Switching auto insurance companies is easy and people do it all the time. However, it’s a good idea to speak with your current insurer and see if there are any cancellation fees. If you tell your insurance agent that you want to cancel, they may also offer to seek additional discounts or offer you a lower rate.
When You are ready to start looking for new coverage, here’s what to do.
1. Shop
The first step to changing auto insurance companies is to shop around for a better rate. We recommend that you compare rates from at least three providers. An easy way to do this is to use a quote comparison tool. This way, you only have to enter your information once to see many options.
When shopping, consider suppliers who have car insurance discount applicable to you. For example, State Farm offers a student discount of up to 25%, which is better than the student discount of any other top provider. Also consider usage-based insurance or pay-per-mile programs if you want to save money based on your current driving habits.
Once you’ve identified a few preferred vendors, research each company to learn more about their customer service and complaints experience. We recommend reviewing studies such as the JD Power 2022 US Insurance Shopping Study℠ and the 2022 JD Power U.S. Auto Insurance Study℠. You can also check out online scores from the Better Business Bureau, the Complaints Index from the National Association of Insurance Commissioners, and financial ratings from AM Best.
2. Buy the best font
The next step is to purchase the new plan. If your current auto insurance policy is about to expire, schedule the new policy to start at least one day before your current coverage expires.
This will avoid a break in coverage. A gap of as little as one day can increase your car insurance premiums in the future, as insurance companies consider you an uninsured driver for that period. It’s better to have two car insurance policies for a day than none at all.
If you change companies in the middle of a policy period, simply schedule the new coverage to start whenever you want.
Don’t forget to list your lender on your new policy if you have a car loan or lease. The lender is a loss payee, meaning they get paid first when your car is totaled if you still owe money. You will probably need to take out comprehensive insurancewhich includes collision coverage And Back to back insuranceif you have a car loan.
3. Cancel your previous insurance
Once you have your new insurance coverage in place, it’s time to begin the process of canceling your old policy. If you have any open complaints, please know that your former company will still be responsible for investigating and closing those complaints.
Call your auto insurance company and speak to an agent to cancel your coverage at least one day after your new policy begins. You can also schedule an effective cancellation date ahead of time so you don’t have to remember to call on that specific day. However, don’t stop paying for your old auto insurance policy without officially canceling it.
If you paid off your policy in full at the start of a period, you should get a refund for the unused portion. You might also get a small refund if you pay monthly.
4. Get your proof of insurance
The next step is to print your insurance ID or download an app to access it. Most states allow you to show a digital ID if you get arrested. However, be sure to save it locally for offline access so you can access it whether or not you have cell service.
5. Inform your lender
Finally, if you have a car loan or rental, you must immediately notify the lender of your new insurance coverage. Your lender would have been listed on your old car insurance, which means your old company notifies your lender of the cancellation. You should also have your lender listed on the new auto insurance policy, but it’s also a good idea to call the lender to make sure they have all the details for your new coverage.