With 15 years of immersion in the world of personal finance, Ashley Kilroy simplifies financial concepts for individuals striving toward financial security. Her expertise has been showcased in reputable publications including Rolling Stone, SmartAsse.
Ashley Kilroy Insurance WriterWith 15 years of immersion in the world of personal finance, Ashley Kilroy simplifies financial concepts for individuals striving toward financial security. Her expertise has been showcased in reputable publications including Rolling Stone, SmartAsse.
Written By Ashley Kilroy Insurance WriterWith 15 years of immersion in the world of personal finance, Ashley Kilroy simplifies financial concepts for individuals striving toward financial security. Her expertise has been showcased in reputable publications including Rolling Stone, SmartAsse.
Ashley Kilroy Insurance WriterWith 15 years of immersion in the world of personal finance, Ashley Kilroy simplifies financial concepts for individuals striving toward financial security. Her expertise has been showcased in reputable publications including Rolling Stone, SmartAsse.
Insurance Writer Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
| Lead Editor, Insurance
Updated: Oct 18, 2023, 7:26am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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Nearly half (46%) of consumers made changes in how they managed their car insurance costs in 2020, according to the J.D. Power 2021 U.S. Insurance Shopping Study. Among those who made changes, 15% shopped for another car insurance company and 12% switched to a new insurer.
If your car insurance needs have changed or you simply want to shop around for cheap car insurance, here’s how to switch car insurance companies.
Since car insurance rates vary considerably among companies, one of the best ways to find the right policy is to compare car insurance quotes from multiple companies. When comparing quotes, pay attention to:
Coverage options, limits and deductibles. While price is an important factor, it’s not the only thing to look at. Do you need increased liability coverage in case of a lawsuit against you over an accident? Or is it time to drop collision and comprehensive coverage because your vehicle is several years old?
“When comparing new quotes to your current premium, make sure you are comparing ‘apples-to-apples,’” says Jon Bloom, vice president of product management at Erie Insurance. “Ensure that coverages are in line with the coverages you already have in place, so you don’t find yourself over or underinsured.”
Customer service and convenience. The best car insurance companies offer good service and a good price.
When you’ve chosen a new company, you want the new policy to be in force before the previous policy is canceled. Insurers let you choose an effective date. For example, you can choose for your new policy to be effective immediately or at a date in the future.
Once you confirm your new policy is effective, you can cancel your policy with your previous insurance company. If you cancel a previous policy before a new policy is effective, you could run into some serious financial problems.
First, you won’t have coverage on your car, which means if you get into an accident, you’ll be on the hook for any car repair bills, property damage and medical expenses.
Second, driving without insurance is illegal in most states, which can result in fines and license suspension.
Third, driving without car insurance creates a “coverage gap,” which will cost you more in insurance premiums when you buy a policy. That’s because insurers consider driving without insurance a higher risk, which means higher rates.
Make sure to ask for a cancellation confirmation. This way, you can ensure your auto insurance policy with your previous company doesn’t automatically renew.
Now that you have a new car insurance company, you need to update your insurance ID cards. If you get in a car accident or pulled over, you may need to show proof of insurance.
Your insurer can typically provide you with proof of insurance via fax or email after you buy a policy. But many insurers offer an electronic insurance card, either for download to store on your smartphone or through the company’s mobile app. Digital insurance cards are acceptable in 49 states and the District of Columbia.
If you have a car loan or lease, make sure you contact your lender or leasing company and notify them of the change. Keep in mind, most lenders and leasing companies require you to have collision and comprehensive insurance.
“It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options,” says Jon Bloom, vice president of product management at Erie Insurance.
Here are reasons that might merit a switch to a new insurer:
With so many choices for car insurance companies, it can be hard to know where to start to find the right car insurance. We've evaluated insurers to find the best car insurance companies, so you don't have to.
You won’t be penalized for switching car insurance companies, but you could be subject to cancellation fees, depending on your insurance company. Also, you could miss out on certain car insurance discounts if you switch to a new insurer. For example, you could lose a loyalty discount. If you move your policy to a new company and keep a policy with a previous insurer, you could lose a multi-policy discount. One of the best discounts you can snag is when you bundle your auto and home insurance with the same insurer.
Yes, you can switch car insurance companies while you have an open insurance claim with your current insurer. If the accident occurred while you were covered under your previous insurance policy, that insurer needs to handle your claim. You will have to stay in touch with your previous insurer to resolve any open claims.
When you cancel a policy mid-term, you should get a prorated refund for the remainder of your policy term. For example, if you paid your annual premium in full and canceled your policy after six months, you should get a refund for the remaining six months (minus any applicable cancellation fees, depending on the company). You will likely be refunded in the same manner as your payments. So if you pay by credit card, you’ll see the refund as a credit on your card balance.
