Switching auto insurance companies is a fairly simple process. You'll find a new policy that suits your needs, then contact your current car insurance provider to see if they're willing to match the new policy's premium and coverage. If not, buy the new car insurance and start the cancellation process for your old one.
This article will cover:
- The process of changing auto insurance providers
- What to avoid when changing car insurance companies
- When to change your auto insurance
How do I change my auto insurance provider?
It isn't particularly difficult to switch to a new car insurance company. The steps are:
- Find a new policy
- Ask your current provider to match it
- If you can't get it matched, buy the new policy
- Cancel your old policy
Find a new car insurance policy
If you've decided to change to a different auto insurance carrier, you'll want to take the opportunity to go online and compare multiple car insurance quotes. Looking at the offerings of many different providers can give you an idea of what the best combination of coverage and premium is available to you. It also gives a good bargaining chip when you approach your current provider.
Your new provider will make sure that your liability limits are in accordance with state law, but you'll want to consider upping your personal injury protection to at least $300,000 to avoid having to pay for a major accident out of pocket. If you purchased your car through a lender, they'll require you to have full coverage, so make sure collision and comprehensive coverages are included in your quote.
Also make sure to look into auto insurance discounts your new provider carries that you may qualify for. Many auto insurance companies offer a wide array of discounts that can help shave more money off your premium.
Contact your current provider
Taking this step may mean you won't have to go further in the process of switching your car insurance. When you call your auto insurance company, have the printout of your new quote, along with the declaration page of your current car insurance policy. Let your current provider know you've been looking at a better policy and see if they're willing to match it.
Due to the competitive nature of the car insurance industry, insurers usually switch up their costs and policy offerings on a yearly basis to try to stay ahead of each other. You can use this to your advantage. If your current auto insurance carrier isn't willing to negotiate on coverage or price, move on to purchasing the new policy.
Get your new auto insurance policy
Contact your new auto insurance company and finalize the policy. Once you receive your new policy insurance binder or card, contact your outgoing auto insurance provider and ask to start the cancellation process. Your old insurer will provide you with the necessary forms to fill out and walk you through the steps you need to take.
After you've filled out the proper paperwork and it's resolved, you should receive a refund of any money remaining from your previous policy, minus any fees.
What not to do when switching your auto insurance company
As simple as it is to change your car insurer, there are things to avoid during the process:
Cancelling your old policy without having a new one
Do not change auto insurance companies until you have a new provider in place. Any lapse in coverage is too much. You run the risk of getting into an accident without a policy, leaving you to pay any liability or property damage you cause out of pocket.
Furthermore, if you financed your car, your lender will probably be on your policy as a loss payee. This means that they will be notified of any changes to your auto insurance coverage. As they require auto insurance as part of your lending agreement, a period without coverage could lead to repossession of your car.
Changing providers before your renewal period
Unless your relationship with your car insurance company is contentious, you should avoid switching carriers if your renewal period isn't soon. Auto insurance providers often have a cancellation fee if you terminate your current policy before the expiration date. This fee can be either a percentage of the remaining premium balance or a flat fee. This fee could offset the savings you gain through the new policy.
If you need to switch car insurance before your current policy expires, see if your new provider has a new customer discount or a policy transfer discount. This could help offset any early cancellation fees.
When is a good time to change my auto insurance?
You can change your auto insurance policy whenever you want. However, as we've mentioned, it's usually in your best interest to wait until your current policy expires. If that's covered, these are some other opportunities for a switch:
Getting married or divorced
If you get married or divorced, or are just adding or removing someone from your auto insurance policy, this could greatly affect your rates. Shop around and see which providers offer the best deals on policies with multiple drivers, or discounts for married couples.
Customer treatment and satisfaction
If you've had a negative experience with filing a claim or with your car insurance company's customer service, that's a perfectly good reason to start looking elsewhere for a policy. You may not be happy with the resolution of a recent claim, or you may feel you got poor treatment from your provider's customer service. This is a good time to switch.
If you want to see how a particular car insurance provider stacks up for keeping their customers happy, check out J.D. Power's annual auto insurance study.
Moving to another state
This is a situation that usually demands switching auto insurance providers. States tend to require different liability coverage limits, sometimes along with uninsured/underinsured limits. If you need to get auto insurance in a new state, you'll want to see what options you have.
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