Whether you want to adjust your current car insurance policy because your coverage needs have changed or you want to switch insurers to save money, most companies make it easy to do so. Here’s what to know before you change your auto insurance policy.
Yes, in most cases you can change your auto insurance policy whenever you want – you don’t have to wait until the policy renewal period. To make changes to an existing policy, such as adjusting your current coverage limits or adding a teen driver, all you need to do is call your insurer’s customer service number or speak with your local agent. In most instances, any policy changes will take effect immediately, although you will be required to pay for any resulting increase in your premium upfront.
You can also switch car insurance companies at any time. Many insurers will allow you to cancel your existing policy for free, but some do charge fees. Check with your current insurance company to find out if you would be subject to any such changes. If your motivation is to save money, you may be able to do so simply by adjusting your current policy – such as raising your deductible or lowering your coverage limits.
Even if you’re in the middle of an insurance claim, you can switch your insurance policy. However, your open claim must remain with your current insurer. Therefore, you will have to continue to navigate the claim process with your original auto insurance carrier. Remember, if you choose to go with another carrier during an open claim, make sure you’re up-to-date with all payments and following the claim-filing rules.
When Should I Change My Auto Insurance?
As the seasons of life change, so may your car insurance needs. That’s why it’s important to review your insurance policy regularly to ensure it still meets your coverage needs. Whether it’s fine-tuning your current policy or shopping for a different provider, reasons to change your car insurance include:
- You’re getting married. If you and your partner both own a car, it may be cheaper for you to insure both vehicles on the same policy instead of maintaining separate policies. You may be able to see additional savings by bundling your car and home insurance.
- Your car is getting older. It may not make financial sense to carry full insurance on an older vehicle, especially if the vehicle’s book value is very low.
- You’re moving. Whether your new home is across town or across the country, your address is a major factor in determining your insurance rates. Related factors, such as whether you have a garage or must park on the street, can also affect your premiums.
- Your teen received their driver’s license. It’s no secret that insurance premiums for teen drivers are higher than for older drivers. But if your teenager has started driving, it will probably be cheaper to add him or her to your existing car insurance policy than it would be for them to be insured separately. Many insurers offer discounts on car insurance for teens if they get good grades or leave the car at home while they’re in college.
- You’re retreating. Senior drivers enjoy some of the cheapest car insurance rates on average. And if you’re no longer commuting to work on a daily basis, you may also be able to save with a low-mileage insurance policy.
- You want to lower your premium. Switching insurance companies could help you save money. Comparing quotes from at least three insurance companies is recommended by the Insurance Information Institute.
- You’re unhappy with your current insurer. Cost isn’t the only reason why people switch car insurance. Customer service and claims handling are two other factors than we consider in our Best Car Insurance Companies of 2022 ratings.
When (or if) you decide to switch carriers, you should first review your current policy and see if there is a fee for canceling before the renewal period. This way, you can avoid any surprise charges. Following a few steps can help streamline the transition between insurance companies.
- Gather the relevant documents. This includes your current policy details, your driver’s license, and the vehicle identification number (VIN) of all cars you want to insure.
- Shop around. You’ll want to auto compare policies before you jump ship to a new auto insurance company. While price is an important factor, make sure you know the coverage details of your policy (ie, deductibles, types of coverage, and coverage limits), so you can make an apples-to-apples comparison. Forgoing certain coverages may cut your insurance cost, but it can also minimize your coverage. In other words, you may have to pay more out-of-pocket if you get into a collision or your vehicle is damaged.
- Select and enroll in a new policy. Once you identify suitable coverage and you’re happy with the rate, it’s time to enroll in your new policy. Before you terminate your original policy, you will want to ensure the new policy is active. Not doing so could cause a lapse in coverage, which could impact your rate. Also, get a copy of your new insurance card. Some companies let you instantly access your card through their mobile app, making it simple to provide proof of insurance.
- Let your lenders know. If you’ve financed or are leasing your current vehicle, you’ll need to notify the lender or lessor.
- Cancel your old insurance policy. After verifying your policy is active, you can cancel your current policy. Depending on when you cancel, you might be entitled to a refund for the coverage that went unused.
Although many insurance companies let you cancel at any time, some may apply a cancellation fee if you leave mid-way through your policy. For this reason, you should speak with your current insurance company to review the terms and conditions of your policy so you can avoid unexpected charges.
Having a new policy in place before canceling the old one is crucial for preventing a coverage lapse. Since auto insurance is mandatory in almost every state, not having coverage isn’t taken lightly. A lapse in coverage can lead to consequences, such as a rate increase, license suspension, fines, or repossession of your vehicle. If you get in an accident without insurance, you’ll also be on the hook for any expenses resulting from damages or injuries you’re held liable for.
Depending on when you cancel your current policy, it’s possible to receive a prorated refund. For example, if you pay your annual premium upfront and decide to switch four months in, you’ll receive a prorated refund for the coverage that you didn’t use.
Switching car insurance companies won’t impact your credit score. Since insurance providers don’t report your payment history to the credit bureaus, policy activity won’t show up on your credit history. However, your credit score can impact the price you pay for coverage. Most insurance providers use your credit-based insurance score, which factors in your credit history when calculating your rate.
You have the right to swap insurance companies at any time, even after an accident. But, remember, depending on the severity of the incident and your driving record, your insurance rate can increase. When unwriting your policy, insurance companies usually look back at the last 3-5 years of your driving record. As a result, an accident could translate to a higher rate with a new insurance company.
Learn More
For more information about auto insurance, see the following guides:
Other Ratings from 360 Reviews
For more information on other types of insurance, see the following guides:
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