How to Switch Car Insurance and When to Do So

You probably have thought about switching your car insurance because you have moved to a new state, purchased a new car, or you have resorted to driving less due to the pandemic that has hit the world. In either of the above circumstances, changing your car insurance company might be an excellent idea.

The good news is that switching your car insurance policy is fairly simple. However, finding the best alternative car insurance company can be a hassle. You’ll have to research some of the best car insurance companies in your state, and compare various rates to ensure you’re getting the best deals.

In this post, I’ll through how you can switch your car insurance, the circumstances under which a switch in your car insurance will make sense, and many more. Let’s cut to the chase.

When Should I Switch My Car Insurance?

You’re probably wondering when is the best time to switch your car insurance company. While there’s no specific time to change car insurance agencies, some ideal times are worth considering. Below are some of the best times to take a step.

1. When you need to reactivate your policy

One of the best times to switch car insurance is upon the expiry of your current policy. This provides you the flexibility to leverage your current policy while comparing it to other policies based on their services, coverage, pricing, etc.

By getting a new car insurance agency when your current policy is up for renewal, you’ll be saving on cancellation fees resulting from switching your policy before the end of the year.

If you’re planning to cancel your current policy before its renewal, please call your current car insurance provider and inform them of your plans. They might concur with your policy terms and even offer you a lower premium.

2. When the premiums have shot

Let’s get honest. No one loves fluctuating car insurance premiums. Although it’s natural for car insurance premiums to increase when you’re involved in an accident, random shots can be disheartening.

Sadly, some insurance agencies will intentionally hike premium rates to leverage your tolerance towards the rising prices. In case you experience such a scenario, it’s time you resort to a better car insurance agency.

Meanwhile, it would help if you learned to resist these random premium hikes to enhance your chances of finding an affordable policy.

3. When things change

More often, your insurance premium rates will fluctuate due to changes in your lifestyle. Such include:

  • Purchasing a brand new car
  • Incorporating a new driver to your car insurance
  • Relocating to a different country
  • A shift in marital status.

Inform your current car insurance company about these life changes and see how they will affect your premium rates. If these circumstances don’t affect your rates, it’s time you leverage similar policies comparing their services, prices, coverage, and more.

4. When your insurance company always disappoints you

There are tons of ways that your car insurance company can be disappointing. Regardless of the reason, if your car insurance agency isn’t up to your needs, it’s worth considering shifting to a new one.

How to Switch Your Car Insurance

1. Know why you should switch

Most people consider shifting to a new insurance company to save on money. While this is the primary reason, many factors are worth considering when switching policies. First of all, have a goal, which includes cutting on costs or finding better coverage up to your expectations. If your plan incorporates both reasons, consider finding a car insurance policy that best meets your needs.

2. Decide whether the timing is right

Depending on your state, auto policies will remain relevant for at least six months or even a year. So the best time to gauge what other policies offer is upon relocating to a different state. Make sure you know your zip code, the distance you intend to drive to and from work to help the new insurance company leverage your premium rates.

Also, consider looking at insurance alternatives and other life events like marriage because married people tend to receive lower premium rates.

If your primary reason for relocating is because you bought a new house, you can bundle your home and auto insurance for a better value of money. Upon bundling multiple policies, rest assured of significant discounts.

Sadly, it’s not a good time to switch when you still have pending claims with your current policy. This is because insurance companies often calculate your rates upon renewal. And by changing to a new policy, the insurance company might impose higher premium rates than it would have been with your current insurance provider if you had prolonged your stay.  

3. Try negotiating a discount

Special discounts are only available to specific individuals. If you renew your policy on time and observe your policy, your current insurer will gladly impose discounts for your policy renewal and maintenance. If your current provider isn’t willing to offer discounts on your payments, confront them on competitors’ rates. Reputable insurance companies will always provide significant discounts to long-term customers, especially those with clear driving records.

Fortunately, some insurance companies like Liberty Mutual offer discounts to its long-time customers with coverage of up to three years. What’s more, these discounts can last up to 30 days if you rarely use your car. 

4. Know if you qualify for a refund

Before you decide to switch your car insurance company, it is essential that you know whether or not you qualify for a refund. Most car insurance companies will issue a pro-rated refund if you choose to cancel your insurance policy.

Likewise, some will issue a refund for the remaining months if you had paid your yearly premiums without a protest. If you are unsure whether or not you can qualify for a refund, ask your car insurance provider if they have search terms in their agreement.

5. Check if there are any penalties

Changing your car insurance company might come with some penalties. And because you’re probably switching your car insurance policy because of high rates, you’d not want to be slapped with another penalty. That’s why you must inquire from your car insurance provider if there are any penalties involved.

Fortunately, most car insurance companies are comfortable to offer a refund for your unused payments if you give them a notice before your cancellation.

Car insurance companies like USSA, Geico, State Farm, among others, will be happy to give you a refund for the months you didn’t get their services. However, some insurance companies such as Ensurance may charge you up to $50 if you opt-out before your policy expires.

If you realize that your insurance company will charge you for opting out before your plan expires, it would be best to do some math and determine if it would be economical from your point of view.

6. Research and compare rates

Switching your car insurance company is not a walk in the park. You need to ensure that you’re getting the best deal. And to do that, you need to research and come up with better car insurance companies that conform to your needs.

There are different ways you can find the best car insurance companies. A simple Google search will generate you a ton of decent results you can choose from. Secondly, you can check out car insurance company reviews and decide which one is best for you. Friends and relatives can also be quite helpful in recommending some of the best car insurance companies they have tried.

Finally, consider the most important thing – the car insurance rates. Because you probably opted out from your previous car insurance company because of high rates, you probably would love to secure a better deal upon switching.

Frequently Asked Questions

1. Is it a good idea to switch auto insurance?

Yes, switching your car insurance company can get you better rates, discounts, and perks. Changing your insurance provider can make a lot of sense if there are activity changes in your regular schedules, such as driving less, purchasing a new car, or moving to a new state.

2. How do I switch my insurance from one state to another?

If your work environment has changed, you will probably move to a new state. If that’s the case, below is how you can switch your car insurance company to another:

  1. Start by completing your move to the new state.
  2. Get a new car insurance policy in the new state.
  3. Register your vehicle in the new state you’ll be residing.
  4. Get a new license for your car in the new state.

3. Does changing auto insurance affect credit?

No, changing your car insurance won’t affect your credit score. Feel free to switch your car insurance company without worrying about the nature of your credit score.

4. What happens if I want to cancel my car insurance?

You can always cancel your auto insurance between the first and the 14th day of acquiring it. If you do this, you’ll get a refund for the premiums you paid. Now, different car insurance companies have other terms of agreement. Be sure to check what their terms state.

5. Can I cancel my car insurance if I pay monthly?

Yes, you can also cancel your auto insurance, just like you’d cancel any other car insurance policy. However, you will end up paying more fees because your insurance company always covers you for 12 months while you pay the premiums in installments.

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