A Quick Guide to Switching Car Insurance

Last modified: April 17, 2021

If we believe insurers, the best way to keep our premiums low is by not claiming and not switching car insurance frequently. The reality is, however, that we have to keep our insurers on their toes.

You don’t have much control over whether you need to claim or not because accidents happen. You can, however, ensure that you get the best deal from your company. In this article, we’ll tell you what you need to know about switching car insurance and also how to switch car insurance. 

Common Reasons Why People are Switching Their Insurance Company

There are several reasons people consider switching car insurance mid-policy. 

Wanting a Better Deal

This is perhaps the most common reason that people have for reviewing their premiums. It’s a smart financial move because the insurance industry is so competitive. Insurers often tack on value-adds to improve the desirability of their product on an annual basis. 

Adding a New Driver  

It’s normal to consider switching car insurance companies when adding another driver. Insurers may also provide multi-person, so it can prove wise to cover all the family drivers under one premium. 

You’re Moving House

When moving, particularly to a new state, it’s imperative to compare all your insurance rates. The rules for insurers may vary substantially from one state to the following, and only select companies operate nationwide. In addition to the rates for auto insurance, you should also review your: 

Switching car insurance to another state may prove essential to maintaining adequate coverage. 

Big Life Events

You may be getting married, having children, or buying a new vehicle. These milestone events are all reasons that people choose to review their coverage to ensure that they have adequate protection. Switching car insurance to a new car may even become a milestone in itself. 

Your Renewal is Coming Up

The anniversary date of the policy is the ideal time to review the rate that you receive. Many policyholders shop around for new quotes just before renewal to encourage their current company to give them a better deal. 

Can I switch car insurance while I have an open claim?

Can I cancel my car insurance with an open claim?

Many people wonder, “Can you change car insurance during a claim?” The reason that changing companies may impact the outcome of the process. Legally speaking, as long as your cover was active when the accident occurred, you should still receive your payout. 

Can I switch insurance companies after an accident?

Some try switching car insurance after an accident or after a disappointing claim experience. It’s not usually advisable to do this, as you won’t receive optimal rates. 

Will my insurance go up after filing a claim?

Claims don’t automatically trigger an increase in your premium. Most carriers will consider your overall history first. In many cases, it’s only claimed over a certain amount that triggers changes. If your policy increases, it will do so upon its renewal date. 

How long do you have to wait to switch car insurance?

Another question that people often ask is, “Can you change your car insurance anytime?”

In most cases, you can as long as you give the company 30 days notice. Whether or not it’s beneficial to do so depends on the terms of your policy. Some firms impose stiff penalties for clients that cancel the contract a while before the renewal date. 

Check for the Potential Issues and Penalties

Some firms consider switching car insurance mid-policy a breach of contract. They may penalize you for making the change, especially if your renewal date is a long way off. The penalties typically constitute a percentage of the amount you would have paid had you stuck with the same firm. 

When signing up for a new policy, always ask, “Is there a penalty for switching car insurance?” If there is, you’ll need to factor that into the cost-benefit analysis before canceling. 

What to do Before Making a Switch

Compare the Insurers

You must get quotes from several companies to ensure that you’re getting the best possible deal. To make this task simpler, you can use a comparison site. You’ll need to provide the following:

  • Vehicle information
  • Address
  • Names of insured drivers
  • Details of your driving history

Get the quotes in writing, and compare them to your current policy. 

Research the Company

Make sure that the firm is reliable and financially sound before making the change. Read reviews on trusted sites such as the Better Business Bureau. Also, check the customer complaint ratio. A high complaint ratio is a warning flag. 

There’s no point in choosing the cheapest option if they make claiming difficult or provide bad customer service. 

Talk to Your Insurer

The threat of you changing insurance companies before renewal is a powerful bargaining chip. Forward the best quote that you received and see if your insurer can match or better it. They may be willing to add extra benefits or reduce your premium. Just make sure that any additional services are worthwhile for you. 

Change out your ID Cards

Another common question is, “How long do I have to change my car insurance ID cards?” The answer is that you must always keep a copy of the active card on hand when driving. Not doing so could land you in trouble with the law.

Make Sure Your Old Policy is Canceled

Get confirmation in writing that you’ve given the notice to cancel and that the company acknowledges receipt. This provides you with an exact date for when your cover ceases and also prevents disputes later. 

Avoid a Lapse

One of the risks of changing insurance companies is the potential for gaps in coverage. To avoid a potential lapse in insurance coverage, make sure that your new insurance covers you from the day your old policy expires. 

What happens if my car insurance lapses?

Some states require that the insurer report lapses. If you don’t replace the lapsed policy, the state may suspend your driver’s license. Should you be involved in an accident, you could face severe financial consequences. 

What to do if you have an Insurance Lapse

It’s possible to make a mistake. If you’re in this position, fix the error as quickly as possible by taking out new cover. 

Is it bad to switch car insurance companies frequently?

Reviewing your policies annually makes sense as your circumstances change. Perhaps you’ve improved the security of your home, your credit, or your driving skills. These changes can reduce the overall amount you pay. 

To answer the question, “Is it bad to switch insurance companies often?” is complex. It largely depends on whether you have to pay a termination fee and what service you can expect. Before asking, “ Does Geico have a cancellation fee?” or “Does Progressive charge a cancellation fee, research the service the new company provides. Paying a slightly higher premium may prove worthwhile for a hassle-free claim experience. It may also pay to build up a good history with one company, although this is becoming less important as insurance evolves. 

How to Switch the Insurance to a New Car

Would you like to stay with the same insurer but learn how to switch car insurance to a new car? It’s straightforward: 

  • Contact your carrier and provide them with the new details
  • They’ll consider your history with the company and put the policy through the underwriting process
  • After that, it’s up to you to accept the latest premium and cover. Termination fees won’t typically apply here because you’re staying with the same provider. 

Final Thoughts

Now that you know how to switch car insurance, it’s time to put that knowledge to good use. Check how long it is before your policy comes up for renewal, and start shopping around. If you can find a better deal, contact your insurer and see if they’ll make a counter-offer. 

If they don’t budge, check on whether or not there are penalties to terminate the contract. Customer loyalty is an admirable trait, but businesses must earn your support.

FAQs

Can you switch car insurance at any time?

Yes, you may if you give the insurer adequate notice. Be careful to ensure that the new policy covers you from the day the old one stops to avoid coverage gaps. 

Is it bad to switch auto insurance companies?

No, not necessarily. The most damaging effect is that you may lose your no-claims bonus. However, when you weigh that up against the potential savings or better coverage, it may prove worthwhile. 

Does switching car insurance affect credit?

When you apply, it will appear as a soft pull on your credit history. This can impact your credit slightly in the short term. The impact is, however, negligible. 

Can car insurance be transferred?

You can technically transfer your policy from one car to the next. However, the underwriters will still have to gauge the risks, so your premiums might change. You may also transfer the insurance to the new owner when you sell your vehicle. 

How do I transfer my old car insurance to my new car?

Contact your carrier and inform them of the change. They’ll explain what steps you must take. You’ll typically confirm your details and submit proof of ownership, address, and so forth.

Can I transfer car insurance online?

Yes, most insurers allow you to complete the application online. They may courier the final documents for signature but will often ask that you digitally sign them instead. You’ll need to check if this is possible on the company website.