Whether you are purchasing a new car, changing states, getting rid of your old car, or adding a new driver to your policy, you may be wondering if it is time to change your car insurance.
Shopping around for a new car insurance company can be a critical part of ensuring that you are getting the best possible coverage at the best possible price.
Luckily, changing insurance companies is not as difficult as it may seem, and can often be done entirely online.
So, how do I change my auto insurance? This post discusses everything you need to know about changing your auto insurance. Keep reading to learn more.
When to Switch Car Insurance Companies
Although you are free to switch your car insurance at any time, some events might mean you have no choice but to find a new insurance company. Typically, you may be forced to switch car insurance companies when you are:
- Moving to a new city or state: Your ZIP code, city or state can significantly impact your car insurance premium. So, if you are moving to a new area, you will likely have to find a new insurance company that offers coverage in your new location.
- Purchasing a new car: Your car insurance policy is specific to the make and model of your vehicle. So, if you buy a new car, you will need to find an insurance company that offers coverage for your new vehicle.
- Adding a new driver to your policy: Adding a new driver to your policy, whether it be a spouse, child or another family member, will usually require you to find a new insurance company. This is because each insurance company has different rules and rates for adding new drivers to a policy.
- Seeing an increase in your premiums: This usually happens at the time of your policy renewal. If you see a significant increase in your premiums, it may be time to start shopping around for a new car insurance company.
- Experiencing a life event: Life events such as getting married, divorced, getting a new job or buying a home can all impact your car insurance rates. So, if you experience any of these events, it may be time to update your existing car insurance policy or find a new one.
While switching car insurance companies can have its advantages, there are times when changing car insurance may not be the best option.
For example, if you have been with your current insurance company for a long time, you may be eligible for loyalty discounts not available to new customers.
Additionally, if you have a good driving record and no claims on your current policy, you may receive a discount when you renew your policy.
Therefore, before switching car insurance companies, do your research and compare rates to ensure you are getting the best possible deal.
How to Switch Auto Insurance Companies
If you have decided that it is time to switch car insurance companies, the process is relatively simple. In most cases, you can switch your car insurance entirely online. Follow the steps outlined below to change or cancel car insurance.
1. Shop Around
The first step in changing your car insurance is to shop around and compare rates from different companies.
There are several websites that allow you to enter your information and get quotes from multiple insurers.
Some of the most popular websites for comparison shopping include:
- The Zebra
- Compare.com
- InsuranceQuotes.com
Once you have a few quotes, compare the coverage and rates to find the best possible deal.
When shopping around, pay attention to auto insurance companies offering discounts applicable to you. The primary objective is to get the best coverage for the best price.
2. Purchase the Best Policy for Your Needs
The next step involves purchasing your new coverage policy. If your current car insurance policy expires soon, schedule your new policy to begin at least one or two days before the current policy expires.
This will help you to avoid any lapse in coverage. Remember that a slight lapse in your coverage – even just for a day – can lead to higher rates in the future since most insurance companies will consider you uninsured at that particular time.
In fact, it is much better to have two auto insurance policies for a day than to have none at all. If you are switching auto insurance companies in the middle of your coverage period, feel free to schedule the new coverage to begin whenever you like.
Remember to list your lender on the new policy if you have an auto loan or lease. In this case, the lender is the primary loss payee, meaning they get paid first should your car be stolen or totaled.
3. Get Proof of Insurance
The next step is to print out your insurance ID card or get proof of insurance from your new insurer.
In most states, you are required to have your insurance ID card in your car at all times. If you are caught without proof of valid insurance, you may be subject to a fine.
4. Cancel Your Current Policy
After you have found a new insurance company and purchased your policy, the next step is to cancel your current policy.
Most insurers will allow you to cancel your policy online. However, some may require you to call customer service to cancel.
If you are cancelling your policy before it expires, you may be entitled to a refund for the unused portion of your coverage.
However, most insurers will charge a cancellation fee, so make sure to factor that when determining if switching is worth it.
5. Inform Your Lender
Lastly, you need to inform your lender that you have switched insurance companies.
If you have an auto loan or lease, your lender likely requires you to carry full coverage car insurance. As a result, they need to be listed as the primary loss payee on your policy.
If you fail to inform them of a change in your policy, they may purchase insurance on your behalf, which can be very expensive.
Therefore, before switching car insurance companies, do your research and compare rates to ensure you are getting the best possible deal.
Frequently Asked Questions About Switching Car Insurance Companies
Below we answer some of the most frequently asked questions people have about switching car insurance companies.
How often should I switch car insurance companies?
You do not need to switch car insurance companies every year. In fact, switching companies too often can actually lead to higher rates since insurers will view you as a high-risk driver.
However, it is good to compare rates every few years to make sure you are still getting the best possible deal.
Can I get a refund if I switch car insurance companies mid-policy?
It depends. Some insurance companies will charge a cancellation fee, while others will refund you for the unused portion of your coverage. Make sure to check with your insurer before cancelling your policy.
What happens if I don’t inform my lender of my change in car insurance?
If you have an auto loan or lease, your lender likely requires you to carry full coverage car insurance.
As a result, they need to be listed as the primary loss payee on your policy. If you fail to inform them of a change in your policy, they may purchase insurance on your behalf, which can be very expensive.
Can I switch car insurance companies with an open claim?
Yes. As long as you have followed the correct process in filing the claim, your new insurer will take over the claim. However, if you are switching in the middle of a policy period, you may not be refunded for the unused portion of your coverage.
Is there a penalty for changing car insurance companies?
It depends with the insurance company that is currently insuring your car. Some companies will charge a cancellation fee, while others will not penalize you for switching.
However, if you cancel your policy before it expires, you may not be refunded for the unused portion of your coverage.
Final Thoughts
Auto insurance is a necessary evil for most drivers. Although it can be expensive, it’s essential to have the right policy in place to protect yourself financially in case of an accident.
Thankfully, there are ways to save money on your auto insurance without sacrificing coverage. By shopping around and purchasing the best policy for your needs, you can save hundreds (or even thousands) of dollars each year on your car insurance premiums.
If you find that your current auto insurer no longer meets your needs, don’t hesitate to switch companies. Cancelling your policy and informing your lender of the change is simple and can be done in just a few minutes.
