Switching car insurance companies: tips and considerations

Most insurance professionals will recommend shopping for car insurance every six months. The reason for this is simple — your rate is reflective of you and your surroundings, which change over time. So, you absolutely need to shop around before your policy renewal (every 6 months) to make sure you're paying the best price for the best coverage.

If you’re wondering how to switch car insurance companies, you’ll be happy to know that it’s not as complicated as you might think. Having an idea of how the process works can help to ensure that you get the best coverage. We’ll review how to switch car insurance in this step-by-step article.

How to switch your car insurance:
  1. Compare policies
  2. Understand your coverage needs
  3. Do your research
  4. Contact your current insurer
  5. Don't let your coverage lapse
  6. Get your new documents

Additional resources:



1. Compare companies

Many insurance companies know their customers don't want to go through the trouble of shopping for a new auto insurance policy. This is why, on average, most companies raise their rates 4-6% every year because their data shows that the threshold isn't high enough to warrant an immediate switch from their customers. Furthermore, if you've had an accident, added a driver or a car, you should expect your rates to be even higher.

Your first step in getting the best auto insurance coverage should be to see what other companies are offering. Here at The Zebra, our online quoting process allows you to get real-time, bindable quotes from different insurance companies on a local and national scale. We take your privacy seriously, which is why we don't even ask for your phone number, making it impossible for us to spam you. Enter your zip code below to get started! 


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2. Match your insurance coverage

As you start requesting car insurance quotes from other companies, it’s important to start thinking about what your current insurance policy covers and the coverage you’ll need going forward. Do you need collision, comprehensive, and uninsured/underinsured coverage? What’s your deductible? If you’ve just moved to a new state, what is the minimum level of insurance required by your state? 

This information can be found on your declarations page of your current policy. You should always keep a copy of this page — also called a “dec page” — on-hand at home. More specifically, you should have your current dec page directly in front of you when requesting auto insurance quotes. If you do not have one at home, request a hard copy via your current insurer or try to access your account online.

FYI, you need comprehensive and collision coverage if:

  • Your vehicle has a loan or is leased
  • Is worth more than $4,000
  • You want to eventually resell the vehicle for a profit.


3. Do your research

Before signing up for coverage with a new company, a little research never hurts. The best rate doesn’t always guarantee the best coverage. Does the company have good reviews? Does the rating organization J.D. Power give the company its seal of approval? You can also check with the National Association of Insurance Commissioners (NAIC) to check an insurance company's financial viability, as well as looking into the company’s customer complaint ratio. 

Firsthand reports are extremely valuable. If the insurance company has a Facebook page, check out examples of back-and-forth with customers (remember online forums should always be taken with a grain of salt). Is the company responsive after someone files an insurance claim? Are they courteous after a car accident? Chances are that the way a company responds to other customers is how they will respond to you.


4. Double-check your last policy discounts

Make sure your current car insurance discounts and perks will carry over to your new insurer. Telematic and bundling discounts are typically the ones that will not automatically transfer — as a discount for having a clean driving record might. If you are going to bundle, which is recommended, make sure you get a renters/homeowners quote with your new company. Telematics works a little differently based on your chosen company.

Some insurance agents advise to you call your old company before canceling — which you're encouraged to do for a few reasons. First, ask if there are any cancelation fees, especially if you are in the middle of your policy term. Depending on your company and when you cancel your policy, you can be charged a cancelation fee. Next, ask for a policy review. A policy review is basically a check-up on your current plan. You can speak with a company representative who can scan the policy for any discounts for which you qualify that weren’t available when you originally joined. Also, make sure that you aren’t being charged for tickets or accidents that should have by now fallen off your record. 

However, if you're calling to "price match" with your new provider, you're out of luck. Because of the way insurance is regulated, car insurance companies do not negotiate — even if you've been a loyal customer for years. In the end, your current company might already be giving you every possible discount on your insurance premium. Still, it never hurts to ask.


5. Don't let your coverage lapse

No matter if you choose to transfer your car insurance policy to a new company or re-up with your current insurer, do not let your coverage lapse. Car insurance companies look closely for lapses in coverage, and you could be penalized for even the smallest of gaps. Another important consideration: driving without car insurance in the US is illegal in almost every circumstance. Learn here how best to cancel your coverage.



6. Keep your new documents secure

You’ve got a new policy, a better insurance premium, and maybe even improved coverage. With this comes new ID cards and a new dec page. 

Make sure to keep your documents where you can find them. You’ll need your dec page if you want to review your policy limits and coverage. Also, have your ID cards handy in case you get pulled over, are involved in a collision, or purchase a new vehicle. Most larger insurance companies have an app that allows you to store or download policy documents, but having printed copies is never a bad idea, as a lost phone or some other technical glitch could prove problematic.

Switching to a new insurer can seem daunting, but that shouldn’t keep you from finding lower rates or other beneficial perks. Take it one step at a time and you'll be driving around with the coverage you need — hopefully with a little extra change in your pocket.




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How to cancel car insurance

If you have just purchased a policy with a new car insurance company, you’ll need to cancel your previous policy to avoid overlapping coverage. While each car insurance company has its own specific policy cancellation protocol, have a look at these basic guidelines to see how the car insurance cancellation process works.

  • Contact your current insurer. Many of the top carriers — GEICO, Allstate, State Farm — have apps or websites with instructions for how to cancel. Some allow you to begin the process online. Otherwise, you can always give the company a call and express your interest in canceling. You can even mail in or email a written request for cancellation. This is recommended to have a timestamped date for requested cancelation.
  • Ask about cancellation requirements. Some auto insurance companies require written notice via mail. Others may allow for an e-signature. Depending on your company, there may even be a period of advance notice to which you'll need to adhere. 
  • Find out about cancellation fees or refunds. Many companies do not charge fees for canceling your current coverage, but others might. If you’ve paid your premium upfront, you are entitled to the unused portion, minus any fees that your insurance company might charge. 
  • Contact your bank. If you have any automatic payments in place, make sure they are stopped. 
  • Get a written notice from the insurance company that your coverage has ended. 

If your old company fails to cancel your coverage and you're still being charged, call them immediately. Your new policy information (with policy inception date) should be all you need to effectively cancel the policy. If you were charged an unnecessary premium, you can be refunded back to the start date of your new policy.


Canceling car insurance because you're no longer driving?

Maybe you’ve moved to a city where having a car is more of a burden than a convenience, or perhaps you’re just tired of the expenses associated with maintaining a car. For these purposes, canceling your insurance coverage follows much the same process as above. However, depending on your insurer, you may be required to show a bill of sale for your previously insured vehicle if you are not providing new proof of insurance. 

That said, if you plan to continue driving at some point in the near future, canceling your car insurance might not be the best idea. Car insurance companies like to see continuous coverage when putting together your policy. A lapse in coverage may cause your rates to increase in the future. If you think you may be going carless for a few months, consider a non-owners policy to maintain your coverage. 

  • A non-owners policy is a liability-only policy you can use while borrowing friends' vehicles or renting a car. It prevents you from having a lapse in coverage.
  • A lapse in coverage not only bars you from certain insurance providers but causes your rate going forward to be higher.


Switching car insurance when you move

If you're moving within your state, you may be fine by just updating the address on your old policy. Keep in mind: moving to a different zip code will impact your premium. Because risk is calculated at the zip code level, you should expect your premium to change whenever you move. For example, if you move to an area with fewer accidents and drivers, insurance companies would view that area as less risky and thus your premium would lower.

Regardless of whether or not you switch insurance carriers, it is mandatory to update your address. This is especially true if you move states, as each state has its own insurance laws. Not updating your information can lead to having your claims denied or being dropped from your current coverage altogether. 

Learn more about how to handle car insurance when you move between states.


Can you switch car insurance companies with an open claim?

Yes, you are allowed to switch auto insurance companies with an open claim. As long as the incident occurred while you were covered by your previous insurance company, the insurer will still pay out your claim.

Insurance companies don’t penalize you for switching your car insurance with an open claim. Stay in contact with your previous insurer until the claim is settled. Keep in mind some claims can have an impact on your rates.


How to get the best rates on a new car insurance policy

If you’re looking for the best car insurance rates, comparing different companies is a no-brainer. Whether you plan on switching car insurance companies mid-policy or waiting until your current policy ends, getting the best coverage doesn’t have to be complicated. Start the process by gathering free car insurance quotes by entering your ZIP code below and you could enjoy a better rate before you know it.

Ross Martin LinkedIn

As a licensed insurance agent, Ross is responsible for researching and writing about all matters related to auto and home insurance. He has a background in writing and education, as well as a master's degree from Royal Holloway, University of London. He has been quoted by CNET, iDriveSafely.com, and Kin Insurance.