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How to switch car insurance

Learn your next steps for changing auto insurance and what pitfalls to watch for

It’s easier to switch car insurance than you might think, and you could save a lot of money on premiums. If your premium went up or you have a new car, now could be a good time to compare rates and decide whether you should shop around or stick with your current insurer.

How do I switch my car insurance?

Switch car insurance companies seamlessly by stepping back and looking at the whole picture before you change over. Seven steps to make sure you’re switching to the right company at the right time:

1. Get the facts about changing your policy.

Search online or reach out to customer service about your current company’s cancellation process, including any fees for ending early. If you don’t finish all the steps to cancel, you might pay double for insurance or not get the prorated amount you were expecting.

2. Compare car insurance online.

Get quotes from several companies and find a new policy that fits your current life situation and driving needs.

3. Follow up on online quotes.

If you’re interested in a specific company, follow up your online quote with a call. An agent or customer service can add discounts, bundle coverage or help you decide your coverage level for the best price.

4. Figure out if it’s worth switching.

Look at how much you’ll save for changing companies and whether the coverage and service are worth it.

5. Avoid cancellation fees.

If you won’t be saving much or the cancellation fees are high, consider switching right before your current policy renews. Some states require cancellation fees costing 10% of your remaining premium.

6. Schedule your new policy ahead of time.

Have your new policy scheduled a few days before your current one ends for a possible early bird discount. Then, start the new policy the same day your old one ends to avoid a gap in coverage. Sometimes your new company can help you cancel your old policy, so don’t be shy about asking for help.

7. Notify your current company.

Once you have another policy scheduled, let your current company know that you’re planning to cancel and fill out any paperwork required. Typically, you have to call or notify in writing, unless you live in a state that allows online cancellations.

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How do I switch car insurance mid-policy?

Switch your car insurance before your next policy renewal. Many companies offer prorated refunds if you paid your annual or monthly premium and didn’t keep coverage for that entire time. You’ll follow the same steps as canceling your policy at renewal.

However, some companies do charge cancellation fees for ending your policy early. One of the easiest times to switch car insurance is at your policy’s renewal — switching at renewal simplifies the cancellation and refund process.

What should I consider when switching car insurance?

To make the most beneficial switch, look at several factors about your new and old policies and align all the details before for a smooth change. Here’s what to consider:

  • Coverage gaps. Check the start date on your new policy and make sure it’s set before your old policy expires. Even a small gap in coverage could put you at risk for lapsed insurance. A lapse means that you’ve gone some time uninsured, and it might hurt your rates with your new policy.
  • Change coverage for a better deal. If you can find a better deal with another insurance company, you either can make the change or use the quote to negotiate with your current company.
  • Balance coverage with cost. Make sure your new policy offers plenty of coverage to fit your driving habits as well as a fair premium for that coverage. A cheaper policy with less coverage might end up costing you more if you have to file a claim.
  • Review your premium every year. Make the habit to review your car insurance every year before renewal time. You may see your premium increase at this time since your company counts on most customers renewing their policy automatically without comparing other options.
  • Check your coverage amounts. Nix any add-ons or coverage that you may not need anymore, and double-check that all the policy details like your car’s mileage or model are correct. Also, consider adjusting your deductible if you’ve built up savings or your car has depreciated significantly.
  • Change policies when you buy another car. You’ll need insurance for a new — or new-to-you — vehicle, and another company may offer better rates for your new car’s make and model. Some companies also stand out with steeper multi-vehicle discounts than others.
  • Switching after an accident. Your claims history is available to your new insurance company, but your current company may not raise your rates until your next renewal. However, having an accident is a life change, so you might take the opportunity to shop around anyway.

Will switching save me money?

Because you can compare car insurance online, playing the field can save you a lot of money, but you’re not guaranteed savings. It’s important to get quotes and compare them with your current policy to make sure you’ll save some cash.

If your current company won’t offer you the deal you’re looking for or won’t match a quote, then you can tell your agent that you’re considering switching policies. Review your coverage amounts and add-ons to adjust to a lower rate if you like your current insurance company.

When to switch auto insurance

There’s no hard and fast rule on the best times to change your auto insurance company, but you may want to re-evaluate your needs annually or under these circumstances:

After major life events

You may find that switching companies after major changes in your life works in your favor. Compare policies after:

After hitting age milestones

Car insurance tends to get cheaper when you’re younger. Compare average rates when you hit significant car insurance milestones like 21, 25 and 35:

    When you’re unsatisfied with your current policy

    If your current insurance company is lacking in an area that’s important to you, you don’t have to wait around for a better option. You might shop around to:

    • Look for lower rates. Your insurance company might’ve hiked up your rates, or you might not be convinced that you’re getting the best deal.
    • Find top-rated customer service. You may prefer a company with high customer reviews or top ratings from review sites like J.D. Power and Trustpilot.
    • Get more or less insurance coverage. Different companies offer better deals and discounts based on how much coverage you buy.
    • Get better coverage for high-risk drivers. Many companies charge steep rates if you’re considered a risky driver, even if you only have one at-fault accident on your record. Look for high-risk auto insurers that may offer you a better deal.

    What to watch out for before switching

    Knowing how the industry operates can help you in your search for a better deal. The following are some things that your insurer won’t necessarily tell you, but are useful to know.

    • Don’t lie on your application. Insurance companies and the Department of Motor Vehicles share information with other insurance companies, so don’t lie about your claims history or driving record.
    • Make sure you agree with your car’s assessed value. Insurance companies may calculate your car’s replacement value based on the low end of its market value. Get value estimates from multiple dealerships and submit them to your insurance company to make sure your car is fully covered.
    • Your car is protected but not necessarily its contents. Personal items like stereo systems aren’t usually covered by your car insurance. If stolen or damaged, try claiming them on your home or renters insurance instead.
    • Loyalty isn’t always rewarded. To attract new customers, many insurers offer them better deals than their current customers are getting. To find out if that’s the case with your insurer, apply for a quote online as a new customer and compare it with what you’re currently paying.
    • Your premiums could go up for no reason. Most insurance renewal statements don’t list last year’s premium amount. Make sure you look at your last bill and compare what you paid then with the renewal rate. You might be surprised to find that your car insurance premiums went up without you realizing.

    What penalties are there if I switch car insurance too often?

    You can’t really change car insurance too often. Insurers might see on your record that you change insurers every year or even every few months, but you won’t be penalized for switching. You might be able to snag a loyalty discount up to 5% for sticking with any company for a few years, but you’ll probably save that much in premiums by switching anyway.

    But watch out for two potential pitfalls: Coverage gaps and cancellation fees. Make sure your new insurance starts the day your old insurance policy ends to avoid a lapse in insurance. And be sure to check if your current insurer charges cancellation fees — luckily, this isn’t common.

    Bottom line

    Switching car insurance isn’t as difficult as it sounds. Follow a few basic steps to make sure it’s the right move for you, then work with your current insurance company to find out its unique fees and switching process. You could save a bundle by comparing car insurance companies and switching to one that works better for you.

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