Switching car insurance companies? Read how and when to do it

Switching car insurance companies is not as easy as switching lanes. You should do a lot of planning and research, to have a clear idea of what your car insurance should be. You should switch your car insurance if you’re relocating to another state, buying a new car, or simply looking for better coverage. Switching your car insurance, even if you’re relocating to a new ZIP code in the same city, could save you hundreds of dollars. 

If you decide to switch your car insurance, be sure you’ve covered all of your bases, including canceling your current coverage. Getting car insurance quotes can also help you make sure you have the best car insurance for your needs if you recently got married or are about to have a teenager behind the wheel. The insurance editorial team at Way.com has broken down the steps on how to change your car insurance.

How to switch car insurance companies

Although price is an important element to consider when choosing an auto insurance company, it is not the only one. Working with a competent insurance agent can help you find the right car insurance company for you. Your agent may advise ways to reduce your costs, such as keeping a clean driving record or purchasing a less expensive car. If your insurance is written through an independent agency, this step is especially crucial. Unlike captive agents, who can only sell insurance products from a single business, independent agents can represent various insurance companies. 

While keeping your insurance with the same agency, an independent agent may be able to shop your policy with multiple car insurance companies to get you a lower cost.

Compare car insurance quotes

If you’ve decided it’s time to switch insurance companies, the first thing you should do is seek rates from many different auto insurers. When shopping for insurance, we recommend you get at least three car insurance quotes. You’ll be able to compare auto insurance costs, coverage options, and discounts this way. Make sure you’re getting estimates for the same coverage so you can compare premiums side by side. Whether you’re getting estimates online, over the phone, or at an agency, you’ll need to have the following information on hand:

• Your place of residence
• Your car’s VIN, year of manufacture, and model
• Social Security number or driver’s license

You can check available discounts while comparing car insurance quotes. Inquiring about all of the discounts you are eligible for on a quote could help you obtain cheaper coverage.

Research

Before you get insurance, you should do your homework on the insurer. The following are some useful resources:

• Way.com insurance business reviews: To find the affordable and best car insurance companies, Way.com’s editorial staff looked at average premiums, customer service scores, third-party financial strength ratings, available policy options, and discounts. We looked at the best car insurance companies in each state in addition to our overall company picks to give you a better idea of what’s available in your area and how much it might cost.
• J.D. Power & Associates: This firm performs research from various perspectives, including overall customer satisfaction and claims satisfaction, and assigns a score to each vehicle insurance provider. Some of its rankings are also based on geography.
• AM Best: AM Best is a wonderful resource if you want to learn more about a company’s financial strength. AM Best assigns letter grades to corporations based on various financial metrics that can reflect a company’s ability to pay claims on time. 

Check the coverage options

You may be financially vulnerable if you have insufficient auto insurance, but too much coverage may mean overpaying. If you believe you are overspending on your auto insurance, you might consider switching. In the end, the more coverage you add to your auto insurance policy, the higher the premium will be. Understanding the many types of car insurance coverage — and the ones you require — is a vital step in figuring out how to switch auto insurance.

Check if there is any penalty involved

Whether you determine that switching your car insurance is the best option, you should check to see if there are any penalties for switching car insurance providers before the end of the coverage period, such as a cancellation charge. Fortunately, most car insurance companies allow you to terminate your policy at any time as long as you notify them in advance. While most car insurance companies will refund any unused premiums, others may levy a fee if you cancel your coverage during the term. 

Before canceling your policy, check with your company’s customer service department or your insurance agent to see whether there are any cancellation restrictions. If you learn that you’ll be charged a penalty if you cancel in the middle of your term, you might want to reconsider switching plans. 

Update your status with your current company

While you’re getting prices from other companies, contacting your existing auto insurance company can be a good idea. Your company will not be able to offer you a reduced rate solely to keep your business (car insurance rates are non-negotiable). But you may be able to identify discounts and other savings options that you are currently overlooking. 

Avoid lapse when switching your insurance

You may encounter a lapse in coverage if you transfer car insurance before your current policy expires. If you are involved in an accident while uninsured, a lack of insurance coverage could result in serious legal and financial consequences. You will be accountable for the damages, including any related medical expenditures if you cause an accident and do not have insurance coverage. Insurance companies may charge you more prices in the future if you drive without insurance because they may regard you as a high-risk driver. Your new car insurance company should be able to time the start of your new policy to coincide with the end of your old one.

Cancel your policy before the new date

Switching car insurance companies? Don’t assume that your current policy will be immediately canceled if you stop paying your rates. If you signed up for auto-renewal, your current car insurance company might report you for non-payment to credit bureaus. When transferring to a new car insurance company, most insurance experts advocate contacting your existing carrier to cancel your coverage.

To cancel your previous policy, follow these simple steps:

• Notify your current insurance car insurance company that you will be ending your policy. They will not be able to bill you for future coverage if you do this.
• If you signed up for auto-payment, you might need to enter into an online account and deactivate the auto-withdrawals. If you pay your premiums through your bank’s bill pay service, make sure to cancel the payments.
• Request a written confirmation of the termination from your car insurance company.

Each insurance provider has its cancellation procedure. You may be required to sign a cancellation authorization form or speak directly with a firm customer service person. Some firms may allow you to cancel your account online. But you should prefer to put it in writing to confirm the cancellation. Your insurance agent will be able to assist you with the process.

When to switch to new car insurance

You are told that switching car insurance is no big deal when you get your first car insurance. But trust us, it IS a big deal! There are certain situations when you should not switch your car insurance company. We will examine that in detail later. Below are the times when you should switch your car insurance company or check out the quotes. Checking car insurance quotes regularly will ensure you’re getting the best deal and coverage for your needs.

Changing your city, state, or Zipcode

Your auto insurance rates are affected by your city, state, and even ZIP code. If you are relocating, that might be a good time to shop around for new car insurance. This will help you check if prices are more competitive in your new location.

Adding a driver or a car to the mix 

Consider checking rates from various car insurance companies if your teen gets a driver’s license or if you’re adding a new car to your household. Every company has various rates, and many of them offer student discounts. You will find a company that will give you a better deal for your new driver or car.

A new direction in your life

Newly married? Buying a new house? Got a new job? Divorced? These events might seem isolated, but it has a connection to your car insurance! These events can have an impact on your auto insurance needs and price. In these instances, updating or switching your current car insurance may be a good idea.

Time to renew your car insurance

When it comes to renewing your car insurance, there are a few things to keep in mind. You can alter your auto insurance policy at any time. But your renewal date is an especially good opportunity to do so. You may be less likely to have to deal with small bills, a cancellation charge, or refunds on the previous policy if you cancel it on its renewal date. Start your new policy on the same date. The most important thing is to make sure there are no gaps in coverage. This might put you at risk financially and raise the cost of future premiums.

When not to switch your car insurance companies 

While changing car insurance has its benefits, there are occasions when it is not good to switch car insurance companies. If you have made a claim, you will be unable to switch car insurance companies. Your new auto insurance company will not properly evaluate your policy if the claim has not been settled and paid. This could result in a significant rise in your new policy premium at renewal, a retroactive charge to account for the increased risk that the new company was unaware of, or even termination for misrepresentation if you failed to inform your new carrier of the outstanding claim.

What to do after switching car insurance companies?

You’ll probably want to replace your old insurance ID card with an updated one.  Keep it in your car or wallet once you’ve formally canceled your old policy and started your new one.

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Switching car insurance? Way.com could be your answer

As with all car insurance, start by comparing quotes from several insurance providers. This ensures you get a good deal on your car insurance. If you need multiple car insurance quotes in less than 10 minutes, check out the way.com app or website by tapping the banner below.

We only require your basic information to research different uninsured motorist coverage options for you. Then you can choose your policy and benefit from the protection it provides.

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