TL;DR: Changing auto insurance companies is easy if you follow a few key steps. Compare quotes, line up a new policy before canceling your current one, and avoid any lapse in coverage. Always notify your old insurer once you have new coverage in place. And for personalized guidance on switching, call Insure on the Spot at 773-202-5060.
If you’re considering switching your car insurance, here are the top five tips to ensure a smooth transition:
Review your current policy and coverage needs.
If you’re wondering how you can prepare before switching car insurance companies, just take a close look at your existing auto insurance policy. Identify your coverage types, limits, deductibles, and current premiums. This helps you know what coverage you must maintain with a new insurer so you don’t end up underinsured. Check your policy’s terms for any cancellation requirements or fees. Many insurers allow you to cancel at any time, and if you’ve paid ahead, you’ll typically get a pro-rated refund for the unused period. However, some companies might charge a small cancellation fee if you cancel mid-term (often a percentage of the unused premium). It’s worth calling your current insurer to ask about any penalties or notice required to cancel. This way, you can decide if it makes financial sense to switch now or wait until your policy is up for renewal.
Should I ask my current insurer to price-match a better quote? It doesn’t hurt to talk to your current insurance provider before leaving. While insurers typically won’t directly price-match a competitor, they might offer loyalty discounts or review your coverage to see if you’re paying for something unnecessary. For example, if your situation changed (you moved, got married, or your credit improved), your existing insurer might adjust your premium. Even with any adjustments, another company may offer better coverage or customer service that your current insurer can’t match.
Shop around and get quotes from multiple insurers.
Another common question drivers ask is how to compare quotes to find the best new auto insurance policy. It’s quite simple. Take out time to request quotes from at least three different insurance companies (or use an independent agent to collect quotes for you). When comparing, make sure coverage levels and deductibles are the same across quotes. For instance, if you currently carry 100/300/50 liability limits and collision with a $500 deductible, get quotes with those exact numbers. This apples-to-apples comparison ensures any price differences aren’t due to lower coverage. Look beyond just the monthly premium and consider what each policy includes. Does a cheaper quote skimp on important coverage like uninsured motorists or roadside assistance? Balance cost with value.
While you’re gathering quotes, ask about available discounts too. Many insurers offer discounts for things like a good driving record, bundling auto with home insurance, having safety features on your car, or even being a safe driver through telematics programs. These discounts can vary widely by company. Also research each prospective insurer’s reputation for customer service and claims handling. You can read customer reviews and check ratings from independent agencies (like J.D. Power or A.M. Best) to gauge satisfaction and financial stability.
Edge-Case: Can I switch insurance companies with an open claim? You can change insurers even if you currently have a claim in process with your old company. Your former insurer is still obligated to handle that claim since it occurred under your policy with them. However, be aware that switching during an active claim can be a bit of a juggling act. You’ll need to stay on top of communication with the old insurer until the claim is resolved. There’s also a chance the new insurer might consider your recent claim when calculating your rate. While an open claim doesn’t legally prevent you from switching, you might choose to wait until the claim is closed to keep things simpler.
Time your switch so there’s no gap in coverage.
A lapse in car insurance, even for a day, can have serious consequences. If you were to have an accident during a gap between policies, you’d be driving without insurance, meaning you’d personally be on the hook for damages and could face fines for being uninsured. Additionally, insurance companies view a recent lapse as a red flag; drivers with gaps in coverage can be deemed high-risk, which might raise your new premium. To avoid this, schedule your new policy to start before or on the same day your old policy is canceled. Ideally, overlap them by a day or so. For example, if your old policy ends on June 30, have your new policy begin June 29 or 30. It’s better to double-pay one day than to risk even a brief lapse.
When you purchase the new policy, you can usually choose the effective start date. Set it and confirm with the new insurer that your coverage is bound from that date. Then, contact your old insurer and schedule the cancellation for the day after your new policy starts (or the same day, timing it exactly). Get confirmation of the end date in writing from your old company. That way, you have proof of continuous insurance if there’s ever a question.
Edge-Case: Can I change car insurance at any time? You have the right to cancel your policy mid-term if you find a better deal or another reason to change. Just remember to check for any early cancellation fee and make sure you already have new insurance in effect so you’re never uninsured. Many people prefer to switch at renewal time simply to avoid potential fees or prorated refunds, but it’s not a requirement. As long as you follow the proper procedure (new policy in place, then cancel old), you can change providers whenever it makes sense for you.
Cancel your old policy properly
Car insurance policies don’t terminate on their own when you switch. You need to formally cancel. So make sure to call your current insurer (or your agent) and let them know the date you want to end coverage. Most companies will require a written notice or an electronic cancellation form for their records. It’s a good practice to ask for a confirmation email or letter that clearly states your policy end date. This documentation can be useful if there’s any dispute or if an accidental charge pops up after cancellation.
If you were on automatic payments with the old insurer, log in to your account (or call your bank, if you had bill pay set up) and stop the auto-payments once the final payment is made. You don’t want to be charged for coverage after your end date. Upon cancellation, you should receive a refund for any prepaid premium that you didn’t use. For example, if you paid for a six-month policy and you leave after four months, you’re owed a refund for the remaining two months minus any cancellation fee. Keep an eye out for that refund in the weeks following cancellation; if it doesn’t arrive, follow up with the insurer.
Also remember that each state has its own rules on insurance cancellation. In most cases, as long as you’ve secured new coverage and properly notified the old insurer, the process is straightforward. There’s typically no penalty beyond a possible small administrative fee. If your insurer tries to persuade you to stay, stick to your decision if you truly found a better fit. Once canceled, your old insurance company may notify your state that your policy ended, which is why having the new policy already in effect is so important (the state will see you have continuous coverage, and you’ll avoid any letters about insurance lapses).
Edge-Case: Will I get a refund if I cancel my policy early? In most cases, yes. When you cancel a car insurance policy mid-term, the insurer will refund the unused portion of the premium. This is usually pro-rated based on how many days were left that you had paid for. For example, if you paid $600 for a six-month policy (about $100 per month) and you cancel two months early, you might get roughly $200 back. Do note that some insurers subtract a small cancellation fee (often around $25 or a percentage of the remaining premium). Always ask your insurer how they handle refunds. They might mail a check or return funds to your credit card on file. It usually takes a couple of weeks. If you don’t see your refund or any confirmation of cancellation, call the company to ensure it was processed. Getting that refund is another reason to properly cancel the policy rather than just letting it lapse. If you simply stop paying, you could forfeit any refund and even ding your credit if it goes to collections.
Update documents and inform relevant parties
Lastly, once you have your new auto insurance policy in hand, make sure to print out your new insurance ID cards (or save the digital version, if your state allows electronic proof of insurance). Replace the old insurance card in your glove box with the new one so you’re prepared if you get pulled over or need to show proof of coverage. If your insurer offers a mobile app, that’s a convenient way to have your policy info and ID card with you at all times.
Next, notify your state’s motor vehicle department if required. Most of the time, you do not need to proactively tell the DMV that you changed insurance companies – your new insurer and old insurer will handle reporting coverage to the state automatically. However, it’s important that there is no gap, because state systems (like your local Department of Motor Vehicles) will detect a lapse if your old policy ends before your new one begins. In some states, even a brief lapse could trigger penalties like a suspended registration.
If your car is financed or leased, you should inform your lienholder or leasing company of your new insurance details. They require this information to ensure the vehicle is properly insured. Typically, your new insurer will also notify them (especially if the lender is listed on your policy), but double-check that your lender received the updated policy info. Finally, if you require an SR-22 filing (a certificate of financial responsibility for high-risk drivers), make sure your new insurance company is authorized to file it with the state. An SR-22 is a document your insurer sends to the state DMV to prove you carry the required liability insurance.
By completing these post-switch steps, you’ll have fully transitioned to your new insurer with peace of mind. Your new coverage is active, your old policy is wrapped up, and all records are up to date. You’re all set!
Frequently Asked Questions
Can I switch auto insurance companies at any time?
Yes, you don’t have to wait until your policy’s renewal date. You can change auto insurance providers whenever it makes sense for you. Just make sure you have a new policy in effect before canceling your current one. Also check if your current insurer charges any cancellation fee for mid-term cancellation. In many cases, the unused premium will be refunded to you once you cancel.
Do I have to pay a fee to cancel my car insurance early?
It depends on your insurer. Most insurance companies do not charge a hefty penalty for canceling a policy early. You’ll usually get a pro-rated refund for the unused portion of your coverage period. A few insurers might charge a small administrative fee (for example, $25 or a percentage of the remaining premium). It’s best to call your insurer and ask about any cancellation fees so there are no surprises. Even if a fee applies, switching at renewal (when your term ends) can avoid that charge.
Will I get a refund if I paid for a full term and then switched insurance?
Yes, in almost all cases. If you prepaid your six-month or annual premium and cancel the policy after switching, the insurer will refund the unused premium for the remaining months. For instance, if you paid for 12 months but switched after 9 months, you should get roughly 3 months’ worth of premium back. Be sure to formally request cancellation and provide any needed documentation; this will trigger the refund process. The refund is usually sent via check or returned to your original payment method within a couple of weeks.
Do I need to notify the DMV when I change insurance companies?
Typically, you do not need to personally notify the Department of Motor Vehicles when you switch your auto insurance. Your state will automatically receive updates from insurance companies about which vehicles are insured. However, avoid any lapse in coverage during the switch. If there’s a gap (even one day), the state’s system may flag your vehicle as uninsured, which could lead to a notice or penalty. As long as your new policy starts before or when the old one ends, the transition should be seamless in the DMV’s records. If your state does send a verification request, simply respond with proof of your new insurance to resolve it.
What if I have an existing accident claim? Can I still change insurers?
Yes, you can still switch insurance companies if you have an open claim on your old policy. The claim will continue to be handled by your former insurer for that incident. When you switch, make sure to keep records of your claim and stay in communication with the old insurer until it’s resolved. The new policy will cover you going forward for any new incidents. Keep in mind that after the claim is settled, it may impact your rate with the new insurer (when they review your driving/claims history), but it doesn’t prevent you from switching. If possible, some people choose to wait until the claim is closed just for simplicity, but it’s not required.
Is it bad to switch auto insurance companies often?
Switching insurance to get a better deal is quite common and completely fine. There’s generally no “penalty” for switching insurers frequently, as long as you maintain continuous coverage. Each time you switch, the new insurer will look at your driving record, claims history, and credit (in most states) to set your rate. If you hop companies very often, you might miss out on loyalty discounts or renewal perks some insurers offer for long-term customers. Also, remember to keep proof of past coverage handy, since a new insurer may ask to verify your previous insurance to honor any continuous coverage discount.