How To Switch Car Insurance

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations.

Nearly half (46%) of consumers made changes in how they managed their Car Insurance costs in 2020, according to the J.D. Power 2021 U.S. Insurance Shopping Study. Among those who made changes, 15% shopped for another Car Insurance company and 12% switched to a new insurer.

If your Car Insurance needs have changed or you simply want to shop around for cheap car insurance, here’s how to switch Car Insurance companies.

Reasons to Switch Car Insurance Companies

“It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options,” says Jon Bloom, vice president of product management at Erie Insurance.

Here are reasons that might merit a switch to a new insurer:

You had a bad claims experience. Usually we don’t know how good our Insurance company is until we make a claim. If you had an unsatisfactory claims experience, you may be looking to jump ship.

Your policy is up for renewal. As you reach the milestones of life, your Insurance needs will change. With this in mind, it’s wise to review your coverage before your current policy renews. If you think you’re overpaying, you may want to switch companies.

You are Buying a new Car. When you buy a new Car, you want to make sure that it has adequate coverage. For example, you may want gap insurance if you take out a Loan or lease, but not every company offers this coverage type.

You are moving. Where you live impacts the cost you pay for Car Insurance. But not all insurers price their coverage the same, which is why it’s a good idea to compare car insurance quotes from multiple insurers. And keep in mind, your current insurer might not offer coverage in your new location, so you may have no choice but to switch.

You are getting married. Most Insurance companies offer car insurance discounts for insuring multiple vehicles on one Car Insurance policy. If you and your spouse have different insurers, it might be the perfect opportunity to find an insurer that offers the best coverage and prices.

You have a teen driver. Adding a teen to your policy can increase your annual premium by more than $2,000. But not all insurers price teen drivers the same. That’s why it’s worth shopping around to find the best cheap car insurance for teen drivers.

You are retiring. When you retire, you can kiss the daily job commute goodbye. With fewer miles driven, you may want to look into a non-traditional type of Car Insurance like pay-per mile insurance.

Comparing Car Insurance Options

Since Insurance rates vary considerably among companies, one of the best ways to find the right policy is to compare car insurance quotes from multiple companies. When comparing quotes, pay attention to:

Coverage options, limits and deductibles. While price is an important factor, it’s not the only thing to look at. Do you need increased liability coverage in case of a lawsuit against you over an accident? Or is it time to drop collision and comprehensive coverage on your vehicle?

“When comparing new quotes to your current premium, make sure you are comparing ‘apples-to-apples,’” says Bloom at Erie. “Ensure that coverages are in line with the coverages you already have in place, so you don’t find yourself over or underinsured.”

Customer service and convenience. The best car insurance companies offer good service and a good price.

Switching to a New Insurance Company

When you’ve chosen a new company, you want the new policy to be in force before the previous policy is canceled. Insurers let you choose an effective date. For example, you can choose for your new policy to be effective immediately or another date in the future.

Once you confirm your new policy is effective, you can cancel your policy with your previous Insurance company. If you cancel a previous policy before a new policy is effective, you could run into some serious financial problems.

First, you won’t have coverage on your Car, which means if you get into an accident, you’ll be on the hook for any Car repair bills, property damage and medical expenses. Second, driving without Insurance is illegal in most states, which can result in fines and license suspension.

When you cancel a policy mid-term, you will likely get a pro-rated refund for the remainder.

Make sure to ask for a cancellation confirmation. This way, you can ensure your Auto Insurance policy doesn’t automatically renew.

Even after you’ve switched Car Insurance companies it’s a good idea to review your policy whenever it’s up for renewal. Reviewing coverage regularly will help you ensure you have the best policy for your needs and budget.

Compare Rates and Save on Your Auto Loan

Get up to 4 Loan offers in minutes at myAutoloan.com.