This is the final straw. Your insurance company has finally gone too far: another incorrectly processed claim or another unjustified rate hike. You're looking for a simple solution, but the company just isn’t holding up its end of the bargain.
If this sounds familiar, the question has probably crossed your mind more than once: how do I switch car insurance companies? It’s not as complicated as car insurance carriers want you to think, but the process can be tricky if you're unprepared. There are several ways to keep the process of switching car insurance companies simple, easy, and straightforward. We’ll review how to switch car insurance step by step.
1. Understand your current coverage
Before you begin switching auto insurance by requesting quotes, it’s important to know what your current insurance policy covers. Do you have collision coverage, or comprehensive? What’s your deductible? If you’ve just moved to a new state, do you have the state minimum bodily injury coverage required to legally drive your car? Switching car insurance providers is also a great way to upgrade your policy to a higher coverage level.
All of this information can be found on your declarations page. You should always keep a copy of this page — also called a “dec page” — on-hand at home. More specifically, you should have your dec page directly in front of you when requesting quotes from other car insurance companies. If you do not have one at home, request a hard copy via your current insurer or try to access your account online.
2. Shop around
The most important thing to remember is that car insurance quotes are always free. If an “insurer” tries to sell you a quote, this is an unnecessary expense. Do not pay for car insurance quotes — they're readily available for free online.
If you find a smaller insurance company that provides the best quote, don’t discount the company because of its size. A smaller local or regional auto insurance company can be just as effective and supportive as a major insurer. The wide array of car insurance options makes it worthwhile to compare premiums and policies from as many insurers as possible. Furthermore, be sure to compare extras and add-ons like occupation-based discounts, telematics-powered policies, "photo-filing" for damages, and more.
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3. Assess your options
Before signing over your coverage to a new company, a quick Google search never hurts. Does the company have good reviews? Does the National Association of Insurance Commissioners (NAIC) give the company its seal of approval? Firsthand reports are extremely valuable. If the insurance company has a local Facebook page, check out any back-and-forth with customers. Is the company responsive after someone files an insurance claim? Are they courteous after a car accident? Chances are, how the company responds to other customers is how they will respond to you.
If you expect your car insurance company to be a good neighbor, you should hold up your end of the bargain. In the first 60 to 90 days of a new insurance policy, it’s relatively easy for a company to drop you if you file a claim for an at-fault accident or violation. You should always strive to be a safe driver — but be especially mindful early on in your policy.
4. Allow your current company to counter with discounts
You can give your old provider one last chance to keep your business by offering a competitive rate. Once you’ve found a new policy, it’s a good idea to show your current car insurance company the discounted rate you found somewhere else — especially if you’ve been a loyal customer for years.
If you’re at the point of no return with your insurer, it might be time for a policy review. A policy review is basically a check-up on your current plan. A company representative will scan the policy for any coverage redundancies — like carrying liability coverage and comprehensive coverage — or any discounts for which you qualify for that weren’t available when you originally joined. You can also request a rate revision. Car insurance companies frequently reassess the way they rate customers, and a rate revision is as routine as choosing a new phone plan.
In the end, your current company might already be giving you every possible discount on your insurance premium. It never hurts to ask!
5. Don't let your coverage lapse
No matter if you choose to switch car insurance companies or renew with your current insurer, it's crucial to cancel your current policy the same day as your new contract begins — or to maintain some overlap. Car insurance companies look closely for lapses in coverage, assessing penalties for coverage gaps. Another important consideration: driving without insurance in the US is illegal in almost every circumstance.
Check for any potential penalties — like a cancellation fee — if you opt to switch. Call or email your current insurer to alert them of the cancellation and get their confirmation in writing.
6. Put your new ID cards in the same place your old ones were
You did it! A new policy, a new insurance premium, (maybe new coverage) and definitely new cards! How fancy.
One last tip — and it’s an important one — is to put those ID cards in the same place you kept your old ones! Your new policy won’t do anyone any good if you're still carrying cards from an out-of-date policy.
Switching insurance companies can seem daunting and overwhelming, but that shouldn’t keep you from finding the best insurance rate possible! Take it one step at a time and you'll be driving around completely covered — with a little extra change in your pocket.