Changing your car insurance is quite simple and you can do it at any time, even in the middle of the policy, not just when your insurance is about to renew.
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Even if you’ve paid for your car insurance annually, you can get a prorated refund from your old insurance company when you drop coverage mid-year. however, you may be required to pay a small cancellation fee, depending on your current insurance company’s policy.
how to change car insurance
Changing your car insurance is a fairly simple process, but you must follow the steps in the correct order:
1. look for a better rate
The first step in changing auto insurance companies is to find a new company. take your time to find the right mix of low prices, helpful coverage options and reliable customer service, especially if you don’t need a new policy urgently. The more insurers you check out, the better, but be sure to collect at least three to five quotes from different insurers. Take a look at the average rates for drivers in your area so you can understand what is considered a competitive price.
Tip: Auto insurance quotes don’t last forever. If you get a quote from an insurer, be sure to write down their reference number, so you can refer to it later. And keep in mind that it may expire after a week or two, so don’t delay too long when shopping around.
As you collect quotes, think carefully about whether your coverage needs have changed and if there are new discounts you may now be eligible for. For example, maybe the value of your old vehicle has dropped enough that you can drop collision coverage. Or maybe your annual mileage has decreased or your driving has improved, so you could save money by switching to a pay-per-mile or telematics policy.
After you’ve found the best price for insurance, call your current provider before committing to switch to the new company. See if your current company will match the quote you got from a competitor and ask in detail about the company’s cancellation process. You may need to give your insurer advance notice to cancel your policy, sometimes up to 30 days, as well as pay a small fee to cancel your policy, though you’ll receive a refund for most of your unused premium once you cancel.
once you’ve decided to switch insurers, purchase your new policy and confirm it’s active.
2. cancel your old policy
four of the largest insurers in the us. uu. — state farm, geico, allstate and farmers — don’t penalize you for canceling a policy early. Progressive is an exception, although the fee varies by state: For example, the progressive cancellation fee in New York is $50.
Once you have proof of insurance from your new provider, contact your old insurance company to cancel your policy. You’ll get a refund for any coverage you’ve paid for but haven’t used, so do it as soon as possible to get a larger refund.
driving without insurance can cause you to lose your license. Even if you don’t get caught, gaps in coverage can eventually cause your premium to go up significantly. It’s much better to have a few days of overlapping coverage than risk going uninsured.
3. notify your lender (if you have one)
If you have an auto lease or loan, be sure to notify your leasing provider immediately after changing insurance companies. Most car leases and loans require you to have insurance, and if your loan company thinks you’ve canceled your insurance, they can repossess your car or purchase a separate policy for you.
The only time your insurer can drop you as a customer is during the first 60 days your new auto insurance policy is in effect. During this time, take extra care to avoid accidents and violations so you don’t run out of auto insurance or need to find alternative coverage.
why change auto insurance company?
The main benefit of switching auto insurance providers is saving money on your premiums. Even if you found the cheapest rate when you first signed up for insurance, the company that gave you the lowest price two years ago might not be the best choice now.
And if a life circumstance that affects your auto insurance rates has changed (you bought a new car, added a new person to your policy, or moved, for example), there’s an even greater chance you can find a better rate with another insurer. Below, we’ve listed the cheapest auto insurers by their six-month average rate.
Of course, a low premium isn’t the only thing to consider when choosing an insurance company. If you’ve had a poor customer service experience with your current provider or are interested in a benefit or advantage offered by a different auto insurance company, you might also consider switching. some examples include free roadside assistance or gap coverage for a new car lease or loan.
When should I switch to a new auto insurance company?
There’s no harm in shopping around for a better price than you’re currently getting on auto insurance, so you can shop around for better rates as often as you like. but you’re especially likely to find a big difference in price when you experience a life change that affects how insurance companies calculate your rates.
for example, while your current carrier might offer the best rates for single drivers, another insurer might offer a better price to a married couple, so it might be a good idea to shop around after you get married.
Not a specific time, but another notable time to look for insurance is in the years following an at-fault accident or traffic violation. If your rates have increased due to an accident or speeding ticket in recent years, it’s worth checking every six months to see if you can get a lower rate, as your rates will gradually decrease.
Each auto insurance company values traffic accidents and violations differently. for example, one company might stop penalizing you for being at-fault in an accident after five years, while others might after just three.
You can change insurers even when you have an open claim
Changing insurance companies will have no impact on an open insurance claim you have. Your current insurer will still pay the claim as it normally would, even if you drop coverage from them. however, keep in mind that you will have to deal with two auto insurance companies simultaneously until the claim is paid.
facilitate the process of changing insurers
One challenge with changing auto insurance companies is that you must have your new policy in force before you can cancel your old one. While you may eventually be able to get reimbursed from your insurer for the time your policies overlap, people without a lot of extra cash may find this a barrier to switching insurers, even if it saves money in the long run. Here are some ways to switch insurers cheaply:
when not to change insurance company
Although switching insurers may end up saving you money on auto insurance, sometimes there are good reasons to stay with your current insurer. If you’re considering a switch, it may be helpful to consider the benefits you might be giving up by leaving your old insurance company. this way, you’ll have a way to compare the costs of switching against the benefits.
if you have had a recent accident or a fine
While there’s no time you should avoid looking for a better car insurance deal, you’re much less likely to save money by switching if you’ve been in an accident or convicted of a moving violation since your last policy renewal .
Having an accident or receiving a ticket can increase your rates, but insurance companies usually only recalculate your premium at renewal.
so if you cause an accident today and your insurance policy won’t renew in six months, that’s half a year of paying the pre-accident rate. on the other hand, if you switch insurers immediately after an accident, your rates will reflect the incident immediately.
if you have a loyalty or bundle discount
Many insurance companies try to retain customers by offering loyalty discounts for long-term customers. for example, amica offers progressively higher premium discounts to clients the longer they stay with the same insurer, starting at two years.
Bundle discounts are another way insurers encourage people to stick with the same policy. Combining your auto and home insurance can give you significant savings on both policies. For example, State Farm offers up to 18% off your auto insurance premium if you also have homeowners coverage.
if you qualify for accident forgiveness
Accident forgiveness can potentially save you thousands of dollars, making it a valuable benefit for long-term clients. Most companies only offer accident forgiveness after three or more years of continuous coverage, so switching companies may mean losing access to this feature for some time.
The top five auto insurers in the country require you to maintain an average of 5.4 years of claims-free coverage before accident forgiveness is available. geico and allstate allow you to pay a fee for immediate forgiveness of the accident, but that incurs an additional cost. At the extreme end, Erie insurance gives customers lifetime accident forgiveness if they stay with the company for 15 years.
To find the cheapest auto insurance in the country, we pulled together quotes from 51 insurers in all 50 states and Washington, D.C., though not all insurers are available in every state.
valuepenguin’s analysis used insurance rate data from quadrant information services. These rates were obtained publicly from insurer filings and should be used for comparison purposes only; your own quotes may be different.