Switching auto insurance companies is easy and people do it all the time. however, it’s a good idea to talk to your current insurer and see if there are any cancellation fees. If your insurance agent finds out you want to cancel, they may also offer to look into additional discounts or give you a lower rate.
When you’re ready to start looking for new coverage, here’s what to do.
1. compare prices
The first step in switching auto insurance companies is to shop around to find a better rate. We recommend comparing rates from at least three providers. An easy way to do this is to use a quote comparison tool. this way, you only have to enter your information once to see many different options.
When searching, consider providers that have auto insurance discounts applicable to you. For example, State Farm has a student discount of up to 25%, which is better than any other major provider’s student discount. Also, consider usage-based or pay-per-mile programs if you want to save money based on your current driving habits.
Once you’ve identified a few favorite providers, research each company to learn about their customer service and claims experience. we recommend looking at studies like the j.d. energy 2022 usa uu. Insurance Buying Study℠ and the J.D. energy 2022 usa uu. auto insurance study℠. You can also check out the Bureau of Better Business online scores, the National Association of Insurance Commissioners (NAIC) Complaint Index, and AM Best Financial Ratings.
2. buy the best policy
The next step is to buy the new plan. If your current auto insurance policy is going to expire soon, schedule the new policy to start at least one day before your current coverage expires.
Doing this will prevent a gap in coverage. A gap of just one day can increase your car insurance rates in the future, since insurance companies consider you an uninsured driver by that time. it is much better to have two auto insurance policies for one day than none.
If you’re switching companies in the middle of a policy period, simply schedule the new coverage to start whenever you want.
Remember to list your lender on your new policy if you have a loan or lease. The lender is a loss payee, meaning you get paid first when your car is totaled if you still owe money. You’ll likely need to get full coverage insurance, including collision and comprehensive insurance, if you have an auto loan.
3. cancel your old insurance
Once you have your new insurance coverage, it’s time to begin the process of canceling your old policy. if you have any open claims, please note that your old employer will still be responsible for investigating and closing those claims.
Call your auto insurance company and speak to an agent about canceling your coverage at least one day after your new policy starts. you can schedule an effective cancellation date so you don’t have to remember to call on that specific day. however, don’t default on your old auto insurance policy without officially canceling it.
If you paid your policy in full at the beginning of a period, you should get a refund for the unused portion of that period. you can also get a small refund if you paid monthly.
4. get your proof of insurance
The next step is to print your insurance ID card or download an app to access it. most states allow you to show a digital ID card if you are pulled over. however, be sure to save it locally for offline access so you can access it whether you have cellular service or not.
5. tell your lender
Finally, if you have a car loan or lease, you’ll need to tell the lender right away about your new insurance coverage. Your lender was listed on your old car insurance, which means your old company notifies your lender of the cancellation. You should also have listed your lender on your new auto insurance policy, but it’s also a good idea to call the lender right away to make sure you have all the details of your new coverage.