How to Switch Car Insurance

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Contributor, Benzinga
March 3, 2022

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If you're thinking about changing your auto insurance policy, you may be wondering how to switch car insurance providers. A seemingly endless number of policy options and insurance providers abound, so it can be easy to feel overwhelmed and choose the first policy you come across, rather than finding the best fit for your needs.

The good news is that your insurance choice doesn’t have to be permanent. Can you switch insurance companies in the middle of a policy? Yes, you can switch your car insurance provider to pursue a lower rate. If you think you need a change, check out our step-by-step guide.

Why Consider Switching Car Insurance Providers?

Here are the instances in which you may consider car insurance policies. Whether you buy car insurance online, want to change car insurance policies or need to cancel car insurance today, you need to know what you’re getting into.

1. You’ve purchased a new car or are adding a new driver

If you’re leasing your car, your dealership may require that you maintain full comprehensive coverage until the car is completely paid off. This is a great time to seek out new car insurance and make sure that you’re getting the lowest rates possible. Additionally, if you have recently gotten married or you’re adding a teen driver to your insurance policy, shop around for insurance quotes to make sure that your insurance provider has still offered you the best deal.

2. You’re moving

Some insurance providers do not offer continued coverage if you move to a new city or state or they may try to increase your rates before the move. You need to know how to switch car insurance to your new location, if you can. If not, you need to know how long it takes to get car insurance in your new location.

3. Your current level of coverage isn’t right for you

Watch out for cheap car insurance. In many cases, insurance companies limit the amount of maintenance and repairs covered for you. If your car is aging and requires more repairs than before, it might be time to upgrade your policy with a competitor. Can you cancel car insurance at any time? Yes. It’s better to move on than drive unsafely with the wrong policy.

4. You're overpaying

Every insurance company uses its own unique formula and list of factors to determine how much you’ll pay for coverage and the deductible you’ll be expected to cover. It’s possible to get quotes for the exact same insurance package from 10 different insurance providers for 10 completely different prices.

Some insurers place a large amount of importance on your credit score, others have a formula that relies heavily on the age of the driver. Some will only look at your accident history and some will consider your teen driver’s good grades and car insurance needs to extend a lower rate. If you think you’re paying too much for insurance, get a few quotes from competitors – you might be surprised at just how much you might be able to save.

Can I switch my car insurance at any time?

Most car insurance policies grant you the right to cancel your policy at any time for any reason, but most require you to give notice if you are canceling before the policy expires. The best car insurance providers will also mail you a check for your pro-rated refund and cancel your coverage at your request, but some insurance providers may charge a cancellation fee if you cancel before the expiration date. Before you decide to make the switch, remember to check your contract for fees and penalties.

How to Switch Your Car Insurance Provider

Changing car insurance providers is a relatively quick and painless process. Follow our step-by-step guide for a flawless transition:

Step 1: Get More Than One Quote

The best way to make sure that you’re saving as much money as possible on your car insurance is to get plenty of quotes before committing to a policy. Most experts suggest that you’ll want to get at least three quotes before you make a decision, but the more quotes you secure, the better. If you’re looking for car insurance online, you can see more quotes and comparisons in one place.

Make sure to ask insurance providers plenty of questions about your policy options when you get a quote, including what is and is not covered, your deductible and premium options, and when your coverage kicks in. Some other questions you may want to ask your insurance agent include:

  • Will this insurance package protect me in the event that I am hit or otherwise injured by an uninsured motorist?
  • What is my risk assessment? How did you reach the number quoted? Are there any steps that I can take to lower my premium?
  • Who is insured to drive my car on the rate that you quoted? How much will it cost to add another driver to my insurance in the future?
  • Do you offer any discounts (sometimes referred to as “credits”) for teen drivers with good grades, drivers who own an eco-friendly vehicle or drivers who pay for assigned parking in a secured garage?
  • Do you offer 24/7 claims reporting? What are the special requirements I must have and steps that I must follow to submit a claim?
  • If my vehicle is involved in an accident, will this policy cover original equipment manufacturer’s parts or is the policy limited to aftermarket parts only?

Once you’ve authorized him or her to do so, an independent insurance agent can help you locate the best policy in your area and can handle most of the quote-gathering legwork.

Step 2: Compare Quotes and Research Your New Provider

Do not cancel your old insurance policy before you’ve chosen a new provider. Yes, learning to get car insurance online and making the switch can be a relief, but you need to be careful. Compare the quotes that you’ve received and don’t be afraid to do a little digging for information on each company; some insurance providers might provide low rates but in exchange for shoddy coverage or poor customer service.

When you research the new company, try checking your local provider’s rating in the Better Business Bureau or contact your state insurance office and ask to view customer complaint ratios – most states monitor insurance customer complaints about things like breach of contract or failure to pay a claim. You don’t want to sign on with a new policy only to find that the company has a history of trying to claim that drivers on its policy were at fault for every accident.

Step 3: Contact Your Current Carrier and Consider Attempting To Negotiate

Insurance providers know that it’s much more expensive (and much, much riskier) to bring on a new client than it is to keep an old client’s business. You might be surprised at how much leverage you have to negotiate and just how hard an insurance agent will fight to keep your business, especially if you have a clean driving record and have not made any recent claims.

If cost is your primary concern, consider telling your current insurance provider that you have received a lower quote from a competitor and are attempting to negotiate a lower rate. Many insurance agents will try to match or beat their competitor’s rates and they may even add additional bonus coverage at no extra cost to keep you on your current plan.

If you’re sure that changing carriers is the right choice for you or you cannot reach an agreement with your current provider, inform the agent that you would like to cancel your policy. Ask about any early cancellation fees and remember to write down the date that your current coverage ends.

Contact your new provider and sign up for your new policy. Make sure to compare the policy beginning and end dates to ensure that there are no gaps in your coverage. Then request that your old insurance provider sends you a written confirmation stating that your policy has been terminated by email or by mail and retain this document for your records. Always put the new one in force before canceling the old one.

Notify your lender, too. The lender needs to know you have insurance, because the carrier will receive notification that you cancelled your old policy.

Step 4: Drive Carefully

Most insurance policies come with a caveat that makes it very easy for them to drop you from coverage if your policy is less than 90 days old. While you should obviously drive safely every time you get behind the wheel, you’ll want to be extra careful during the first three months. Obey all posted speed limits, consider avoiding tight parallel-parking spots and make sure you don’t let anyone borrow your vehicle who’s not on your policy.

Step 5: Double-Check That Your Old Insurance Policy Has Actually Been Canceled

Double-check your credit card or bank statements at the beginning of the next month to make sure your old insurance company hasn’t charged you for coverage after you’ve canceled. If you’re billed after you’ve canceled, the written confirmation of termination will assist you in getting the charge reversed.

Switch Your Car Insurance with Ease

The easiest way to get insured is to go with the car insurance provider that your friends, family members or co-workers use, but what if their choice isn’t the right choice for you?

Take time to do your research and secure a number of quotes to save you time, money and stress. Evaluate cancellation fees and refunds, make sure your old policy is canceled, buy car insurance online or reach out to a new car insurance agent and save money.

Even if you’re happy with your current insurance package, you might want to test the waters and ask for a few quotes from competitors.

Car insurance premiums are heavily influenced by factors such as age and driving record, so if you’ve been on the road for a while without incident, it might be time to negotiate a lower rate with your provider.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.