How to Switch Car Insurance: 5 Easy Steps (2022 Guide) – MarketWatchJune 11, 2022
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You can change your car insurance at any time, whether you’ve had your current policy for a few weeks or a few years. In this article, we’ll cover how to switch car insurance in five steps and talk about the reasons you might want to make a change.
The best car insurance company for your neighbor isn’t necessarily the best option for you, so it pays to compare car insurance quotes between multiple providers.
Switching car insurance companies can lead to a lower monthly payment. You may want to shop around and switch if:
The common thread that ties all of these situations together is that something in your driving profile changed. Car insurance companies look at a variety of factors, and even moving one zip code over can affect your rates.
Each car insurance company has a formula for calculating rates based on many of these factors. For instance, while you might have a cheap provider when it’s just you on the policy, other companies may offer better rates once you get married.
Beyond price, you might want to consider switching car insurance if you had an unpleasant experience filing an insurance claim with your current provider. Almost every state requires drivers to have insurance, but that doesn’t mean you have to put up with poor service.
You can switch car insurance companies at any time. This includes the day you start coverage and even when you have certain open claims. You also won’t be penalized for switching multiple times in one year.
We recommend shopping around for coverage at least once per policy term to make sure you have the best price. Beyond that, it’s a good idea to consider a switch if your life situation changes in one of the ways described above.
Shop for rates if you are thinking of changing your coverage amounts, as well. Some providers are cheaper for minimum liability car insurance, while others offer cheaper full coverage rates.
While you can switch car insurance at any time, that doesn’t mean every time is the best time. Be aware that some car insurance companies give discounts based on how long you’ve had a policy with your provider. So, if you switch companies after a month, you won’t be eligible for a loyalty discount.
Check with your car insurance company to see if it charges a cancellation fee within a certain timeframe. Most companies let you cancel without any fees, but this isn’t always the case. You might want to wait until your policy expires to avoid any fees.
Also, it’s best not to switch your car insurance company while you have an open at-fault claim. While you’re allowed to do this, your rates can increase to account for the cost of the claim once it’s settled or at your next policy term. If you have to switch during a claim, make sure you are completely honest about it with your new provider, as leaving anything out could result in even higher rates.
Switching car insurance companies is easy, and people do it all the time. However, it’s a good idea to talk with your current insurer and see if there are any cancellation fees. If your insurance agent finds out you want to cancel, they may also offer to search for extra discounts or give you a lower rate.
When you are ready to start looking for new coverage, here’s what to do.
The first step to switching car insurance companies is to shop around to find a better rate. We recommend comparing rates from at least three providers. An easy way to do this is to use a quote comparison tool. This way, you only have to enter your information one time to see many different options.
When you are shopping around, consider providers that have car insurance discounts applicable to you. For example, State Farm has a student discount of up to 25%, which is better than any other top provider’s student discount. Also, consider usage-based or pay-per-mile programs if you want to save money according to your current driving habits.
Once you’ve identified a few favorite providers, research each company to learn about its customer service and claims experience. We recommend looking at studies by J.D. Power like the 2020 U.S Auto Claims Satisfaction StudySM and the 2021 Auto Insurance StudySM. You can also check out online scores by the Better Business Bureau and financial ratings by AM Best.
The next step is to purchase the new plan. If your current auto insurance policy is going to expire soon, schedule the new policy to begin at least one day before your current coverage expires.
Doing this will avoid a lapse in coverage. A gap of as little as one day can increase your car insurance rates in the future, since insurance companies consider you an uninsured driver for that time. It’s much better to have two car insurance policies for one day than none at all.
If you are switching companies in the middle of a policy period, simply schedule the new coverage to begin whenever you would like.
Remember to list your lender on your new policy if you have a loan or lease. The lender is a loss payee, which means that it gets paid first when your car is totaled if you still owe money. You’ll need to get full coverage insurance, which includes collision insurance and comprehensive insurance, if you have an auto loan.
Once you have your new insurance coverage in place, it’s time to start the cancellation process for your old policy. If you have any open claims, be aware that your old company will still be responsible for investigating and closing out those claims.
Call your company and speak to an agent to cancel your coverage at least one day after your new policy begins. You can schedule an effective cancellation date so you don’t have to remember to call on that specific day. However, don’t just stop paying for your old car insurance policy without officially canceling it.
If you paid for your policy in full at the start of a period, you should get a refund for the unused portion of that period. You might also get a small refund if you paid monthly.
The next step is to print out your insurance ID card or download an app to access it. Most states allow you to show a digital ID card if you get pulled over. However, make sure to save it locally for offline access so you can get to it whether you have cellular service or not.
Lastly, if you have a car loan or lease, you will need to inform the lender right away of your new insurance coverage. Your lender was listed on your old car insurance, which means your old company notifies your lender of the cancellation. You should have listed your lender on the new car insurance policy as well, but it’s also a good idea to call the lender right away to make sure it has all the details of your new coverage.
While it takes time to find the best rate and switch your car insurance company, it can be worth it in the long run. Enter your ZIP code below to quickly compare rates from multiple providers in your area.
After comparing all top car insurance companies on the market today, we ranked Geico as the best option overall for its combination of customer service, coverage and affordability. Geico offers all of the standard coverage options plus a number of extras, including:
Geico has 16 different insurance discounts, which means there are many ways to save. The company also offers a usage-based program called DriveEasy that is available in 24 states. Finally, our cost estimates show Geico to be one of the cheapest car insurance companies in the country, depending on your driving profile.
Learn more in our full Geico car insurance review.
State Farm can be a great option for car insurance if you are a student or have an accident on your driving record. According to our cost estimates, State Farm has some of the cheapest rates for young drivers and drivers with recent at-fault accidents. Extra coverage options from State Farm include rideshare insurance, roadside assistance and travel expense coverage.
Drivers can use the Drive Safe & SaveTM program to save money based on their driving habits, and young drivers can participate in Steer Clear® for extra discounts. State Farm is the largest car insurance provider in the country and has an A++ financial rating from AM Best, so you know your claims will be paid out responsibly.
Learn more in our full State Farm car insurance review.
Yes, you can switch car insurance companies at any time. Be sure to find out if any cancellation fees apply before ending your coverage.
To switch car insurance providers, compare car insurance quotes and choose the best option for your current situation. Then, start your new coverage and overlap it by at least one day with your old coverage. Finally, cancel your old plan and let your lender know about your new coverage, if applicable.
No, switching car insurance policies is not bad. There’s no penalty for switching, as long as you maintain continuous coverage and avoid a lapse.
Transferring car insurance is the same as switching between companies. Simply choose the same coverage amounts that you currently have, start a policy with a new car insurance company and cancel the old one.
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
In this article, we selected companies with high overall ratings and cost ratings. The cost ratings were informed by auto insurance rate estimates generated by Quadrant Information Services and discount opportunities.
*Data accurate at time of publication.
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