How to switch car insurance

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

Andrew Hurst

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Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

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.

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Ian Bloom, CFP®, RLP®

Ian Bloom, CFP®, RLP®

Certified Financial Planner

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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Before you renew your coverage, it's a good idea to consider switching your car insurance —  especially if you've had a major life event. By changing your auto insurance, you could get a cheaper policy, find coverage that better suits your needs, or get covered by a company with better customer service than your current provider.

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It's easy to switch your car insurance. To change insurance companies, all you have to do is compare auto insurers to find the company with the best rates, coverage options, and service near you.

Then, once you get a new policy, cancel your old car insurance — even if you're in the middle of your policy. Remember, make sure to set your old policy to end on the same day your new one starts — that way you avoid any lapse in coverage.

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 steps

It's easy to switch your car insurance. 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 cheaper rates or car insurance that comes with more add-ons. Knowing what you want to improve before you switch can help you pick the best car insurance for you.

  2. Shop around: When you decide what you want out of 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.

  3. Contact your current insurance company: After you decide to switch, let your 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.

  4. Pick the best insurance policy: When you're sure you want to switch your car insurance coverage, get coverage from the best insurance company. Make sure you receive your new proof of insurance card or digital ID, too.

  5. Cancel your old insurance coverage: You shouldn't cancel your insurance coverage before you buy a new policy. Otherwise, you risk a lapse in coverage and 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 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.

What are the reasons for switching car insurance?

You should consider switching car insurance when it's time to renew your policy or if you have any life changes. Changes to your driving profile can influence the amount you pay for auto insurance, and could make your car insurance more (or less) expensive. 

If any of the following details about your life changed since you last bought car insurance or renewed your policy, consider changing your auto insurance to make sure you’re still getting the cheapest rates:

  • You moved

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

  • You bought a new 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 one company might be cheaper than competitors.

What are the risks of changing insurance companies?

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

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

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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.

Expert reviewer

Certified Financial Planner

Ian Bloom, CFP®, RLP®

Certified Financial Planner

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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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