Disclaimer: It is important to note that CarShield does not offer auto insurance, and CarShield’s products cannot replace your auto insurance coverage. This article is for informational purposes only.
Thinking about switching car insurance? You're not alone.
Many drivers feel hesitant about changing car insurance providers, worried the process might be complicated or time-consuming. The good news is that learning how to switch car insurance is straightforward when you know the right steps to follow.
Whether you're looking to save money or improve your coverage, understanding how to change car insurance companies can put you in control of protecting your vehicle.
This guide will walk you through how to change car insurance providers. It will also help you decide when making the switch makes sense.
How to Switch Car Insurance in 4 Simple Steps
Switching car insurance doesn't have to be overwhelming. Follow these four straightforward steps to make changing car insurance a smooth and stress-free experience.
Step 1: Review Your Current Policy
Before you learn how to switch car insurance effectively, start by examining your existing policy documents.
Check for any cancellation fees that might apply if you terminate early. These typically range from $50 to $100, though some insurers don't charge them at all.
Note your policy's expiration date and whether auto-renewal is enabled. Understanding your current coverage levels, deductibles, and limits ensures you'll compare apples to apples when shopping around.
Lastly, consider whether you need just liability coverage or vehicle service contract coverage for complete protection.
Step 2: Shop for Quotes
Once you know what you currently have, it's time to explore your options to change car insurance. Contact at least three to five different insurers to get quotes and compare rates.
When requesting quotes, provide identical information to each company. That means same coverage types, limits, and deductibles so you can make fair comparisons.
Don't just focus on price, either. Research each company's customer service reputation, claims process, and financial stability.
Many insurers also offer various protection plans that can bundle additional coverage options. Ask about available discounts for things like good driving records, bundling policies, or safety features in your vehicle.
Step 3: Purchase Your New Policy
After comparing options and finding the best fit, it's time to finally make the move.
The most critical aspect of how to change car insurance successfully is timing. Schedule your new policy's start date to align with your old policy's end date (or even one day before it expires) to ensure you don't have any coverage gaps.
A lapse in insurance, even for a single day, can result in higher premiums down the road and leave you financially exposed if an accident occurs during that period. Lastly, request confirmation of your new policy in writing and obtain proof of insurance.
Step 4: Cancel Your Old Policy
Changing car insurance requires you to formally notify your previous insurer about the cancellation. You need to actively cancel to avoid automatic renewal charges and potential fees.
Contact your old insurer by phone, email, or written letter to request cancellation. Specify the exact date you want coverage to end.
Ask for written confirmation that your policy has been terminated. If you've paid premiums in advance, inquire about receiving a prorated refund for any unused coverage period.
Keep all documentation from both your old and new insurers. This is helpful in case any questions arise later.
6 Reasons to Look for New Auto Insurance Right Now
We are all looking to shave down our costs wherever we can. If you want to increase your savings, then you may want to think about how much you’re paying to insure your rolling piggy bank.
Below are a few reasons to take another look at switching car insurance.
1. You’ve had the same insurance policy provider for years.
Over time, your insurance rates can increase. If you have automatic payments set up to cover your policy, you may not even notice the rising cost of your vehicle insurance.
There are many reasons why your insurance company will raise the cost of your insurance, even if you haven’t made any claims. Before switching auto insurance, it’s a good idea to annually compare your rate with last year’s and even to shop around for better quotes.
2. You’ve recently become a home owner.
If you’ve stopped renting and taken the plunge of owning a home, then you may want to look into switching auto insurance by bundling it with your home policy. Many providers will offer a discount for having both, and the incentives can be attractive enough to lower your existing auto coverage rates.
3. You’ve moved to a new area.
If you’ve bought a new home (or simply moved to a new apartment) you’ve probably just changed your zip code. That is reason enough to consider changing auto insurance.
This is an often-overlooked reason to re-evaluate switching insurance companies. One of the major factors that determines your coverage cost is where you park your vehicle and if you live in an area where car theft is common, your rate will be higher.
If you move to a home where there are fewer vehicles on the road, your rate just may come down due to the lower risk of colliding with another car.
4. You just got married.
Tying the knot can lead to more financial security. Having two incomes to draw on to cover all of the household expenses can feel like giving yourself some room to breathe when looking at the monthly bills.
However, don’t let that blind you to the fact that you could be saving money. Now is a good time to switch auto insurance.
Things like marital status affect how your rate is calculated according to CNBC.com. It is important to point out, however, that if you have entered into holy matrimony and said “I do” to someone with a poor driving record, you may end up paying more.
5. You have had another birthday.
It may be tempting to stop counting your birthdays after 21. But in reality, you should be looking forward to some plateau ages when it comes to paying for car insurance.
Your age and accumulated driving experience can change the amount you pay. For example, a 30-year-old with a clean driving record will pay substantially less than an 18-year-old with no claims.
6. Your credit score has improved.
You may notice that a lot of the things on this list seem to happen as a result of one another. But, they all still directly affect the amount you pay to insure your vehicle.
You’ll notice that as you get older, get married, and buy a home you’ll tend to have more financial security and as a result, a better credit score. Your credit score plays a factor in determining your car insurance premiums as explained by Nationwide.
Credit score can have direct correlation to the likelihood of you making your insurance payments regularly and on time. As you can guess, a consistent paying customer is much cheaper to insure, and if your credit score has gone up, your rates may just go down.
Any time you want to save money you should be looking at switching car insurance. And if your research starts turning up information about vehicle service contracts, remember that these two types of coverage are very different! An insurance policy will generally cover different things than a vehicle service contract, so it will be useful to understand the difference.
While the aforementioned 6 reasons are strong factors in determining your coverage rates, there are many more that can affect the cost of your premiums.It’s important to point out that changing car insurance frequently can be detrimental to your rates, and you should be aware that significantly lowering your premium usually means less coverage. With that said, always look at what the quoted policies cover as well as the price.
The Bottom Line of About Changing Car Insurance
Learning how to switch car insurance is simpler than most people think. By reviewing your current policy, shopping smart, timing your purchase carefully, and properly canceling your old coverage, you can change car insurance providers with confidence.
Remember that while insurance protects you from accidents and liability, it doesn't cover mechanical breakdowns or repairs due to normal wear and tear. This is where extended warranties and/or vehicle service contracts become important.
While you're taking control of your insurance costs, consider also protecting your vehicle from unexpected repair expenses. CarShield offers comprehensive coverage that picks up where your insurance leaves off and provides benefits that can save you thousands on mechanical repairs.
Ready to explore your options? Contact us today to learn more about protecting your vehicle investment.
Frequently Asked Questions
Can you switch car insurance at any time?
Yes, you can switch car insurance anytime throughout the year. However, you should review your policy for any early cancellation fees and ensure your new coverage starts before your old policy ends to avoid gaps.
Do I need to cancel car insurance when switching?
Yes, you must actively cancel your old insurance policy when switching providers. Don't assume cancellation happens automatically. Formally notify your previous insurer in writing or by phone to avoid being charged for unwanted coverage or facing automatic renewal.
Is it hard to switch car insurance companies?
No, the process of how to change car insurance companies is quite straightforward. It typically takes just a few hours of your time to compare quotes, purchase a new policy, and cancel your old one. Most insurers make it easy to get quotes online and handle cancellations with a simple phone call.
Is there a fee if you cancel your car insurance?
Some insurers charge early cancellation fees if you terminate your policy before it expires. However, many companies don't charge cancellation fees at all. Check your policy documents or contact your insurer directly to understand your specific terms before switching.
