How to switch car insurance

There are many reasons to switch insurance companies. If you move, get a new or used car or have a teen driver coming onto your policy, it’s a good idea to review your insurance to see if switching car insurance might be a good idea. The same is true if you have a claim denied, or if your premium rates are raised.

Even if there have been no changes in your life or your policy, we suggest you review it regularly — about every six months. Read your policy through so you know what it covers, look at what you’re paying and obtain a few free online quotes to see if you can get a better deal. This may seem like a tedious process to go through regularly, but the end results make it worthwhile because you can save significantly and may even be able to afford a higher level of coverage if you move to a new company.

If you are wondering how to change car insurance, we’ll walk you through the process of exploring a policy change and the steps that you’ll need to take to do so. It’s not hard, but there are a few things to be aware of.

When should I change my auto insurance? 

It’s a good idea to always be open to the idea of switching car insurance to gain a better premium cost or improved coverage or service. Here are some times you should consider it:

  • Every six months: To ensure you’re on top of all the factors that your insurer considers in determining your policy, evaluate your policy twice a year. For example, you may reach the point with an older car where it makes sense to eliminate collision coverage because the cost to fix the car would be more than the car is worth. 
  • When you move: Your premium rate is based partly on the risks inherent in your area. Moving from the city to the country, for example, might save you money because there are fewer accidents in rural areas. 
  • When your child reaches driving age: When you add a teen driver to your policy, your rates will, unfortunately, go up. Some insurers offer discounts for teens who are good students, away at college or who are willing to let you use telematics to monitor your driving in real-time. 
  • When a claim is denied: This may leave you feeling that your insurer isn’t as supportive of you as it should be. A different insurer may offer better customer service and a more liberal practice for meeting claims.
  • When your insurer raises your rates: You want to pay the least possible amount for the best possible coverage. It may pay to shop around and get quotes from other companies to find out if you can get a better rate.
  • If you are suddenly driving fewer miles: If you’ve retired or changed jobs for something that is closer to home, you may be eligible for discounts or lower premiums because you are driving fewer miles each month. Many insurers now offer low-mileage coverage designed for seniors and others who drive less than average.

If you fit one or more of these categories, you might want to look into how to switch car insurance. 

Of course, you want to be sure you are meeting your state’s minimum car insurance requirements, but you may be carrying more insurance than you need. Conversely, if you are able to find a cheaper rate than you are currently paying, you could increase your coverage levels to provide additional protection in the case of an accident. It helps to find a knowledgeable agent who can outline the pros and cons with you.                  

Can I save money by switching insurance carriers? 

Yes, you often can. Every insurer uses its own proprietary formula for determining rates. You may be looking at exactly the same coverage from three different insurers, and you will find three different premiums offered. Even if they are looking at the same variables — such as your driving history, the make and year of your car and your location — they place different values on each of these factors and come up with different premiums. 

What this means for you is that if you’re not completely happy with your insurer — or even if you are — you may find a better fit for your needs when you switch insurance companies. If anything at all changes in your life, it pays to explore the potential savings you may get from it. 

One example of this would be buying a home. You might not think that buying a home is related to your car insurance, but it is if you consider the benefits of bundling your car insurance along with your new homeowner insurance policy. By switching your car insurance to the company that insures your home, you will probably be eligible for a discount for both policies.

What to consider when switching carriers 

Discount options

If you’re new to the whole business of insurance, one thing that’s important to consider is discounts. Most insurance companies offer a variety of discounts related to things like your personal and driving history and your car. Common ones include:

  • Discounts for safety features, such as anti-lock brakes
  • Anti-theft discounts
  • Multiple policy discounts if you have more than one policy (homeowner, life, renters, etc.) with one company
  • Early signing and online purchase discounts
  • New car discount
  • Automatic online payment discounts
  • Safe driving discounts if you use telematics, which requires you to install a small device in your car or download an app that monitors your driving to see if you drive safely.
  • Student discounts if you attend college away from home, have a good grade point average or have completed a teen driving education program
  • No-claim discounts if you have not made a claim on your policy within a certain time frame.

By utilizing all the discounts that are available to you, you may lower your premium considerably.

Assessing your current coverage

Another factor to consider when switching carriers is whether you truly need all the coverage you have. If you can eliminate a type of coverage, you will lower your premiums. At the same time, when you are thinking of switching carriers, you should also think about whether you have enough coverage.

Your state only mandates that you have liability coverage to cover the damage to other cars, which is called liability coverage. Two types of coverage that are not mandatory but may be lifesavers in the case of an accident are collision and comprehensive:

  • Collision coverage: This add-on will repair or replace your car if you are in an accident with another car or cars or if you hit a stationary object like a fence or light post. Collision is important if you have a newer model car. If your car is older, you may want to consider eliminating it from your policy. Consider one example: if you’re driving a 12-year-old junker that is only worth about $1,000 and you’re in an accident that causes $2,000 worth of damage to the car, your collision would only cover half the damages — or less when you consider the deductible. You’d be better served to save the premium costs and use them as a down payment on a newer model car.
  • Comprehensive coverage: This pays for anything that is not directly related to an accident. Storm damage, vandalism, theft, animal damage, broken windows and other similar accidents would be covered under comprehensive. Like collision coverage, it’s not mandatory. But if a tree falls on your car during a storm, for example, you’d be liable for the costs yourself unless you have comprehensive coverage.

For the most protection for your car, you may want both types of additional coverage.

What not to do when switching carriers

When switching insurers, there are a few things that are important to monitor. First, you’ll want to check with your current company and find out if there are cancellation fees. Not all insurers have them, but if so, that is an added cost to switching carriers.

Second, make sure your new policy is active before you cancel your old one. This may involve a call to your agent, but it’s worth it because you don’t want there to be any time when you are not covered. A lapse in coverage can be a disaster if you happen to have an accident during that time. 

The takeaway

If you need to know how to switch car insurance, our review gives you the most important things to consider. As a consumer, it’s your right to choose your own auto coverage — and to be able to choose the company that will give you the most effective coverage for the least outlay of money. You want good customer service, quick and efficient claims management and a company that is financially sound. To manage all that, it’s important to review your coverage and make changes when necessary.

Switching car insurance companies isn’t hard, and there is no damage to your credit rating by doing so. If you’re willing to put in the time to study your current policy, gather some additional quotes and talk to an agent or two, you can save a considerable amount of money and purchase the best possible auto insurance coverage for your dollar.