Switching Auto Insurance Carriers: A Step-By-Step Guide

There are many reasons why you might want to switch auto insurance carriers, from poor customer service to a recent move. Whatever your reason, it's important to make sure there's no gap in your coverage and that you cancel your previous policy. It's also a good idea to compare rates from at least three different insurers to make sure you're getting the best deal.

Compare quotes from multiple carriers

Comparing quotes from multiple carriers is a crucial step in switching auto insurance. Here are some detailed tips to help you through the process:

Understand Your Coverage Needs

Before reaching out for quotes, it's essential to have a clear understanding of your coverage needs. Consider factors such as the age of your vehicle, loan or lease requirements, and your desired level of protection. For example, if you have a newer car or one with a loan, you may need collision and comprehensive insurance. On the other hand, if your car is older, you might opt for minimum coverage to save on premiums. Knowing what coverages you want will help you make accurate comparisons when requesting quotes.

Gather the Necessary Information

When requesting quotes, be prepared to provide basic information such as your address, vehicle details (year, make, model, Vehicle Identification Number), driver's license numbers, and Social Security numbers for policy owners. Having this information readily available will streamline the quote process and ensure more accurate estimates.

Use Comparison Tools and Sites

Take advantage of comparison tools and websites that allow you to input your information once and receive quotes from multiple carriers. These tools save you time and provide a convenient way to view a range of options side by side. Examples of such tools include Progressive's AutoQuote Explorer® and The Zebra, which compares over 100 insurance companies.

Compare Rates and Coverages

When evaluating quotes, ensure that you are comparing the same types and levels of coverage across different carriers. Pay attention to factors such as premiums, coverage limits, and deductibles. A lower rate might indicate less coverage, so it's crucial to verify that the quotes you're comparing are for equivalent policies.

Research Customer Service and Reputation

In addition to price, consider the customer service and reputation of the carriers you're evaluating. Look for companies with strong reviews and ratings for their claims handling and overall customer satisfaction. You can refer to resources like J.D. Power studies, Better Business Bureau scores, and the National Association of Insurance Commissioners' complaint index.

Inquire About Discounts

Don't forget to ask about potential discounts when comparing carriers. Many insurance companies offer a variety of discounts, such as good driver discounts, student discounts, bundling discounts (e.g., home and auto insurance), and more. Finding out what discounts you're eligible for can help you maximize your savings.

Get Quotes from at Least Three Carriers

It's recommended to get quotes from at least three auto insurance carriers to have a good range of options for comparison. This will allow you to assess not only the premiums but also the coverage options and discounts offered by different companies.

By following these steps, you'll be able to make a well-informed decision when choosing a new auto insurance carrier that meets your coverage needs and budget.

Research the new company

Researching a new auto insurance company is an important step in switching providers. You want to ensure that the company is financially stable, has good customer satisfaction, and offers the type of coverage you need. Here are some detailed steps to help you research your new auto insurance company:

Check Financial Stability:

Start by evaluating the financial stability of the auto insurance company. You can visit the websites of insurance rating organizations such as AM Best, Fitch, and Standard & Poor's. These organizations assess the financial reserves, credit rating, and corporate financial strength of insurance companies. Look for ratings of A+, A, or A-, indicating excellent financial condition.

Assess Customer Satisfaction:

The next step is to research customer satisfaction ratings. JD Power and Associates conduct annual surveys to evaluate consumer satisfaction with insurance companies' customer service, claims processing, rates, and responsiveness to their needs. You can also check the Better Business Bureau (BBB) for insights. The BBB certifies companies committed to resolving customer problems and providing excellent service. Additionally, your state insurance website may provide valuable information about consumer complaints and lawsuits against auto insurance companies operating in your state.

Compare Insurance Companies:

Utilize insurance comparison websites to get quotes from multiple companies at once. These sites also often feature consumer forums where users discuss their experiences, problems, and recommendations. This can give you a first-hand account of how the insurance company handles claims and customer service.

Understand Coverage Options:

Different insurance companies offer varying coverage options and add-ons. It is essential to understand what is included in the policy and what may be excluded. For example, some companies may not offer rideshare insurance in all states, while others provide additional perks like new car replacement coverage or gap insurance. Ensure that the company offers the coverage you need at a competitive rate.

Research Company History and Philosophy:

Take some time to visit the insurance company's website and learn about their history, customer service philosophy, and corporate structure. This can give you insights into their values and how they handle customer interactions.

Compare Rates:

Finally, compare rates from multiple companies to ensure you are getting a good deal. Remember that the cheapest option may not always be the best, as you also want to consider the company's financial stability, customer satisfaction, and coverage options.

By following these steps, you can make an informed decision about your new auto insurance company, ensuring that they meet your coverage needs, have a strong financial standing, and provide satisfactory customer service.

Avoid a lapse in coverage

When switching auto insurance carriers, it's crucial to avoid a lapse in coverage to prevent negative consequences. Here are some detailed instructions to help you achieve that:

Understand the Importance of Continuous Coverage:

A lapse in auto insurance coverage, even for a single day, can have significant ramifications. If you are involved in an accident during the lapse, you will be responsible for all costs out of pocket. Additionally, your new insurer may consider you a high-risk driver and charge you higher premiums.

Coordinate the Timing:

To avoid a lapse, ensure that your new insurance policy starts on the same day your old policy ends. Contact your old insurance company and request a statement in writing that confirms the date your old policy will end. Then, set the start date for your new policy accordingly, allowing enough time for the new insurer to activate your coverage.

Confirm the Cancellation of Your Old Policy:

Don't assume that stopping payments will automatically cancel your old policy. Contact your agent or insurance company to officially cancel your previous coverage. Follow their specific cancellation process, which may include signing a form or making a direct request.

Be Mindful of Open Claims:

If you have any open claims with your current insurer, it's best to wait until they are resolved before switching carriers. Changing insurance companies while a claim is still active can result in higher premiums or retroactive charges. It may also be challenging to find a new insurer willing to accept new customers with open claims.

Maintain Continuous Coverage During Life Transitions:

Life changes, such as moving, getting married, or retiring, can impact your insurance needs and costs. If you're planning a significant life transition, review your coverage options and make any necessary adjustments to ensure continuous coverage. This may include adding or removing drivers, changing your vehicle, or adjusting your policy limits.

Consider Suspending Coverage Temporarily:

If you won't be driving for an extended period, ask your insurance agent or company about suspending your coverage temporarily instead of cancelling it. This option can be especially useful if you're travelling, deployed by the military, or in between cars.

By following these steps and staying vigilant about maintaining continuous coverage, you can effectively avoid a lapse in auto insurance when switching carriers.

Cancel your previous insurance

Once you have your new insurance policy in place, you can begin the process of cancelling your old one. It is important to remember that you will still need to notify your old insurance company of the cancellation, as your new insurance company cannot do this on your behalf. You will need to contact your old insurance company and inform them of your cancellation date. This should be done at at least one day after your new policy begins to avoid a lapse in coverage. You may also need to provide your old insurance company with information about your new policy, including the policy number, provider and effective date.

When you cancel your old insurance policy, you may be entitled to a refund for any premium payments you have made in advance. This will be a prorated refund for the remaining time on your policy, minus any cancellation fee that your insurer may charge. You should also remember to cancel any automatic payments you have set up for your old insurance policy, to prevent being charged further.

Your old insurance company will still be responsible for handling any open claims you have. If you have an open claim, you can still cancel your policy as long as the policy was active when the incident that caused the claim occurred. However, the claim will stay with your old insurance company until it is resolved.

Get proof of insurance

Getting proof of insurance is a crucial step when switching auto insurance carriers. Here are some detailed instructions to help you obtain proof of insurance:

Understand the Importance of Proof of Insurance:

It is essential to have valid proof of insurance when driving. Most states require drivers to have auto insurance, and you may face legal consequences for driving without it. Proof of insurance demonstrates that you have the financial means to cover any potential damages or injuries caused in an accident.

Know What Constitutes as Proof of Insurance:

Typically, your insurance provider will issue an insurance ID card or proof of insurance card. This card contains essential information, including your name, policy number, effective dates of coverage, and the insurance company's contact information. This card serves as official documentation of your insurance coverage.

Obtain Your Insurance ID Card:

Once you have purchased your new insurance policy, contact your insurance provider to obtain your insurance ID card. They may provide it to you via fax, email, or through their mobile app. Some companies also offer the option to download a digital ID card and store it on your smartphone. Alternatively, they may send you a physical copy of the card in the mail.

Keep Your Insurance ID Card Accessible:

It is important to always keep your insurance ID card with you when driving. You may need to present it to law enforcement or in the event of an accident. If you have a digital ID card, make sure it is easily accessible on your phone, even without an internet connection. If you receive a physical copy, keep it in your vehicle or wallet.

Update Your Lender or Leasing Company:

If you have a car loan or lease, remember to notify your lender or leasing company about the change in insurance. They may require you to have a certain level of insurance coverage, such as comprehensive and collision insurance. Provide them with the details of your new insurance policy to ensure they have the most up-to-date information.

Be Aware of State-Specific Requirements:

Note that the requirements for proof of insurance may vary slightly from state to state. While most states accept digital ID cards, some may only accept physical copies. Check your state's specific regulations to ensure you comply with the law.

Store Your Previous Insurance Information:

Even after switching insurance carriers, it is a good idea to keep the information of your previous policy for a while. This includes the policy number, coverage dates, and any relevant claims. This information may be necessary for tax purposes or if you need to refer to any past incidents or issues.

Review Your New Insurance Policy Carefully:

Before considering your switch complete, take the time to thoroughly review your new insurance policy. Ensure that all the details are accurate, including your personal information, vehicle information, coverage limits, and deductibles. This will help prevent any surprises or issues in the future.

Frequently asked questions