How to switch car insurance companies seamlessly

While switching car insurance is easy, there are a few things to watch out for. The biggest issue we see is coverage gaps caused by different coverages or coverage levels between your old company and your new company, or lack of coverage because the old policy lapses before the new one begins.

How to switch car insurance companies seamlessly

You don’t have to wait for an open enrollment period to switch car insurance – you can change policies any time you want. If you’ve found a better policy, switching is easy. It’s also easy to shop around for a new policy after a big life change like buying a new car, moving, or getting married. Before you start, our main precaution is to mind the coverage gap. Read on to learn how to switch car insurance companies and why timing is everything when you change car insurance. 

How to switch your car insurance policy 

Decide if it’s a good time to change car insurance 

Although you can change your insurance provider anytime, there are times when it’s a better idea – or a worse one. 

The best time to switch car insurance companies is when: 

  • Your premium goes up. If you’re paying more for car insurance than you used to, it’s time to compare some quotes. You might be able to find a lower rate at a different car insurance company.  
  • Your life is changing. Shifts in your marital status, homeownership, and job can change the way that you live and drive. Changes in how you drive are a good reason to check if you have the best car insurance policy for your current lifestyle. 
  • You’re adding a person or vehicle to your policy. If your roommate or partner starts borrowing your car regularly, it’s smart to list them as an additional driver on your policy. And if you get a new car, you’ll need to insure it. These are both great times to get quotes from several insurance providers to see who can best serve your situation. 
  • You’re moving. Different areas have different accident rates, number of drivers, and crime rates. These factors all affect car insurance premiums. If you’re changing ZIP codes, cities, or states, your move could change your premium. A new insurance provider might have a better rate in your new region. 
  • Your policy is renewing soon. The easiest time to change car insurance is when your old policy is about to renew. Instead of renewing, you can cancel the policy and start a new one. That way, you don’t need to worry about cancellation fees or refunds. Less paperwork is always nice! 

Less opportune times to switch your car insurance provider are when: 

  • You have a pending claim. If you filed a claim with your current insurance provider, canceling your policy and starting a new one could cause hiccups in the process. You could have trouble accessing your claim payout. The new car insurance company might refuse to give you a new policy because they can’t quote the right rate until they know the outcome of your claim. 
  • You’ve had insurance for less than six months. If you recently bought your first car insurance policy, your rate might be higher than you want. That’s because insurance companies reward people who have a history of being continuously insured. You’ll need six months of insurance to get that benefit, so if you wait until then, you’ll likely have better offers when you seek new quotes.  

Check if you have to pay cancellation costs 

When you change car insurance companies, you might have to pay a cancellation fee. Call your insurance agent to ask about your policy’s rules about cancellation fees. Although you can change insurance providers anytime, some companies charge a fee if you cancel your policy before the end of its coverage period. However, your insurer will usually refund the portion of your premium you haven’t used. 

In the Bay State? Learn more about how to cancel your car insurance in Massachusetts

Compare car insurance quotes from multiple carriers 

To switch car insurance companies, you need to know who you’re switching to! To get the best deal, you should get quotes from several companies. Each provider has different policies, discounts, and priorities, so each quote will be a little different. By getting quotes for similar policies from different insurance carriers, you can find the one that best fits your budget and needs. 

We have an article all about how to compare car insurance quotes if you want to go in-depth, but here are the basics: 

  • Gather your information. Insurance companies need to know about your insurance and driving history to give an accurate quote. You’ll need to provide information like your date of birth, license number, vehicle identification number (VIN), and driving and claims records. 
  • Connect with an agent. We recommend working with an independent insurance agent, like the agents at Surround. Independent agents aren’t tied to a single insurance provider, so they can deliver quotes from multiple car insurance companies. 
  • Ask about common car insurance discounts. Each insurance company offers its own set of discounts. You might qualify for some – so be sure to ask about car insurance discounts when getting quotes.  
  • Check reviews for the companies you are considering. Some insurers have better reputations than others. Be sure your quotes are from reputable ones. You can find reviews for car insurance companies on sites like ConsumerAffairs, Consumer Reports, or the Better Business Bureau

Make sure there’s no gap in coverage 

You and your car always need to be covered, even while you’re trying to switch insurance companies. Even a lapse of a single day could become a disaster. If you’re briefly uninsured, you’ll lose the continuous coverage discount we mentioned earlier. Plus, almost every state requires continuous liability insurance, so you’ll be breaking the law. And, worst of all, if you cause an accident without insurance, you’ll be liable. That means you’ll be responsible for the damages (expenses) associated with the accident, including car repairs and medical bills. Even if the accident was the other driver’s fault, you could lose your license for driving without insurance. Having a gap isn’t worth the risk. 

Luckily, car insurance companies deal with customers changing policies all the time. The company you pick can set your new policy up to start right when your old policy ends, or slightly before. 

Buy your policy, and make sure your former carrier knows 

You’re ready to make the switch! Once you’ve signed up for your new insurance policy and set a start date, you need to contact your previous insurance company and set a cancellation date. Ask for them to terminate the policy in writing. You must tell your old insurer you’re canceling your policy – you can’t just stop paying for it and hope they take the hint. Once you terminate your old policy, your former insurer will stop billing you. They may charge a cancellation fee and/or give you a refund for any unused part of your premium. 

Your new insurer will send you an insurance card. Before it arrives, you should be able to print out a temporary proof of insurance from your insurer’s website. Don’t forget to take your old insurance card out of your wallet when you switch. 

And that’s it – you’re ready to seamlessly switch car insurance companies! If you need an agent to get quotes for you or help you manage the transition from your old carrier to your new one, drop us a line. We’ll make it simple.

Frequently asked questions:

Can you switch car insurance companies if you have an open claim?

You don't need to worry about switching insurance companies while you have an open claim. The claim is tied to legal language in the policy that was in force on the day the crash happened. Canceling your policy or moving to a new insurer at renewal after the date of the crash will not affect how if your claim covered or how much the insurer pays.

Does changing your car insurance affect your credit score?

No. In most states, most insurance companies do use your credit score to calculate your auto insurance rate. When they order your credit score from a credit bureau, it processed as a soft inquiry. Soft inquiries are specifically excluded in the calculation of your credit score, since they don't reflect credit seeking behavior. That's in contrast to hard inquiries like getting quote for mortgages or car loans. Those do affect your credit score because they are directly related to taking out more credit.

Is there anything state specific I need to know about cancelling car insurance?

Every state has it's own cancellation regulations, but they are generally very similar from state to state (and your insurance agent will know them). The one exception is Massachusetts, which requires a special form called a 2A. The gory details are in our complete guide to canceling car insurance in Massachusetts.

This is general information based on questions our customers ask us. It may not be right for your specific situation. You should get some advice from a licensed insurance agent (like us!) before you make a decision on your own insurance.