How to Switch Car Insurance Companies in 5 Steps
When your auto insurance premium comes due, you may be wondering if you could get a better deal elsewhere. Switching to a new car insurance company can be a good way to save you money and get you better coverage. Some companies even offer incentives to people who switch by giving them a discount. And, if your insurance policies are all spread across different companies, it might be a good idea to switch them all to the same one to snag a multi-policy discount.
We’ll cover the steps you need to take to easily switch car insurance companies and help you figure out how to cancel your current one.
5 Steps to Switching Car Insurance Companies
Switching car insurance is pretty simple once you know the right steps to take. Here are our tips for swapping auto insurance companies:
1. Shop around
Check out a few different car insurance companies and request quotes. Keep any quote information you get handy for the next step.
2. Compare quotes
Using the quote information you requested, compare pricing and coverage policy features. Sometimes the cheapest option isn’t always the best one, so make sure the policy coverage and limits you’re looking for match and possibly improve what you need for your vehicle.
3. Contact your old insurance company
You can give your old insurance company a chance to change, if you like. They may be willing to help you find discounts and policy coverage improvements on your insurance if they know you might cancel your policy.
4. Apply with the new insurance company
If your old insurance company won’t budge and you found a better company with better rates and coverages, apply for the new car insurance policy. You’ll be able to get your new effective date, which will help with the next step.
5. Cancel your old insurance
Give your old car insurance company a call or start the process online. Make sure you tell them to cancel your policy on the same day your new one starts so you have no lapse in coverage.
Why Switch Your Auto Insurance Company?
You may be wondering why you would even want to switch car insurance companies in the first place, but there are a few good reasons you’ll want to consider it.
Good times to check for a better car insurance option
Shopping around for a new auto insurance company can be a good idea depending on your personal circumstances. Situations that might make it the right time to switch could be:
- A teenager getting their driver’s license
- If you’re planning to buy a new car
- If you’re moving to a new state
- When your policy renewal date is close
Adding a driver or vehicle to your policy can change your premium rates, so it can be smart to consider a new auto insurance company to see if you can get a better deal. Moving to a new state can cause your car insurance requirements to change, so finding a new company with better coverage options or lower premiums can be helpful. And if your policy is renewing soon, you may be better off switching companies then to avoid any cancellation fees.
Bad times to check for a better car insurance option
Sometimes switching car insurance companies isn’t a great idea. Here are a few scenarios in which you’d be better off sticking with your current insurance:
- If you’ve recently been in an accident
- You’ve recently picked up a traffic violation
- Your policy just renewed
Accidents and traffic violations can cause your premium rate to rise, and a recent accident on your record will make it more difficult to pay less for auto insurance should you switch companies. And if your policy’s just been renewed, you may be subject to early cancellation fees.
Can You Cancel Your Insurance Policy at Any Time?
Typically, you can cancel your car insurance policy at any time, but you may have to pay cancellation or other types of fees to end your contract before its renewal date.
How to Cancel Your Old Car Insurance Company’s Policy
Typically, you’ll have to call to cancel your old insurance. You’ll want to ask about cancellation requirements, like if you need to put it in writing as well as telling them over the phone, and if there are any fees for canceling.
To cancel your policy, there are a few things you’ll need to provide, including the end date of the old insurance policy — this will be the effective date of your new insurance policy. So, if you’re buying new auto insurance with an effective date of April 4, tell your old auto insurance to cancel your original policy effective April 4.
Sometimes, you’re eligible for a refund of premiums paid on a policy before its term ends, so if you cancel in the middle of the policy’s term, you can get back the money you already paid on it.
Looking to switch car insurance companies? Get in touch with your American Family Insurance agent to see what discounts and additional policy coverage improvements you can get for switching to American Family’s auto insurance plans. They’ll also help you figure out how much and what kind of coverage you need to help protect what matters most.