Switching Auto Insurance: Is It Possible?

You can switch auto insurance companies at any time, but there are certain events that warrant the switch sooner rather than later. For example, if you've recently moved, added a new driver or car, or experienced a life change such as getting married or buying a new vehicle. Switching car insurance companies can save you money on your premiums and it won't cost you anything to shop around for cheaper rates. However, it's important to do your research and communicate with your old and new insurers to avoid a lapse in coverage, which could result in fines and higher insurance rates.

Compare auto insurance quotes from multiple carriers

Comparing auto insurance quotes from multiple carriers is a great way to find the best deal for your circumstances. It is also a good idea to compare quotes when you experience a major life change, such as getting married, buying a new vehicle, or moving to a new location.

When comparing quotes, it is important to have the following information to hand:

• Personal information, including the address, date of birth, occupation, driver's license, and marital status of everyone you want included on the policy.
• Vehicle information, including the mileage, date of purchase, and Vehicle Identification Number (VIN) for each car.
• Driving history, including all claims, violations, and tickets received over the past five years, plus any completed driving courses.
• Current or previous insurer's name for anyone on the policy or in your household.

It is also important to compare the same types and amounts of coverage from each company, so you can be sure you are getting the best rates for the auto insurance you need.

• Get quotes from at least three different insurers.
• Use an insurance comparison site, such as The Zebra, to get quotes from multiple companies at once.
• Be aware that your age, driving record, and type of vehicle are some of the top factors that affect rates.
• Consider the company's customer service and claims satisfaction, as well as the price of the policy.
• Check for discounts that may be available to you, such as safe driver discounts or discounts for having multiple policies with the same company.
• Make sure to cancel your old policy once your new policy is in place to avoid a lapse in coverage, which can result in higher rates or legal trouble.

Contact your current auto insurance company

Contacting your current auto insurance company is an important step in the process of changing auto insurance providers. Here are some detailed instructions and considerations to keep in mind when reaching out to your current insurer:

Timing and Notice Period

Before committing to a new insurance company, give your current insurance provider a call. They may be able to match a competitor's quote or offer you new discounts. It's worth asking about their cancellation process and any notice period required. Some companies require advance notice of up to 30 days, so it's important to plan ahead.

Cancellation Process and Fees

Each insurance company has its own cancellation process and requirements. You may need to provide a written request to end your policy or call and speak directly with a customer service representative. Ask about any cancellation fees that may apply. Some companies, like Progressive, charge a fee for early cancellation, which varies by state. It's essential to understand these potential costs before making the switch.

Refunds

If you've paid for your current policy in advance, you may be eligible for a refund for the unused portion of your coverage. The sooner you cancel, the bigger the refund. Remember to cancel your old policy as soon as possible to maximize your refund.

Policy End Date

Find out the exact date your current policy ends. This information is crucial for ensuring there is no lapse in coverage. Your new policy should start on the same day your old policy ends to avoid any gaps. Ask your current insurer for confirmation of the policy end date in writing to have a record of it.

Discounts and Negotiations

If you're considering switching due to a better rate offered by a competitor, it's worth discussing this with your current insurer. While insurance rates are often non-negotiable, your current insurer may be able to review your policy and identify new discounts or savings opportunities. They might also be able to advise if you're over-insured and help you drop unnecessary coverages.

Independent Agents

If you use an independent agent, they can assist in finding a new policy from another company. Independent agents represent multiple insurers, so they can explore options across different providers to find one that better suits your needs and circumstances.

Avoid a lapse in coverage

A lapse in coverage, even if it's just for a day, can have serious consequences. Insurers see a period without insurance as risky behaviour and will likely raise your rates as a result. A coverage lapse of 30 days or fewer could see an average rate increase of 8%, while a lapse of more than 30 days could see an average increase of 35%. You may also face fines, tickets, and a suspended license, depending on the rules in your state.

To avoid a lapse in coverage, you should start your new coverage on the same day that your old coverage ends. Ask your old company for a statement in writing that includes the date the policy will end, and make sure your new insurer can begin coverage on that date. If you have a car loan or lease, you should also notify your lender or lease provider of the switch.

If you're unable to get new coverage before your old coverage ends, contact your insurance company as soon as possible. They may be able to reinstate your policy with minimal consequences, especially if it's only been a few days.

Notify your lender

If you have a car loan or lease, you must inform your lender or lease provider of your new insurance company. Most car leases and loans require you to have car insurance. If your loan company believes you've cancelled your insurance, they may repossess your car or buy a separate policy for you, known as a force-placed policy.

Your new insurer should be able to send proof of insurance to your lender or leasing company, but it's always a good idea to call your lender to make sure they have all the details of your new coverage.

If you have an auto loan, remember to list your lender on your new policy. The lender is a loss payee, which means they get paid first when your car is totalled if you still owe money. You'll likely need to get full-coverage insurance, which includes at least collision coverage and comprehensive insurance, if you have an auto loan.

If you don't notify your lender, they may receive a cancellation notice from your previous insurer and think there's a lapse in coverage. This could result in repossession as maintaining car insurance is part of the loan/lease agreement.

Research the new company

Researching the new company is an important step in changing auto insurance providers. Here are some key points to consider:

• Compare policies: Ensure that the new company offers the same level of coverage, with similar limits and deductibles to your existing insurer. A cheaper rate may be attractive, but it could cost you more in the long run if the level of protection is lower.
• Claims handling: How an insurer handles claims is a key indicator of their quality. Opt for a company that is available 24/7 and has a good reputation for customer service.
• Affordability: While price is important, it shouldn't be the only factor. A great rate might not be worth it if the company struggles with claims handling or has poor customer reviews.
• Continuous coverage: Some companies offer a discount if you have maintained continuous coverage with your previous insurer. This is something to consider when choosing a new provider and could help you save money.
• Cancellation fees: Ask your new company about any cancellation fees they may charge if you decide to switch again in the future.
• Customer complaints: Check for customer complaints about the company. This can give you an idea of their service quality and how they handle issues.
• Coverage options: Ensure that the new company offers all the coverage options you need, such as collision coverage, comprehensive insurance, liability insurance, uninsured motorist coverage, personal injury protection, and medical payments coverage.
• Financial strength: Check the financial strength of the company to ensure they are likely to pay out claims. You can look at financial ratings provided by agencies like AM Best.
• Independent reviews: Look at independent reviews and ratings from reputable sources, such as J.D. Power, the Better Business Bureau, and the National Association of Insurance Commissioners. These sources can provide valuable insights into the quality of the company's products and services.
• Ask for recommendations: Talk to friends, family, and colleagues about their experiences with different insurance providers. They can give you first-hand accounts of customer service, claims processing, and policy changes.

Remember, it's essential to do your research and compare multiple companies before making a decision. This will help ensure that you find the best policy to suit your needs and budget.

Frequently asked questions