Nearly half (46%) of consumers made changes to how they managed their auto insurance costs in 2020, according to the j.d. energy 2021 usa uu. insurance purchase study Among those who switched, 15% found another auto insurance company and 12% switched to a new insurer.
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If your car insurance needs have changed or you just want to shop around for cheap car insurance, here’s how to switch car insurance companies.
Reading: How to switch insurance on cars
how to change car insurance in 4 steps
1. compare auto insurance options
Because auto insurance rates vary widely between companies, one of the best ways to find the right policy is to compare auto insurance quotes from multiple companies. When comparing quotes, pay attention to:
Coverage options, limits and deductibles. Although price is an important factor, it is not the only thing to consider. Do you need more liability coverage in the event of a lawsuit against you from an accident? Or is it time to drop comprehensive and collision coverage because your vehicle is several years old?
“When comparing new quotes to your current premium, be sure to compare ‘apples to apples,’” says Jon Bloom, vice president of product management at Erie Insurance. “make sure the coverages are in line with the coverages you already have, so you don’t find yourself overinsured or underinsured.”
customer service and comfort. the best car insurance companies offer good service and a good price.
2. contact your current insurance company
When you have chosen a new company, you want the new policy to take effect before the old policy is cancelled. insurers allow you to choose an effective date. for example, you can choose to have your new policy take effect immediately or at a future date.
once you confirm that your new policy is effective, you can cancel your policy with your old insurance company. If you cancel an old policy before a new policy takes effect, you could find yourself in serious financial trouble.
First, you won’t have coverage for your car, which means if you’re in an accident, you’ll have to pay for car repair bills, property damage, and medical expenses.
Second, driving without insurance is illegal in most states, which can result in fines and license suspension.
Third, driving without car insurance creates a “coverage gap,” which will cost you more in insurance premiums when you buy a policy. That’s because insurers consider driving without insurance to be a higher risk, which means higher rates.
Be sure to ask for a cancellation confirmation. This way, you can make sure your car insurance policy with your old company doesn’t automatically renew.
3. redeem your new insurance ID card
Now that you have a new auto insurance company, you need to update your insurance identification cards. If you are in a car accident or pulled over, you may need to show proof of insurance.
Your insurer can usually provide you with proof of insurance by fax or email after you purchase a policy. But many insurers offer an electronic insurance card, either to download and store on your smartphone or through the company’s mobile app. digital insurance cards are acceptable in 49 states and the district of columbia.
4. notify your auto loan provider or leasing company
If you have a car loan or lease, be sure to contact your lender or leasing company and notify them of the change. Keep in mind that most lenders and leasing companies require you to have comprehensive and collision insurance.
reasons to change car insurance company
“It might be time to switch insurers any time your current insurer doesn’t meet your needs. For example, if you have a bad claims experience or an unexplained rate increase, it might be time to consider other options,” says Jon Bloom, vice president of product management at Erie Insurance.
here are reasons that might justify a switch to a new insurer:
- You had a bad claims experience. Usually, we don’t know how good our insurance company is until we make a claim. If you had an unsatisfactory claims experience, you may be looking to jump ship.
- Your policy is ready to renew. As you reach life milestones, your insurance needs will change. With this in mind, it’s wise to review your coverage before your current policy renews. If you think you’re overpaying, you may want to switch companies.
- You’re buying a new car. When you buy a new car, you want to make sure it has the right coverage. For example, you may want gap insurance if you take out a loan or lease, but not all companies offer this type of coverage.
- You’re moving. Where you live influences the cost you pay for auto insurance. But not all insurers price their coverage the same, so it’s a good idea to compare auto insurance quotes from multiple insurers. And keep in mind that your current insurer may not offer coverage in your new location, so you may have no choice but to switch.
- You’re getting married. Most insurance companies offer auto insurance discounts for insuring multiple vehicles on one auto insurance policy. If you and your spouse have different insurers, it could be the perfect opportunity to find an insurer that offers the best coverage and prices.
- You have a teen driver. Adding a teen to your policy can increase your annual premium by more than $2,000. But not all insurers set the same price for teen drivers. That’s why it’s worth looking into the best cheap car insurance for teen drivers.
- you retire. When you retire, you can say goodbye to your day job. With fewer miles driven, you may want to look into a non-traditional type of car insurance like pay-per-mile insurance.
- Your credit score has changed. In many states, insurers take your credit history into account when pricing your coverage. while drivers with bad credit pay more than drivers with good credit, not all companies raise rates by the same amount. That means you can find a more affordable rate by shopping around, even with bad credit.
- You had an accident or traffic violation. Generally, you pay more for coverage if you filed an accident claim or have traffic violations on your record. still, the amount your rate increases will vary by company. you may be able to find a company that has a lower rate than your current rate, even with recent accidents or tickets on your record.