How to Change Car Insurance: An Expert Guide (2023)

Whether you’ve just purchased your first car insurance policy or are a veteran customer, it’s not a given that you will stay with the same insurance company for your entire time as a driver.

As your life and needs evolve, it’s essential to review your car insurance coverage and shop around for a policy that is better suited to you.

However, finding a new car insurance policy can be challenging if you’ve never switched to another car insurance company. This guide will discuss all the tips you need to follow to switch to one of the best car insurance companies to fit your needs.

How to Change Your Car Insurance Company

If you’re reading on this article, you’re also probably asking what is the process for transferring car insurance to a new car? Or perhaps the process of changing insurance company? Once you decide to switch your car insurance company, the process can be as simple as ending your policy via a mobile app or over the phone. However, before ending your relationship with your current car insurance company, here are some important tips.

Determine How Much Coverage you Need

It’s important to point out that every state has its minimum auto insurance requirements. So, at a basic level, you should review your state’s laws to ensure you purchase the minimum coverage required. Liability insurance may be all you need if you have an older car. But if you have a new car, full coverage might be worth considering.

There is also the task of buying the right coverage that will benefit you in the aftermath of a car accident. So take a moment to consider what additional coverage you want or need, such as your vehicle type and other factors, like your car’s age, replacement cost, and how much money you have saved up for repairs in case of an accident or theft, etc.

Read more:  Can I change my car insurance coverage at any time?

Consider Different Types of Auto Insurance Coverage

Once you’ve determined how much coverage you need, you must understand the different types of auto insurance coverage available.

Liability insurance typically covers bodily injury and property damage that you may cause in an accident, while comprehensive and collision coverages protect your vehicle from repair costs if damaged or stolen.

In addition, most states require drivers to purchase uninsured/underinsured motorist protection, which pays for medical bills if another driver does not have enough coverage to pay for them.

Assess Refunds and Cancellation Fees

When switching car insurance companies, paying attention to cancellation fees and refunds is important. In most cases, if you cancel your policy before the end of the term, you may have to pay a cancellation fee or forfeit any unused premiums.

On the other hand, if you switch providers after your policy is up for renewal and your current company has already charged you in advance, they may owe you a partial refund. To clarify, here is specific information about cancellation fees for some major car insurance companies:

• No fees: USAA and Geico.
• Undisclosed Cancellation fees: Allstate, State Farm, Liberty Mutual, Farmers, Nationwide, Travelers, and American Family
• Disclosed fees: Progressive (up to 10% of remaining premium)

Read More:

• What is the process for renewing my car insurance policy?
• How can I cancel my car insurance policy with Farmers Insurance?
• What is the process for canceling my car insurance policy with Nationwide?
• What is the process for canceling my car insurance policy with State Farm?

Shop Around for Different Car Insurance Quotes

When you are ready to switch your car insurance company, shop for different quotes and compare the coverage levels, discounts, deductibles, and premiums each provider offers.

Average Annual Car Insurance Rates Based on Coverage Type

Companies	Average Annual Rates for Low Coverage	Average Annual Rates for Medium Coverage	Average Annual Rates for High Coverage
	$4,628.03	$4,896.81	$5,139.02
	$3,368.49	$3,544.37	$3,416.40
	$3,922.47	$4,166.22	$4,494.13
	$3,001.91	$3,213.97	$3,429.14
	$5,805.75	$6,058.57	$6,356.04
	$3,394.83	$3,449.80	$3,505.37
	$3,737.13	$4,018.46	$4,350.96
	$3,055.40	$3,269.80	$3,454.80
	$4,223.63	$4,462.02	$4,619.07
	$2,404.11	$2,539.87	$2,667.92

You can use an online comparison tool to compare the prices of different providers quickly. However, it’s a good idea to get additional opinions from independent agents or brokers who work with multiple companies to find an auto insurance policy that best meets your needs at the most competitive price. (For more information, read our “What is the difference between a car insurance agent and a car insurance broker?“).

Avoid a Lapse in Coverage

When switching car insurance companies, purchasing a new policy before canceling your existing one is important. This will ensure that you do not have a lapse in coverage, which can result in higher premiums and difficulty finding new coverage. It’s also important to note that driving while your insurance coverage has lapsed is illegal and can have serious negative consequences.

Ensure Your Personal Information is Accurate

It’s essential to provide accurate information when obtaining your car insurance quotes so that the company can properly assess your risk level and determine an appropriate premium rate.

Finally, carefully review the terms of your policy before signing up for coverage and any additional documents that the state or insurer may require. This will help ensure you get all the benefits and protections in your policy.

How to Find the Best Car Insurance Rates for Your Driving History

Finding affordable car insurance can be challenging if you have a less-than-perfect driving record. The trick is to shop around and compare the different companies to find the one that offers the most competitive rates for your situation.

For example, some insurers may offer car insurance discounts or lower premiums if you have taken a defensive driving course or are a student with good grades. Other companies may provide discounted rates for members of certain groups, such as military personnel or law enforcement officers.

Finally, make sure you do some research on the company’s financial stability before signing up for their policy. For example, check ratings from independent agencies like A.M. Best or Moody’s and make sure they are financially stable and have enough money to pay out claims.

Why change your car insurance company?

Ultimately, switching car insurance companies could lower your monthly payments. Still, some people may not be inclined to dump their previous car insurance company to save money on premiums. With that said, consider switching your auto insurance company in certain cases.

You Moved Somewhere Else and Now Pay Higher Premiums

Your ZIP code influences car insurance rates. Therefore, it could be worth switching if you move to a different area and your current company’s rates are higher in that location than other companies.

You Are Unsatisfied With Customer Service or Policy Offerings

Your current car insurance company might not offer the added benefits you want or need. Or maybe they don’t provide quality customer service or have too many restrictions on when and where you can drive with their coverage. In this case, it may be worth switching to an auto insurer that meets your needs better.

Your Current Policy Does Not Cover New Additions to Your Car

If you’ve recently added a new accessory to your vehicle, such as an expensive navigation system, and your current policy doesn’t cover it, you may want to switch insurers. Most companies offer customizable policies that allow you to add coverage for various items.

Your Premiums Have Gone Up Significantly

If your auto insurance company has recently raised their rates and the increase is too much for you to pay comfortably, it might be time to shop for a better deal.

You Bought a New Car

When you get a new car, your insurance premiums might change. Your current policy may not meet all the requirements for your new car. Finding a policy that covers your needs properly and at an affordable rate is better.

Your Teen Got Their Driver’s License

Having an inexperienced driver on the policy will significantly increase your premiums. If you’ve recently added a youngster to your policy, it could be worth shopping for a new car insurance company.

You Bought a Home or Got Married

Your marital status and home ownership can influence your auto insurance premiums. If you’ve recently gotten married or bought a house, it could be worth checking out other car insurance companies for a better deal.

Read more: How To Correctly Update Insurance After Getting Married: An Expert Guide

You’re Driving Less Because of a New Life Situation

If you’ve recently gone from working full-time to part-time, or if you’re now working from home, your vehicle will likely be less used. On the other hand, you could qualify for lower insurance premiums with another company, so it might be worth shopping around and comparing rates.

Your Credit Score Has Recently Decreased

Your credit score can significantly impact your car insurance premiums. Suppose your credit score has recently declined. In that case, it could be worth switching to a company that offers better rates for your particular credit score.

Read more: How often should I review and update my car insurance coverage?

How do car insurance companies set rates?

Car insurance companies set their rates based on various factors, such as the type of car you drive, your age and driving history, where you live, and even your credit score. Let’s discuss each of these factors in detail.

• Type of car. The type of car you own can affect your insurance premiums. Insurers typically assign higher rates to cars that are considered high-risk or have a greater tendency to be stolen.
• Age and driving history. Your age and driving history impacts the rates you pay for auto insurance. Generally, younger drivers will pay more than older drivers with good driving records.
• Location. Where you live can also influence the rates car insurers offer you. Insurance companies use factors such as crime rate, frequency of claims in an area, and even the number of uninsured drivers to determine premiums in certain locations.
• Credit score. Generally, those with lower credit scores will pay more for car insurance than those with higher credit scores.

Because each company uses different criteria to determine premiums, it is important to compare different insurers before settling on one. As noted previously, many insurance companies offer discounts for drivers who meet certain requirements, such as having a clean driving record or taking a defensive driving course.

By taking the time to shop around and compare auto insurance policies before committing to one provider, you can save money in the long run.

When can you switch your car insurance company?

You can switch to a new car insurance company at any time, for any reason. The most common reasons for switching providers include getting a better rate, improved customer service, or simply wanting to try something different.

Before switching companies, however, it’s important to ensure the new policy meets all your requirements and covers everything you need at a price that fits your budget.

It’s also wise to stay informed about state laws regarding cancellation fees and other related information so you don’t pay more than necessary.

Is there any time you shouldn’t switch your car insurance company?

While there is no specific time you shouldn’t switch car insurance companies, it’s generally a good idea to avoid switching during an active policy period.

If your current policy is nearing its end, you should be fine to make the switch. However, if you are still within the active policy period, most companies will charge a cancellation fee for ending the contract before its term has expired.

Additionally, some companies offer discounts or rewards when renewing your policy with them year after year, so it may be beneficial to stay with the same provider if they offer these perks.

Finally, avoid switching your car insurance company during an open at-fault claim. In this case, it is better to wait until the claim is closed before switching providers.

Case Studies: Car Insurance Change Scenarios

Case Study 1: The New Car Owner

John recently purchased his first car, a brand-new sedan. He realized that his current car insurance policy might not provide adequate coverage for his new vehicle. After conducting thorough research, John decided to switch to a different car insurance company that offered comprehensive coverage specifically tailored to his needs as a new car owner.

This case study explores the steps John took to evaluate his coverage requirements, compare different policies, and ultimately switch to a new provider that offered better protection for his valuable asset.

Case Study 2: The Dissatisfied Customer

Sarah had been with the same car insurance company for several years, but she became increasingly dissatisfied with their customer service and policy offerings. She encountered numerous restrictions on her coverage and felt that her current provider did not value her as a customer.

In this case study, we delve into Sarah’s journey of seeking better customer service and policy options. We explore how she researched different companies, sought recommendations from independent agents, and ultimately made the decision to switch to a new car insurance provider that aligned with her expectations.

Case Study 3: The Budget-Conscious Driver

Mark had been facing financial difficulties and noticed that his car insurance premiums had significantly increased over time. The rising costs became unsustainable for his budget.

In this case study, we follow Mark as he explores various options to find more affordable car insurance rates. We examine how Mark compared quotes from different providers, looked for potential discounts, and ultimately switched to a new car insurance company that offered better rates without compromising coverage.

The Bottom Line on Changing Car Insurance

Switching car insurance companies can be a great way to save money and get better coverage. However, it’s important to ensure you understand your policy’s terms and shop around for different quotes to find the right provider for your needs.

Additionally, remember to factor in cancellation fees, refunds, discounts, and other factors when shopping around. By taking these steps and following this guide, you can easily switch providers and start saving money on car insurance today.