There are lots of good reasons to consider switching car insurance companies. If you are moving, getting married or divorced, have a new teen driver in your household, are purchasing a new vehicle, or have any other significant life event coming up, you might want to think about changing your car insurance company.
Or if you have been with your current car insurance company for a long time, they may not be giving you the most competitive rate any longer. Shopping around for a new rate and comparing your options could save you money on your premiums. It is a smart idea to compare rates at each renewal to make sure you are paying the best price possible for your car insurance. You should also consider shopping around if you receive an increase notice from your current insurance company. It is likely a competing carrier could match or beat their rate before the planned increase.
But because car insurance is complex and often expensive, many people don’t think they can switch companies — or don’t want to put in the effort. But it is a painless process, especially with online resources at your fingertips. And when you need extra help, you can find an agent in your area to answer all your questions.
5 Steps to Switching Car Insurance Carriers
Changing your car insurance company sounds like it will be a time-consuming hassle, but in reality, it is a straightforward process. There are five quick steps you can easily complete to change your insurance carrier — and when it means you could save lots of money each month on premiums changing insurance companies can be worth your time.
There may be times when you would not want to switch your insurance company, though, so consider talking with your agent before making the change if you meet any of these criteria:
- You have an open claim with your current auto insurer. While having a claim doesn’t stop you from switching insurance companies, it can complicate things, especially if it is an at-fault claim. Your new insurer needs to know about the current claim and its resolution so it can properly rate you. And you have to share all relevant information with a new insurance company to avoid misrepresentation in your application so be sure to talk with your agent if you have an open claim and want to change insurance companies.
- You have SR-22 insurance. Not all carriers will handle SR-22 insurance, so if you have an insurance company writing your coverage and managing the SR-22 with the state, you might consider waiting until you are off the SR-22 before switching car insurance companies.
- You are in the middle of your policy term. If you will incur any fees by terminating your policy early, you might want to wait until the end of your policy term before switching car insurance companies. Check with your current insurer or agent to make sure there are no early termination or cancellation fees.
If none of those criteria apply to you and you decide to shop around for a new insurer, follow these five easy steps to switch car insurance companies:
1. Do your research
Research your options. There are many different car insurance companies that write policies in each state, so take your time researching your options. The push toward digital insurance policies means more online companies have been established in recent years.
These new companies drive competition and are innovative in their product and service offerings. But remember newer companies may not have as much financial strength as more tenured competitors. And if it is a newer insurance company, they may not have much history of paying claims successfully — an important metric to consider in your next insurance company.
Consumers have access to all kinds of data about car insurance companies they can use to help them make the best decision about which carrier to choose. Price is not the only consideration when you are researching car insurance companies. The lowest-priced option may not be the best fit for your needs. Try these online resources to help you in your research process:
JD Power Customer Satisfaction Surveys. JD Power surveys can help consumers learn more about customer satisfaction with major insurance companies.
AM Best Ratings. For information about insurance company financial ratings and solvency concerns, AM Best has helpful data.
Online Reviews and App Store Ratings. Check out the online reviews and ratings in the app store for your insurance company. People provide ratings on every service and product now, so checking what other customers have to say is a good way to hear about other people’s experiences. Most major car insurance companies have a mobile app so the IOs or Android app store can help you learn about the app and the carrier. Glassdoor has reviews about what it is like working at major employers, which could tell you some helpful tips about a car insurance company you are considering.
The NAIC Consumer Portal. The NAIC, or the National Association of Insurance Commissioners, hosts an online portal accessible to consumers. This portal has details about complaints filed against car insurance companies. You can use the data to help you make an informed decision about your next car insurance company.
Fitch Ratings. Fitch ratings is a site consumers can use for financial ratings of various car insurance companies.
Moody’s. Moody’s is another site that has information available on various industries, including insurance companies.
Demotech. If you need to locate financial rating details for a new insurtech company, Demotech could have the data you need. Demotech has ratings for insurance companies that have existed for less than five years. When the other major ratings bureaus have not yet rated a carrier, try Demotech.
The Insurance Department for your state. Insurance is administered and governed by each state, so you can search for your state’s insurance department website for more help. They may have consumer ratings, car insurance company details, and other consumer information.
Once you have done your research, contact a local agent to compare your options. They can help you make sense of the metrics and data you found and understand which carrier may be best for your situation. Agents are there to work with you and your insurance company to get the best fit for your coverage needs.
2. Compare rates and policy options
One of the best ways to help you get the most competitive rate possible when switching car insurance companies is to compare rates from different carriers. Our free online quote tool is fast and easy. You’ll input your details once and get quotes from all the major carriers. Once you compare rates, you should also compare the policy options. Each insurance company has different products so you should read your policy and pay attention to coverage limits, conditions, and exclusions. Ask your agent for help interpreting the policy language — sometimes insurance policies are difficult to read.
You will need some important pieces of information to compare policies and rates. Have these details handy when you call your agent or use an online quote comparison tool:
- The make, model, year, and trim of all the vehicles you want to insure. The more accurate your information, the more accurate your quote will be.
- The address and zip code of where you live and where the insured vehicles will be principally garaged.
- How many miles you drive each vehicle and whether the vehicle is used for pleasure or to commute to work.
- The coverage limits you’d like, including deductibles. Our online quote tool preselects limits for you to start with or you can use your current limits or other ones you’d like to consider.
- The demographic details of each driver in your household, including their name, address, years licensed, education, occupation, gender, marital status, and credit rating. If any driver on your policy needs SR-22 insurance, that also needs to be noted. You will also need information on any tickets or accidents in the last three years.Â
- The insurance and claims history for each driver you’re insuring. You will need to note any lapses in coverage.
You can select various coverage limits to view with our free quote comparison tool. Comparing a wide range of options will allow you to find the right mix of coverage at the right price for you. You might be surprised by how affordable it is to add additional coverage or to increase your policy limits. Increasing your deductible will make your premium lower if you can afford to retain more of your damages in the form of a higher deductible.
3. Reach out to your current car insurance company
Before switching car insurance companies, it makes sense to call your current insurer to ask if they can match your new rates. If you have found a more competitive rate with a new insurance company, your current one may beat that rate to keep your business.
It is worth a phone call or email to your agent to ask for the best rate on renewal your current company can offer. Be sure you are comparing apples to apples — if you switched up your coverage limits or deductibles when you found new quotes, tell your current company so they can match your new quote with the same levels of coverage.
4. Time your new policy to match your prior expiration
Work with your new insurance company, agent, and prior insurer to time your new policy to avoid any lapses in coverage. You do not want to risk being uninsured for any period of time with a lapse so be sure that your new policy begins before your prior one ends. Your agent is a valuable resource in helping you coordinate this timing — and because avoiding a lapse is critical, work with your agent in advance of your policy renewal date.
Cancel your old policy once your new one becomes effective. This is a crucial step. If you enrolled in autopay with your prior carrier, they may continue charging you until you terminate your policy in writing. Don’t assume your new insurance company has canceled your previous policy — this is a step you need to take. You can request written confirmation from your prior insurance company that your policy has been terminated along with the date. If you manage your policy digitally, you can request a copy of the termination notice online.
If you cancel your previous car insurance policy before the end of your policy period, your insurance company may owe you unearned premium. This is the amount of money you have already paid your insurer for future coverage – and since you are canceling your policy before you use the future coverage, your insurance company owes you that portion of your paid premium back. It is referred to as unearned premium because your insurance company has not yet earned that money by providing you coverage.
If you are owed any money back, your insurance company will issue you a policy refund by check or direct deposit. Check with your agent or insurance company to know if you will receive any unearned premium back. If you cancel your policy at the end of the policy term, you will not have any unearned premium since you used the service through the term date.
Some insurance companies may charge you a cancellation fee or early termination fee for canceling your policy mid-term. Check with your current insurer to understand their policies regarding policy cancellations. If you will have to pay a fee to terminate early, you may want to wait until your policy end date to switch.
5. Enroll in autopay and put your new ID cards in your vehicles
Be sure to print your new ID cards and put them in your vehicles. Take a look at your ID cards and check the basic details for accuracy, too. This is also a good time to set up your digital account with your new insurance company.
You might consider enrolling in autopayments. Most car insurance companies offer a discount of 5-15% to customers who enroll in autopay — and you could score an even higher discount if you pay your bill in full instead of opting for monthly installments.
Take the time now to get familiar with your new insurance company’s website. You might add their contact telephone number to your contacts. Read about any additional discounts you could be eligible for with your new insurer and ask your agent if you can take advantage of any additional discounts to lower your premium.
In addition to an autopay discount, most major car insurance companies offer discounts for things like being a safe driver, taking a defensive driving class, being a good student, bundling policies, and insuring multiple vehicles with the same insurance company. Enroll in all the discounts you are eligible for and check with your agent or insurance company for more help.
The Bottom Line
Switching car insurance companies can be an easy process when you follow our five simple steps. And since switching carriers could save you a lot of money on your premiums, it is worth your time and effort to research changing companies. Our agents can help when you decide it’s time to shop around. Compare rates online with our free online quote calculator then contact a local agent in your area to help you get the best rate and policy for your needs.
External Links:
- https://www.jdpower.com/sites/default/files/file/2021-06/2021063%20U.S.%20Auto%20Insurance%20Study.pdf
- https://content.naic.org/cis_consumer_information.htm?agent_id=70295?agent_id=70295
- https://www.fitchratings.com/
- https://www.moodys.com/researchandratings/market-segment/insurance/property-casualty/00500900C
- https://www.demotech.com/
- https://www.irmi.com/term/insurance-definitions/deductible
- https://www.irmi.com/term/insurance-definitions/unearned-premium