How to Switch Car Insurance Companies

If you don’t love your current car insurance company, you might be considering switching carriers. Oftentimes, drivers can find a better rate or friendlier customer service agents when they shop around and take a look at other providers.

If you’re wondering how to switch car insurance companies, you’re not alone. Switching carriers isn’t difficult, but it does take some planning and research. Keep reading to learn how to tell if you need to switch car insurance companies and what to expect if you decide to make the change.

[ Read: 9 Things You Didn’t Know About Car Insurance (But Should) ]

Compare Affordable Car Insurance Rates

Save money on auto coverage with our simple comparison tool.

Matching you with providers.
We found results in
Click at least 2-3 companies to find the very best rate.
    In this article

      Switching insurance carriers isn’t difficult, but it takes some planning. Considerations such as coverage, claims experience, discounts and price play a crucial role in finding an insurer that can protect your car. Learn how to tell if you need to switch insurance companies and what to expect if you decide to make the change.

      Reasons to switch car insurance companies

      Switching car insurance companies isn’t something you should do on a whim. Although it’s best to stay with a carrier that provides good coverage and service, sometimes it’s in your best interest to get coverage with another company.

      Common reasons auto owners switch insurers include:

      • Adding a teen driver: When teenagers get their driver’s licenses, parents often add them to their current auto policies. But insurance rates for teen drivers can vary widely. When adding a teen driver to your policy, shop the market for the best premium available.
      • Bad service: If you’re not satisfied with the way your current provider handled a claim, have trouble reaching your insurance agent or have had numerous billing problems, you might consider shopping around for a new insurer.
      • Better rates: Car owners sometimes choose an insurance company on the recommendation of a friend or family member without shopping the market for the best rate. If you’re paying a high premium and find a better rate with another provider, it might be time to switch.
      • Car in storage: If you put your car in storage to go on an extended vacation or for a military deployment, some insurance companies will allow you to pause your car coverage. If your carrier doesn’t offer the option, you may want to switch to another insurer.
      • Move to another state: Large carriers such as Allstate, State Farm and Geico write car insurance policies in all states, making it easy if you need to move. If your current provider doesn’t offer coverage in the state you’re moving to, it’s time to switch.
      • Need additional policies: Many insurance companies offer discounts for bundling your auto insurance with a business, home or renters policy. However, if your current insurer doesn’t offer the additional coverages you need, shop the market for a company with a broader portfolio of insurance products. Purchasing all your policies from one company offers convenience and oftentimes great savings on premiums.
      • Rate increase: Filing claims, having traffic accidents or receiving traffic violations can lead to a rate increase. However, it’s not uncommon for a policyholder to receive a rate increase for no discernable reason. If your rate increases, ask your insurance agent for an explanation and consider switching to another carrier.
      • Selling a vehicle: If you’re planning on selling your current vehicle, you might save money on insurance if you shop around before buying another car.

      Compare auto insurance policies

      Just answer a few, simple questions and we’ll do the rest!

      [ Read: Why Is My Auto Insurance Premium So High? ]

      When should I switch policies?

      The best time to switch to a new insurance carrier is at the end of your current policy’s term. Suppose your policy ends on June 15, arrange for the new policy to begin the same day. Switching at the end of the policy term can help you avoid early cancellation fees from your current carrier and provides an easier transition. Never let your auto coverage lapse, even for one day.

      Compare Affordable Car Insurance Rates

      Save money on auto coverage with our simple comparison tool.

      Matching you with providers.
      We found results in
      Click at least 2-3 companies to find the very best rate.

        Steps to switch car insurance companies

        Switching insurance carriers is simple, but you do need to plan. Follow these simple on how to change car insurance.

        1. Research car insurance providers

        Once you’ve decided to switch car insurance companies, the first step is to research potential alternatives. As a starting point, we recommend looking at the best providers in your area based on J.D. Power’s 2020 U.S. Auto Insurance Study. That way, it’s easy to know exactly which providers sell coverage where you live.

        While you’re researching car insurance companies, think about the factors that are important to you. For example, do you want the lowest price possible, or do you care more about getting good customer service? Each insurance company has its pros and cons, so you’ll want to be looking for companies that meet your specific needs.

        It’s also important to read customer reviews and look at financial strength ratings for any company you’re evaluating. Sites like the Better Business Bureau and Consumer Reports have reviews from real customers, so you can see what it’s really like to be a policyholder.

        2. Get quotes

        Once you’ve found a few strong contenders, get sample quotes to compare rates. Also take a look at the discounts each company offers. A company that quotes a high premium can still be the cheapest option if they offer multiple discounts that you can take advantage of.

         [ Read: Auto Insurance Quotes, Explained ]

        3. Purchase a policy

        The next step is to purchase a car insurance policy from the company you’re switching to. Some companies allow you to purchase a policy online, but we recommend at least checking in with an agent to make sure you’re getting the minimum amount of insurance required in your state. You’ll want to set the start date for a few days before your old policy ends to avoid a lapse in coverage.

        4. Cancel your current policy

        Contact your current insurer to cancel your current policy. Some insurance companies allow you to cancel your policy over the phone, while others require you to send a physical letter in the mail. You might be able to choose a specific day for your coverage to end, but it’s usually the last day of the month that you cancel. Either way, make sure the end date overlaps slightly with the start date of your new policy.

        When you cancel your policy, ask about any cancellation fees or prorated premiums. If you have a car loan, be sure to notify your lender that you’re switching companies. They’ll ask you to provide information about the new policy so they can keep it on file and update records on their end.

        5. Follow up on new coverage

        The final step is to follow up on your new coverage. On the day your old coverage is set to end and your new policy to begin, check to make sure the new policy is in force. Because most large insurers offer online account access, you can typically sign in online to see if your policy is active. If you notice any errors in your policy, whether it’s a misspelling of your name, an incorrect car model, or an issue with your coverage limit, contact the insurance company as soon as possible.

        Canceling a car insurance policy

        When you change car insurance, you must cancel coverage with your current provider and purchase a new policy with another. The cancellation process varies by company. For instance, Allstate requires policyholders to call a local agent to cancel a policy, while Geico allows customers to cancel by calling a toll-free phone number.

        Some companies charge a cancellation fee if you terminate coverage before the end of the policy term. State insurance codes vary, so cancellation fees, if any, can differ. Many large companies don’t charge a fee if you cancel at the end of a policy term. However, some carriers may charge a short-rate cancellation fee, charging you a percentage of the unearned premium, often 10 percent. For instance, if your rate is $100 per month and you cancel two months before the end of the policy term, the carrier may charge you a $20 short-rate cancellation fee.

        To find out if your insurance company charges a cancellation fee, review your policy’s declarations section or speak with your agent. Most companies don’t publish their fees, and fees vary from state to state.

        [ More: When You Should Downgrade Your Car Insurance ]

        Mistakes when switching car insurance companies

        Unfortunately, some folks switch insurance companies when they don’t need to or make mistakes that can lead to financial losses.

        • Don’t cancel your insurance coverage until the new owner takes possession when you sell a car.
        • Don’t assume you need to switch carriers if you move to another state. Before purchasing a policy with a new carrier, find out if your insurer writes policies in the new state. Often, a national provider can transfer your policy to another agent.
        • Ask your agent about adding your new spouse to your current policy if you get married and like your current plan.
        • Consider dropping coverages instead of switching carriers. If you own your automobile outright, you can save money by dropping collision and comprehensive coverages, a much easier alternative to switching carriers.
        • Ask your current insurance agent about discounts. If the cost of insurance prompts you to change carriers, you may be able to reduce your rate by applying for discounts. Although you might not qualify for any discounts when you first purchase a policy, that may change over time. For instance, some insurers offer discounts when you buy a home, retire or turn 55.
        • Never let your coverage lapse, even for a day. A lapse in coverage can lead to a higher premium, even if you switch carriers.

        Saving money on your new car insurance policy

        To save money on your new car insurance, shop for insurers that offer the best combination of low rates and discounts. Look for discount programs that fit your automobile. For example, Allstate offers discounts for current model cars and vehicles equipped with antilock brakes and anti-theft devices.

        Bundling an auto and home or renters policy is one of the best and most common ways to save money. For instance, Amica offers up to a 30 percent discount when you purchase a car and condo, home or renters policy.

        If you’re a good driver who never gets speeding tickets or has accidents, consider insurers that offer usage-based car insurance rates. For example, Progressive’s Snapshot program monitors your driving habits using a mobile app you install on your smartphone. If you continuously follow the rules of the road and avoid accidents, the program rewards you with lower rates.

        [ Read: What Does the Progressive Snapshot Do For Your Car Insurance? ]

        Switching car insurance isn’t hard, but it’s important to follow the right steps so you don’t pay more money that you have to. Use this guide next time you need to change your provider.

        We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

        Reviewed by

        • Nashalie Addarich
          Nashalie Addarich
          Editor

          Nashalie Addarich is an editor for The Simple Dollar. She recently made a career switch from the legal field, where she was an attorney in Washington, DC. In her free time, she enjoys learning new languages. You can also find her editorial work on Reviews.com.