December 15, 2019

How to Switch Car Insurance

Switching your auto insurance is an easy process. But is it worth it? And what are the downsides? We cover everything you need to know in our guide.

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Switching your coverage is fairly simple, especially if you have a clean driving record and no claims history. You'll need the following information:

  • Name, birthday, and Social Security number
  • Driver's license information
  • VIN (Vehicle Information Number)
  • Declarations page from your current policy including your premiums, the policy period, people covered under the policy, and vehicle information

But before you switch, learn:

Can I switch car insurance before the renewal date?
Some carriers may charge you an early cancellation penalty fee. If this is the case, you should compare the cancellation penalty to the savings or benefits you expect to get with your new carrier. You may want to stick it out until your policy comes up for renewal.

Best Way to Switch Car Insurance

To switch your insurance, contact the new insurer to begin a policy. After answering questions about your coverage needs, you can review and make a down payment to put the policy in effect.

Once your new policy has started, you can call your former auto insurance company to cancel coverage. If you are switching insurers at the end of a coverage period, this may not be necessary since your current policy will simply expire. Just be sure your account isn't set up for automatic renewal.

If you are switching car insurance due to cost, consider asking your current provider to match the cheaper quote from the competitor. To keep your business, they may offer additional discounts or savings to lower your premium.

Why Switch Car Insurance Companies?

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Here are some reasons you may want to consider switching your car insurance:

  • Rate increase
  • Bad experience with a claim
  • Adding or removing a vehicle (or driver)
  • Changing your coverage limits
  • Moving to a different residence
  • Buying or renting a new home
  • Lack of options with your current compant

If any of these situations apply to you, or if you're just curious about what else is out there, read on to learn when to make a change.

Changing Car Insurance Coverage and Companies

Most auto insurance policies offer flexibility, whether you're looking to switch companies or simply change coverages. Keep reading to learn more.

When to Switch Car Insurance Coverage
In most cases, you can change your insurance policy coverage at any time throughout the year before your policy is up for renewal.

Insurers encourage policyholders to update their auto coverages should they experience a life change, such as one of those listed above.

When to Switch Car Insurance Providers
Generally, you are able to change carriers mid-policy, but you may want to check your current policy for a specific cancellation provision. In most cases, it will outline the cancellation process and terms for the return of unused premiums.

Make sure your new policy is in effect before you cancel your old one. This will help you avoid any gap in coverage, which can lead to legal penalties or fines in most states.

Can I change my car insurance at any time?
Most coverages can be changed at any point during the policy term. But some are eligible for changes only at renewal.

These include:

  • Accident forgiveness
  • Minor violation forgiveness
  • New car replacement
Talk to your insurance agent or company to learn if this restriction applies to any of your coverages.

Downsides to Switching Insurance

While changing carriers can earn you better rates, more perks, or better customer service, it may also mean missing out on loyalty discounts.

Most insurance carriers offer these discounts to customers who stay with them for a certain period of time. By switching carriers, you would not qualify.

Some carriers may also charge an early cancellation penalty if you switch before the annual policy renewal period.

There is typically no impact on open claims if you switch companies before the claim is closed. Your current insurer will still pay out the claim as it normally would.

How to Save Money on Car Insurance

Look for Discounts
Be sure to ask your insurance agent or carrier what discounts you may qualify for, including:

  • Loyalty discounts
  • Bundling discounts
  • Safe driver discounts
  • Good student discounts
  • Drivers education discounts
  • Auto-pay discounts
  • Paperless billing discounts

Keep a Clean Driving Record
A clean record means your policy is less risky to the insurance provider than if you had multiple accidents or tickets. Low risk equals lower premiums.

Improve Your Credit Score
Companies consider your credit when assigning your risk score. By improving your credit score, you may also improve your risk score and lower your premium.

Shop Around for the Best Rates
By quoting different companies, you'll be able to find the one that offers the lowest price.

Raise Your Deductible
By having a higher deductible, you will likely lower your monthly premium costs. The downside to this is if you are in an accident, you'll have to pay more out-of-pocket.

Combine Policies
You may receive a discount or save money on premiums if you insure multiple people or vehicles on the same policy.

Bottom Line

There's usually no penalty for switching car insurance, but review your policy to be sure. You'll also want to avoid any gaps in coverage—start your new policy BEFORE cancelling your existing one.

Even if you're satisfied with your current car insurance, you should review your coverage regularly. Ask about available discounts and other perks. Remember, you want to choose a carrier that offers the coverage you need at a price you can comfortably afford.

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