Having car insurance is a requirement in many states and can help you protect yourself and your property, as driving is inherently risky. Though you may have to get car insurance, you want to get a policy through a company that you feel has your back and can help you in the unfortunate event you need their help due to an accident. Plus, you want coverage for your specific needs, lifestyle, and budget. Given these factors, at some point, you might consider switching car insurance providers and trying out something new. You might have a big life change like a cross-country move, a marriage or divorce, or have an unpleasant experience with your current car insurance company and decide you want to take your business elsewhere. Learn how to switch car insurance and what to know about the process.
Step 1: Research car insurance providers
If you’re thinking of switching car insurance providers, before making any moves ease into the process and do your due diligence. That means researching car insurance providers to see what’s out there.
You can look at their websites, social media, and the Better Business Bureau. You can also look at the National Association of Insurance Commissioners (NAIC) website and use their Consumer Insurance Search tool to see various reports about your potential car insurer. That way you’re armed with knowledge and know which car insurance providers make it to the next round.
Step 2: Review your coverage needs
Most states have minimum liability insurance requirements to drive on the road. But notice the word minimum. That’s just the basic coverage. But there are many different types of auto coverage, from liability only to collision insurance and comprehensive insurance.
The less insurance coverage you get, the less expensive it’ll likely be, but you’ll be more at risk financially. The more insurance you get, the more expensive it’ll be but you’ll be more protected in a variety of situations. Consider your needs and what type of policy might be the best fit.
Step 3: Consider pay-per-mile coverage if you don’t drive a lot
You might look into traditional auto insurance coverage, but you don’t want to miss out on pay-per-mile coverage if you don’t drive a lot. Many people have made the switch to working from home, slashing their commute time and related costs.
If that’s you, consider pay-per-mile coverage if you drive fewer than 10,000 miles each year. Metromile offers this type of insurance which could save you up to $947* per year. Rates begin at $29 per month, plus a few cents for every mile you drive.
Step 4: Shop around for car insurance quotes
After researching on car insurance companies and assessing your coverage needs, it’s time to look at the numbers.
Shop around and get car insurance quotes with multiple car insurance providers. Review rates, coverage options, and terms and conditions. Also, see if you qualify for any potential discounts. Get at least three car insurance quotes, so you have enough options to compare.
When shopping for car insurance and getting quotes, select the same type of coverage for each, so it’s an accurate comparison. During this process, you’ll typically need to provide your zip code, VIN, driver’s license, and information about the type of vehicle you want to insure.
If you see better rates at another car insurance provider but are unsure about switching car insurance, you can contact your current insurer to see if it’s possible to get a better rate or qualify for a discount.
Step 5: Look into potential cancellation or other types of fees
Before switching car insurance providers, contact your current car insurer to see if there will be any consequences.
For example, if you cancel your current car insurance policy in the middle of your coverage term before the renewal period, your insurer may tack on a cancellation fee. They might not, either, but you want to know what you’re getting into before making any moves. No one likes a surprise fee (The good news is that Metromile doesn’t charge any cancellation fees).
Also, ask how much notice they require to cancel and keep a paper trail of your communication, so you’re all set.
Step 6: Get a new policy with the new insurer
The next step is to get a new policy with the new insurer. Ask the company when your policy will start and when you’ll receive your car insurance cards.
Switching car insurance can be a good move in a various circumstances, but it’s also a delicate dance as you must avoid any lapses in car insurance coverage to avoid trouble.
If you have a lapse in coverage, you could be considered a risk, even if it’s unintentional. On top of that, you could be hit with fines or even get your license suspended. And you don’t want to imagine getting into an accident if there is a lapse in coverage.
So while getting new coverage, make note of the start date. Then, make sure you cancel your old coverage, and it lines up with when your new coverage starts.
Step 7: Officially cancel your old car insurance policy
After starting your new insurance coverage, make moves to cancel your old car insurance policy. Again, make sure there is absolutely no lapse in coverage at all.
Get it all in writing. Your car insurer may have its own process to cancel coverage, so follow their recommended steps.
After canceling your old policy, keep the paperwork for your records. Also, make sure you have the new coverage in place and your car insurance cards are in your wallet so you’re prepared and covered while driving.
When is the best time to switch car insurance companies?
Switching car insurance providers requires a bit of research and work, but can make sense in certain situations. Here are some of the best times to make the switch:
- You have a life change or a lifestyle change, such as a marriage or divorce or going from commuting to working from home.
- You have moved. Whether it’s in the same city or state or out-of-state, moving can affect your car insurance premiums.
- You’re unhappy with your car insurance provider. Like any relationship, the value you get should be more than the cost. If you’re dissatisfied, switching car insurance providers can be a good idea.
- You’ve added a car or a new driver to your policy. This may change your risk profile and can affect your premium.
- Your car insurance premiums have skyrocketed. If your rates have exploded due to a speeding ticket or accident, shop around.
Is switching car insurance possible with an open claim?
If you have an open claim with your current car insurance provider and are thinking of switching car insurance, it’s best to hold off.
While it may be possible to make the switch, it’s not a great idea. Filing a claim typically comes with an increase in costs at the time of renewal, if you’re found at fault. So making a switch during that process, may mean paying more sooner. Also, getting your claim taken care of can take time, and it may be messy to make the switch mid-way.
Can I get a refund if switching car insurance before the renewal period?
You might wonder if you can cancel car insurance at any time. The good news is you can. If you’re canceling and switching car insurance before the renewal period, you’ll likely get a portion of your premium refunded to you. There may be additional fees tacked on, but you are eligible for a car insurance premium refund before your term is up.
The bottom line
Sometimes change is a good thing and the same is true when switching car insurance. If you want to figure out how to switch car insurance and take the appropriate measures, follow these seven steps to get started. If you’re unhappy with your car insurance rate and are a low-mileage driver, it’s time to rethink your auto insurance. Stop paying for miles you aren’t driving and pay based on how much you do actually drive through pay-per-mile insurance. Check out coverage options and potential rates with Metromile.
Melanie Lockert is a freelance writer, podcast host of the Mental Health and Wealth show, and author of Dear Debt. She’s a cat mom to two jazzy cats, Miles and Thelonious, an amateur boxer, music lover, and needs coffee to function.
* Average annual car insurance savings by new customers surveyed who saved with Metromile in 2018.