Switch Your Car Insurance in 8 Easy Steps | Bankrate (2024)

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Updated Jun 05, 2024

Key takeaways

• If you’ve had a major life change, such as getting married or buying a new vehicle, you may want to consider switching car insurance companies.
• To avoid coverage lapses or overlaps in coverage that could put you at financial risk, you should start your new coverage on the same day that your old coverage ends.
• If you have an open claim with your current insurer, you probably won’t be able to change companies until the claim is paid and closed.

Switch your car insurance in 8 easy steps

If you are thinking of switching to a new provider, you may be wondering how to change car insurance companies. Here’s how to move forward:

1. Consider your coverage options

Although it is likely that your state has minimum car insurance requirements that you will need to meet, there are a number of decisions you may need to make regarding the amount of insurance you purchase. Minimum coverage, for example, could leave you exposed to potential out-of-pocket payments if you are found to be at fault in an expensive accident. Many insurance experts recommend that you purchase higher-than-minimum levels of coverage to be adequately protected.

Another consideration is the type of insurance you purchase. Minimum requirements often include only liability coverage, which pays for damage or injuries to the other driver and their passengers in an at-fault accident. If you have a newer car, or one with a loan or lease, you may need to buy optional collision and comprehensive insurance to cover repairs to your own vehicle. Loan and lease agreements typically require full coverage policies.cash purchases of new vehicles do not require full coverage, but it is highly recommended by insurance professionals.

On the other hand, if you drive an older car that has a minimal actual cash replacement value, you may not want to pay for full coverage, which includes collision and comprehensive.

Learn more: Common types of car insurance coverage

2. Check for potential penalties

When researching how to switch car insurance policies, check with your current insurer to see if there are any penalties involved in switching at any time other than renewal. If you switch at the end of your policy term, there is unlikely to be a penalty, but some carriers may include one if you decide to switch in the middle of your coverage period. If there is a penalty for switching in the middle of a coverage period, you may save money by waiting to cancel until your policy is up for renewal.

You may want to check with an agent or customer service representative to see what your insurer requires for canceling your policy. You may be eligible for the refund of a portion of your premium payment, or there may be requirements on the amount of time you need to give your insurer to process your cancellation.

3. Compare car insurance quotes from multiple carriers

If you have decided it’s a good time to change carriers, consider getting quotes from at least three auto insurers. This will allow you to compare auto policy premiums, coverage options and discounts you may be eligible for. Just make sure you are getting quotes for the same coverage types and limits, so you are comparing premiums evenly. Whether you are getting quotes online, by phone or at an agency, you’ll likely need to be prepared with some basic information:

• Address where the car will be stored
• Vehicle year, make and model
• Vehicle identification number (VIN)
• Driver’s license numbers for all drivers you need listed on the policy (auto insurers will use this information to review everyone’s motor vehicle record and any other personal factors that might affect your premium, such as your credit-based insurance score in some states)
• Social Security numbers for the policy owners (not all companies require this, but it is a common practice to ensure that the credit-based insurance score is matching up with the correct named insured)

Be sure to inquire about discounts that may be available to you as you research providers. Doing so could help you save on coverage in one or more ways.

Learn more: Average cost of car insurance

4. Contact your current carrier

Unless you are positive you want to switch to a new carrier, it may be worth your while to talk to an agent at your current company before switching. It is a car insurance myth that your rate is negotiable. However, an agent can review your policy and may identify new discounts for which you are eligible, or other savings opportunities that could lower your premium. With their help, you may be able to determine if you are over-insured, and potentially drop coverages that are not worth having for your vehicle.

If you handle your insurance needs through an independent agent, they may be able to help you find a new policy from another company. Unlike captive agents, who work for a single insurer, independent agents represent multiple companies. By explaining your circ*mstances to them, they may be able to find a company better suited to your needs and priorities.

Learn more: Best car insurance discounts

5. Research the new company

You may want to research an insurer thoroughly before purchasing a policy. Price isn’t the only factor to consider when shopping for car insurance. Reviewing other metrics can help ensure that you choose a carrier that fits all your needs, not just your budget. Some helpful resources include:

• Bankrate insurance company reviews: Bankrate’s editorial team analyzes average premiums, customer service scores, third-party financial strength ratings, available coverage options and discounts to determine which auto insurance companies to feature. In addition to our best overall company picks, we also looked at the best car insurance carriers in each state to help give you a better sense of what is available in your area and how much it might cost.
• The National Association of Insurance Commissioners (NAIC): This organization assigns a score to each company based on the average number of consumer complaints it receives. A score above 1.00 indicates an above-industry-average number of complaints, while below 1.00 indicates a below-industry-average number of complaints.
• J.D. Power: This company conducts studies from multiple angles, including overall customer satisfaction and claims satisfaction, and assigns a score to each car insurance company. Some of its rankings are also region-specific.
• AM Best: If you want to know more about a company’s financial strength, AM Best may be a good resource. AM Best rates companies with letter grades based on numerous financial measures, which can indicate a company’s historical ability to pay out claims. The higher a company’s AM Best rating, the more financially stable that company has historically been.

Although price is an important consideration, it is not the only factor you should consider when choosing an auto insurance company. Working with a licensed insurance professional may help you choose a carrier that fits your needs.

Learn more: How to choose the best car insurance company

6. Avoid a lapse in coverage

When making a switch to a new insurer, one of your most important tasks is to ensure that there is no lapse in coverage between the end of your former policy and the beginning of your new one. A lapse of even a single day could lead to negative consequences, since it might mean you would be driving illegally without coverage for a short period of time. If you were to have an at-fault accident during the lapse, you would be responsible for all costs out-of-pocket. Your new insurer might also charge you more in that case because you could be considered a high-risk driver.

Fortunately, it is not difficult to manage the timing of your policies. It can be helpful to ask for a statement in writing from your old company that includes the date the policy will end. Your new insurer should be able to begin your coverage on a date of your choosing, as long as you give them enough time to activate your coverage.

Learn more: Does a lapse in coverage affect your car insurance rates?

7. Make sure your old policy is canceled

If you are switching car insurance to a new insurer, do not assume that your existing policy is automatically canceled if you stop paying premiums. Most insurance experts recommend that you contact your agent or current carrier to cancel your policy when you are switching to a new car insurance company.

Follow these few steps to terminate your prior policy:

• Contact your agent or current insurance company and notify it that you are terminating your policy. This will prevent it from billing you for future coverage.
• If you signed up for automatic payments, you may need to log into an online account and cancel the auto-withdrawals. If you use your bank’s bill pay service to pay your premiums, be sure to stop the payments with your bank.
• Ask your agent or carrier to confirm the termination in writing.

Each insurance company has its own process for canceling policies. You may need to sign a form authorizing a cancellation, or you may need to call and speak directly with a company customer service representative. Your insurance agent can help you through the process.

Learn more: When and how to cancel your auto insurance policy

8. Access your new car insurance ID cards

Once you have officially canceled your old policy and started your new one, you’ll likely want to switch out your old insurance ID card for an updated one to keep in your vehicle or wallet. Your carrier will likely still send you a physical copy of your ID card, but many car insurance companies now also issue digital ID cards via email (you may want to verify if your state allows digital IDs, because not all states do). Or you may be able to access your new card on the mobile app. Either way, if you get stopped by law enforcement or are involved in an accident, you will need proof of coverage under your new auto insurance provider.

When to switch auto insurance companies

You can change your auto insurance provider at any time. That said, certain events could warrant the switch sooner than later, or signal that it’s time to start searching for a new carrier and getting quotes.

These circ*mstances include:

• Moving to a new location: Your insurance rate is impacted by your location. Even moving a few blocks away from your old location can impact your rate. Even if you are not switching carriers, it's a good idea to let your insurer know if you are moving to a new ZIP code, city or state.
• Adding a driver or car: Adding a new car can be a good time to look for quotes from insurers, and the same is true if you add a driver. If your teen child has just received their license, you will need to inform your insurer and are likely to see an increased rate. Some companies offer one or more discounts for young drivers, and you might want to consider switching companies to keep your rate as low as possible.
• Experiencing a life change: Every insurer has their own proprietary algorithms by which they determine car insurance rates, and factors such as your age, marital status and more can impact your rate in different ways with different companies. Even something like purchasing a new home may play a role, so you may benefit from shopping around during times of transition in your life.
• Approaching your renewal date: You should be able to switch car insurance at any time, but doing it during your renewal period can be advantageous, since it will enable you to avoid cancellation fees and start fresh with a new carrier. Just be sure you time the new policy to start the day the old policy expires to avoid gaps in coverage. Also, some insurers offer a discount if you switch carriers before the expiration of your current policy term.
• Seeing an increase in premiums: This will generally happen at a renewal, or if you make a change to your policy. If your premium increases, it may be a good time to see if another carrier can offer you a cheaper car insurance rate.
• Reviewing your options: If you’re happy with your company and premium, there’s really no need to shop for new auto insurance. If you are curious, though, there’s no harm in getting quotes from other providers. You may discover that another company offers much lower rates or offers policy features that your current carrier doesn’t. Simply getting quotes doesn’t have any adverse effects and doesn’t lock you into a new policy.

While switching carriers can have its advantages, there are also times when changing auto insurance providers may not be a good idea. If you recently filed a claim, for example, you likely will not be able to change carriers. If the claim has not been settled and paid, your new car insurance company may not have the opportunity to correctly rate your policy.

This could cause a large increase in your new policy’s premium at renewal. Or you could incur a retroactive charge to account for the increased risk that the new company was not aware of. In some instances, there may be a risk of policy cancellation for misrepresentation if you did not tell your new carrier about the outstanding claim.