Car Insurance

How To Switch Car Insurance

By Peter Mondrose Peter Mondrose is the Head of Insurance Content at Bankovia. He received his degree in Economics in 1998 and a second degree in Journalism in 2004 from the University of Chicago. Most recently he served as Head of Content at, and editor at 5 minute read

You have the option to switch automobile insurance carriers at any moment, but it’s crucial to study the fine print to avoid paying costs or facing other repercussions. Many people’s monthly budgets are severely strained by the high cost of auto insurance. According to the National Association of Insurance Commissioners, the average annual premium in the United States is more than $1,000.

Is it possible to switch vehicle insurance policies before my next renewal date if I’m not satisfied with my present policy? The answer to that question is generally yes, although there are a few exceptions. When considering upgrading your auto insurance policy, here are some things to keep in mind – and what you can do to make sure you’re getting the best deal possible.

A few things to keep in mind when switching auto insurance providers

Before terminating your existing policy and looking for a new insurance provider, take the following factors into account:

Cancellation fees

Your existing insurance provider may charge you a cancellation fee if you decide to terminate your policy before the end of your current term. Occasionally, a flat cost of $30 to $50 will be assessed. In rare cases, you may be liable to a “short-rate cancellation,” which is a penalty equivalent to a percentage of the remaining premiums.

To save money on auto insurance, you should take these costs into consideration when selecting whether or not to alter your insurance policy.

Switching insurance plans can save you $50 each year but the cancellation charge is $75, so it doesn’t make sense to do so until the end of your policy year. Keeping your current coverage in place allows you to shop around for the best prices on vehicle insurance, which you can then switch to when your current policy expires.

Grace periods

If you pay your vehicle insurance premiums on a monthly basis and decide to cancel before the due date, your insurer will provide coverage for you even though you haven’t paid for it.
That implies you owe the insurance company money for the service you received. You can’t claim insurance benefits yet refuse to pay the associated premiums. When calculating the cost of switching automobile insurance carriers throughout the course of a policy, including this potential charge.

Accidentally getting less coverage

Changing auto insurance policies can be more difficult than it appears since there are several variables that go into determining premiums. The number of drivers on your insurance, the safety features of your car, the area where your vehicle is stored, the number of miles you travel, your history of traffic offenses, and the types of coverage you purchase all have a substantial influence on premium pricing.

Because of this, it’s critical that you do apples-to-apples comparisons while looking for vehicle insurance. This means that you should shop around for the exact same type of insurance that you already have. Don’t forget to double-check that the information you’ve supplied about your driving habits and history is correct.

It’s possible to get insurance at a lower cost than you realize, but in reality, you’re getting less coverage. Even if another motor insurer offers a lower premium but a higher deductible of $1,500, the insurance isn’t necessarily cheaper if your existing policy has $500 in collision coverage. In fact, you’re putting yourself in a position where you might wind up having to shell out an additional $1,000.

Additionally, if you boost your deductible, your current insurer may lower your premiums, which might wind up being less expensive than the other company you’re considering.

Hidden fees

The amount of coverage per day provided by the rental vehicle insurance should be carefully examined in both your present policy and any potential replacement. In the event that something happens and your current policy doesn’t cover it, this coverage might come in handy. Even a few days of renting a car might wipe away whatever savings you’ve made.

There is a chance that you have a current insurance company that provides accident forgiveness for free, but the new company you’re contemplating charges an additional premium for the service. As a general rule, you don’t want to move from a plan with a cheaper premium on the surface to one with a much higher out-of-pocket cost in the event of an accident.

Coverage gaps

When you change car insurance coverage, it is critical that your new policy term begins exactly at the conclusion of your previous one. It’s best to avoid having a gap in coverage of even a day at all.

Insurance companies want to know that you’ve had continuous coverage, which is why it’s important to keep your policy up-to-date. With no policy in place, insurers will consider you a greater risk and hence raise your prices. This is true even if your insurance coverage was just interrupted for an hour or two.

Therefore, should you cancel your auto insurance policy prior to the renewal date?

To establish if it’s financially sound, you should weigh the aforementioned factors before canceling your current policy’s insurance coverage before its current term expires. Switching to a new car insurance company is a good idea if after considering all of your alternatives you are still certain that you need to make the change.

The fact that switching plans in the middle of a policy is difficult or expensive enough that you decide against it does not mean you are obligated to pay back the premiums you have already paid. With your current insurance, you have a number of options for saving money.
Insurance rates may be reduced by increasing your deductible, deleting coverage you no longer need, or simply contacting your current insurance provider and asking for a price reduction. You may be able to save a lot of money by combining your house and automobile insurance policies with the same company.

Staying with your existing insurer and waiting until your current policy’s renewal date will make switching insurance companies more enticing. You may even come to the conclusion that there is no need for a modification at all.

Bottom Line

It is possible to switch your auto insurance policy at any time, but you must be certain that this is the best choice for you. An insurance agent can help you select the perfect plan or answer any particular questions you have regarding coverage. They are your best resource.

However, if you want to save money on car insurance, you may do your own comparison shopping. Just make sure you know everything about the policies you are considering, both your current one and any future one, before making a decision.

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