How to Switch Car Insurance Companies

If you are dissatisfied with your current car insurance provider, you may want to consider switching carriers. When drivers shop around and look at other providers, they may find a better rate or friendlier customer service agents.

You're not alone if you're wondering how to switch car insurance companies. Switching carriers isn't difficult, but it does necessitate some forethought and research.

Switching insurance companies is not difficult, but it does necessitate some preparation. Coverage, claims experience, discounts, and price are all important factors to consider when looking for an insurer to protect your car. Find out how to tell if you need to switch insurance companies and what to expect if you do.

Reasons to switch car insurance companies

Changing car insurance companies is not something you should do on the spur of the moment. Although it is preferable to stay with a carrier that provides good coverage and service, it is sometimes in your best interest to obtain coverage from a different company.

The following are some of the most common reasons for car owners to switch insurers:

• Adding a teen driver: When teenagers get their driver's licenses, their parents frequently add them to their existing auto policies. However, insurance rates for teen drivers can vary greatly. When adding a teen driver to your policy, shop around for the best premium.
• Poor service: If you are dissatisfied with the way your current provider handled a claim, are having difficulty reaching your insurance agent, or have had numerous billing issues, you should look for a new insurer.
• Better rates: Some car owners choose an insurance company based on the recommendation of a friend or family member rather than shopping the market for the best rate. If you are paying a high premium and discover a lower rate with another provider, it may be time to switch.
• Car in storage: Some insurance companies will allow you to pause your car coverage if you put your car in storage for an extended vacation or military deployment. If your carrier does not provide this option, you may want to consider switching to another insurer.
• Transfer to a different state: Car insurance policies are written in all states by large carriers such as Allstate, State Farm, and Geico, making it simple if you need to relocate. If your current provider does not provide coverage in the state where you are relocating, it is time to switch.
• Need more policies: Many insurance companies provide discounts for bundling your auto insurance with a business, home, or renters policy. If your current insurer does not provide the additional coverages you require, look for a company with a broader portfolio of insurance products. Purchasing all of your policies from the same company provides convenience and, in many cases, significant premium savings.
• Rate hike: Filing claims, being involved in traffic accidents, or receiving traffic violations can all result in a rate hike. It is, however, not uncommon for a policyholder to receive a rate increase for no apparent reason. If your insurance rate rises, ask your agent for an explanation and consider switching to a different carrier.
• Selling a vehicle: If you plan to sell your current vehicle, you may be able to save money on insurance if you shop around before purchasing another vehicle.

When should I switch policies?

The best time to switch to a new insurance carrier is near the end of the term of your current policy. Assume your policy expires on June 15, and plan for the new policy to begin on the same day. Switching at the end of the policy term allows you to avoid early cancellation fees from your current carrier and makes the transition easier. Never, ever let your auto insurance lapse, even for a single day.

Steps to switch car insurance companies

Switching insurance companies is simple, but you must plan ahead of time. Follow these simple instructions on how to change car insurance.

1. Research car insurance providers

When you've made the decision to switch car insurance companies, the first step is to look into potential alternatives. We recommend looking at the best providers in your area as a starting point, based on J.D. Power's 2020 U.S. Auto Insurance Study. This makes it simple to determine which providers offer coverage in your area.

Consider the factors that are important to you while researching car insurance companies. For example, do you want the lowest possible price or do you value good customer service more? Each insurance company has advantages and disadvantages, so look for companies that meet your specific requirements.

It's also a good idea to read customer reviews and check financial strength ratings for any company you're considering. Reviews from real customers can be found on websites such as the Better Business Bureau and Consumer Reports, so you can see what it's really like to be a policyholder.

2. Get quotes

Once you've narrowed it down to a few strong contenders, request sample quotes to compare rates. Examine the discounts that each company provides as well. Even if a company quotes a high premium, it may be the cheapest option if it offers multiple discounts that you can take advantage of.

3. Purchase an insurance policy

The next step is to purchase a car insurance policy from the new company. Some companies allow you to buy a policy online, but we recommend speaking with an agent to ensure you're getting the bare minimum of insurance required in your state. To avoid a lapse in coverage, set the start date a few days before your old policy expires.

4. Cancel your current policy

To cancel your current policy, contact your current insurer. Some insurance companies will let you cancel your policy over the phone, while others will require you to mail a physical letter. You may be able to choose a specific day for your coverage to end, but most people cancel on the last day of the month. In either case, ensure that the end date overlaps slightly with the start date of your new policy.

Inquire about any cancellation fees or prorated premiums when you cancel your policy. If you have a car loan, notify your lender that you are changing companies. They will request information about the new policy so that they can keep it on file and update records on their end.

5. Follow up on new coverage

The last step is to check in on your new coverage. Check to see if the new policy is in effect on the day your old coverage is set to expire and your new policy is set to begin. You can usually sign in online to see if your policy is active because most large insurers provide online account access. If you notice any errors in your policy, such as a misspelt name, an incorrect car model, or a problem with your coverage limit, contact your insurance company as soon as possible.

Canceling a car insurance policy

When you switch car insurance companies, you must cancel your current policy and purchase a new policy from a different company. The cancellation procedure differs from one company to the next. Allstate, for example, requires policyholders to contact a local agent to cancel a policy, whereas Geico allows customers to cancel by calling a toll-free number.

If you cancel coverage before the end of the policy term, some companies charge a cancellation fee. Because state insurance codes differ, cancellation fees, if any, may vary. Many large corporations do not charge a cancellation fee if you cancel at the end of a policy term. However, some carriers may charge a short-term cancellation fee, which is typically 10% of the unearned premium. For example, if your monthly rate is $100 and you cancel two months before the policy's expiration date, the carrier may charge you a $20 short-rate cancellation fee.

Review your policy's declarations section or speak with your agent to find out if your insurance company charges a cancellation fee. Most businesses do not publish their fees, and they differ by state.

Mistakes when switching car insurance companies

Unfortunately, some people change insurance companies when they do not need to or make mistakes that can result in financial losses.

• When you sell a car, do not cancel your insurance coverage until the new owner takes possession.
• If you move to a different state, don't assume you have to change carriers. Find out if your insurer writes policies in the new state before purchasing a policy with a new carrier. A national provider can frequently transfer your policy to another agent.
• If you get married and like your current plan, talk to your agent about adding your new spouse to it.
• Instead of switching carriers, consider dropping coverages. If you own your car outright, you can save money by dropping collision and comprehensive coverages, which is a much easier option than switching carriers.
• Inquire with your current insurance agent about discounts. If the cost of insurance forces you to switch providers, you may be able to lower your premium by applying for discounts. Although you may not be eligible for any discounts when you first buy a policy, this may change over time. Some insurers, for example, provide discounts when you buy a home, retire, or reach the age of 55.
• Never, ever let your coverage lapse, even for a single day. Even if you switch carriers, a lapse in coverage can result in a higher premium.

Saving money on your new car insurance policy

To save money on new car insurance, look for companies that offer the best combination of low rates and discounts. Look for discount programs that are appropriate for your vehicle. Allstate, for example, provides discounts for newer models and vehicles equipped with antilock brakes and anti-theft devices.

One of the best and most common ways to save money is to combine an auto and a home or renters policy. Amica, for example, offers up to a 30% discount when you buy a car and a condo, home, or renters policy.

Consider insurers that offer usage-based car insurance rates if you are a good driver who never gets speeding tickets or has accidents. Progressive's Snapshot program, for example, monitors your driving habits via a mobile app that you install on your smartphone. The program rewards you with lower rates if you consistently follow the rules of the road and avoid accidents.

Switching car insurance isn't difficult, but it's critical to take the proper steps to avoid paying more money than necessary. Use this guide the next time you need to switch service providers.