust their policies accordingly. However, just because you bought a new policy doesn’t mean you need to change your coverage. If you stay with the company for a certain period of time, you can get a loyalty discount.
Can I change my car insurance during a claim?
While it’s possible to change car insurance companies when a claim is pending, most insurers discourage doing so. Current insurers will settle existing damages with the required payments.
However, if claims are still open when you switch to the new policy, the new provider does not have the payment information to correctly determine your level of risk. This may increase your renewal or retroactive amount because your claim was not properly applied. Each company has its own underwriting policy and no new business can be accepted on an open account.
Will my car insurance company refund the premiums I have already paid?
This depends on your car insurance company’s reimbursement policy. Please call to confirm cancellation policy. In many cases, when you cancel your car insurance, you are entitled to a refund. If you cancel your policy on your renewal date and have not yet paid your renewal fee, you may not receive a refund.