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How to switch car insurance

Switching your car insurance isn't difficult, and you could save money by changing companies.

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By

Andrew HurstAndrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Edited by

Anna SwartzAnna SwartzSenior Managing Editor & Auto Insurance ExpertAnna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.
Expert reviewedExpert reviewedThis article has been reviewed by a licensed Policygenius expert to ensure that sources, statistics, and claims meet our standard for accurate and unbiased advice.Learn more about oureditorial review process.

By

Ian Bloom, CFP®, RLP®Ian Bloom, CFP®, RLP®Certified Financial PlannerIan Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

Updated|5 min read

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You can switch car insurance companies at any time — and it's actually a good idea to re-shop regularly, especially when your policy is up for renewal. Switching auto insurance companies means the opportunity to find a cheaper policy, pick coverage that better suits your needs, or choose a carrier with better customer service than your current provider.

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To change insurance companies, all you have to do is follow a few simple steps to compare auto insurers and find the company with the best rates, coverage options, and service near you.

Key takeaways

  • It's always a good idea to consider switching your car insurance coverage before you renew an existing policy, since you could get lower rates or better coverage by making a change.

  • If you bought a new car, house, or experienced another major life event since you last got coverage, it's even more important that you think about changing your insurance protection.

  • You can switch your car insurance at any time, even if you're in the middle of an existing current policy.

  • Remember to end your old policy on the same day your new one starts, so you don’t have a coverage gap.

How to switch your car insurance in 6 easy steps

It's easy to switch your car insurance at any time, even if you're in the middle of your current policy. When you decide that switching car insurance companies may be right for you, follow these steps:

1. Know what you want to change

Before you switch car insurance companies, have an idea of what you want out of a new policy. For example, you may want to save money with cheaper rates, or need a certain kind of coverage that your current car insurance company doesn't offer. Knowing what you want to improve before you switch can help you pick the best car insurance for you.

2. Shop around and compare quotes

When you decide what you're looking for in a new car insurance company, compare multiple companies to decide which one best lines up with your needs. If you're not sure where to start, Policygenius can help you see what you'll pay with top insurance companies, so you can choose the policy that works best for you.

3. Contact your current insurance company

After you decide to switch, let your current insurance company know. If you want more affordable coverage, there's a chance that your insurer could match a cheaper quote you received. You could also ask about potential cancellation fees or a refund if you prepaid and you're canceling mid-policy.

4. Pick the best car insurance quote

If you're sure you want to switch car insurance companies, take a look at the quotes you've gotten and pick the best insurance company for you. It may be the cheapest quote — if affordability is your primary concern — but be sure to read company reviews before you make a final choice. Once you pick a company, you'll finalize the policy, choose a start date, and make your first payment. Make sure you receive your new proof of insurance card or digital ID, too.

5. Cancel your old insurance coverage

Don't cancel your current car insurance coverage before you buy a new policy. Otherwise, you risk a lapse in coverage (which means more expensive rates in the future). Your cancellation date should be the same day as your new policy's start date. When you cancel your existing auto insurance with time still left, your insurer may refund you for the rest of your policy's term, minus any fees.

6. Let your lessor or lender know about your switch

If you have a car loan or lease, you should let your lender or lessor know about your new insurance coverage as soon as possible. They can update your loan or lease agreement with the name of your new insurance provider.

When is it a good idea to switch car insurance companies?

You don't have to wait for your car insurance policy to end, you can switch car insurance companies anytime you want. But it's a good idea to re-shop every time your car insurance policy is up for renewal, since you may be able to switch and save money.

It's also a good idea to switch car insurance companies if any details about you, your car, or your household have changed, since those details all affect what you pay for car insurance.

  • You moved to a new address

  • Someone living in your home got their driver's license

  • You bought a new car

  • You got rid of a car

  • You got into an accident

  • You received a traffic ticket or a DUI

  • Your car was stolen or damaged and you had to make a claim

  • Your credit score charged

While your car insurance rates could get more expensive depending on how you were affected by any of these changes, every insurance company sets its prices differently. 

This means that even if your rates with your current company are going up at renewal, you could still get relatively affordable car insurance coverage by finding the best deal and changing insurance companies.

You may miss out on cheaper auto insurance by automatically renewing coverage instead of considering switching your insurance. For example, if your credit score improved or if you bought a house, the rates you get from a new company might be cheaper than your current one.

Is switching car insurance ever bad?

No, there aren't many risks to changing insurance companies. Even if you switch car insurance every year, insurers won't penalize you with higher rates or make it difficult for you to get covered. That said, there are a couple of times when switching your car insurance isn't the best idea.

Generally, it might not be worth it to change your auto insurance if you won't actually save much money by switching companies.

For example, you might reconsider switching insurance if you'll have to pay a cancellation fee that's larger than the amount you'd save by switching. You may also not want to switch your car insurance if it means missing out on the loyalty discounts that many insurers offer to renewing drivers. 

Can you switch car insurance at any time?

Yes — if you're unsatisfied with your current policy, you can switch your car insurance at any time. Even if you're in the middle of your policy or it's months before your renewal date, you can still change your insurance company.

If you've already paid off your entire premium but want to switch, your insurer will typically refund you the cost of the rest of your policy, minus any fees.

You can decide to cancel your car insurance and switch to another company at any time, but if you have an open claim or have just had an accident, you should consider waiting. Your premiums won't increase in the middle of your policy's tenure.

But if you switch right after an accident, you will see higher than average costs of coverage much sooner than if you had waited until the end of your policy's lifetime. 

How is canceling your car insurance different from switching car insurance? 

Canceling your car insurance is different from switching coverage. While you'll eventually have to cancel your existing policy if you decide to switch car insurance, you won't cancel until you purchase new auto insurance coverage. Otherwise, you'll be uninsured and your record will show a lapse in coverage.

Frequently Asked Questions

Are there any penalties for canceling car insurance?

There are no penalties for canceling your car insurance coverage, as long as you don't go uninsured. It's best not to cancel a car insurance policy until your new policy starts. You risk fines and other legal penalties if you drive without insurance coverage. Additionally, you could see higher rates once you reinstate your canceled coverage in the future. However, you don't have to worry about avoiding a coverage lapse when you cancel a policy if you don't plan to drive again.

Is it bad to switch insurance companies often?

You can switch car insurance companies as often as you want, but because of the termination fees that could add up, you probably don't want to switch your car insurance every month. Still, you should at least be open to switching when it's time to renew your policy.

Does changing car insurance affect credit score?

Changing your car insurance doesn't affect your credit score. Since insurance companies don't report to credit bureaus and only perform soft inquiries when you request quotes, there is no impact to your credit score that comes from comparing insurance coverage options and switching to a different company.

Does it cost anything to switch car insurance?

It depends on the company. Some insurance providers charge policyholders who switch car insurance companies a fee when they end their coverage early. The fee that insurers charge may be a dollar amount or a percentage of your policy.

Author

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Editor

Anna Swartz is a senior managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.

Expert reviewer

Ian Bloom, CFP®, RLP®, is a certified financial planner and a member of the Financial Review Council at Policygenius. Previously, he was a financial advisor at MetLife and MassMutual.

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