How To Switch Car Insurance in 5 Easy Steps (March 2024) (2024)

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Switching car insurance companies is easy, and people do it all the time. However, it’s a good idea to talk with your current insurer and see if there are any cancellation fees. If you let your insurance agent know you want to cancel, they may also offer to search for extra discounts or give you a lower rate.

When you’re ready to start looking for new coverage, here’s what to do.

1. Shop Around

The first step to switching car insurance companies is to shop around to find a better rate. We recommend comparing rates from at least three providers. An easy way to do this is to use a quote comparison tool. This way, you only have to enter your information once to see many options.

When you’re shopping around, consider providers that have car insurance discounts applicable to you. For example, State Farm has a student discount of up to 25%, which is better than any other top provider’s student discount. Also, consider usage-based insurance or pay-per-mile programs if you want to save money according to your current driving habits.

Once you’ve identified a few favorite providers, research each company to learn about its customer service and claims experience. We recommend looking at studies like the J.D. Power 2022 U.S. Insurance Shopping Study^℠ and the J.D. Power 2022 U.S. Auto Insurance Study^℠. You can also check out online scores by the Better Business Bureau, the complaint index from the National Association of Insurance Commissioners and financial ratings by AM Best.

2. Purchase the Best Policy

The next step is to purchase the new plan. If your current auto insurance policy is going to expire soon, schedule the new policy to begin at least one day before your current coverage expires.

Doing this will avoid a lapse in coverage. A gap of as little as one day can increase your car insurance rates in the future, since insurance companies consider you an uninsured driver for that time. It’s much better to have two car insurance policies for one day than none at all.

If you’re switching companies in the middle of a policy period, simply schedule the new coverage to begin whenever you would like.

Remember to list your lender on your new policy if you have an auto loan or lease. The lender is a loss payee, which means it gets paid first when your car is totaled if you still owe money. You’ll likely need to get full-coverage insurance, which includes collision coverageand comprehensive insurance, if you have an auto loan.

3. Cancel Your Previous Insurance

Once you have your new insurance coverage in place, it’s time to start the cancellation process for your old policy. If you have any open claims, be aware that your old company will still be responsible for investigating and closing out those claims.

Call your car insurance company and speak to an agent to cancel your coverage at least one day after your new policy begins. You can also schedule an effective cancellation date in advance so you don’t have to remember to call on that specific day. However, don’t just stop paying for your old car insurance policy without officially canceling it.

If you paid for your policy in full at the start of a period, you should get a refund for the unused portion. You might also get a small refund if you pay monthly.

4. Get Your Proof of Insurance

The next step is to print out your insurance ID card or download an app to access it. Most states allow you to show a digital ID card if you get pulled over. However, make sure to save it locally for offline access so you can get to it whether or not you have cellular service.

5. Let Your Lender Know

Lastly, if you have a car loan or lease, you’ll need to inform the lender right away of your new insurance coverage. Your lender would have been listed on your old car insurance, which means your old company notifies your lender of the cancellation. You should have listed your lender on the new car insurance policy as well, but it’s also a good idea to call the lender to make sure it has all the details of your new coverage.

Switching car insurance companies can lead to a lower monthly payment. You may want to shop around and switch if:

• You moved and now pay a higher premium than before
• You got a new car
• Your child got their license
• Someone who drives your vehicle moved in or out of your household
• You got married or bought a home
• You drive fewer miles because of a new life situation, like working from home or parenting
• Your credit score significantly increased or decreased (credit doesn’t affect rates in California, Hawaii or Massachusetts)

The common thread that ties all of these situations together is that something in your driving profile changed. Car insurance companies look at a variety of factors, and even moving one ZIP code over can affect your rates.

Each car insurance company has a formula for calculating rates based on many of these factors. For instance, while you might have a cheap provider when it’s just you on the policy, other companies may offer better rates once you get married. Below is a breakdown of the different factors that can affect your car insurance rates.

Beyond price, you might want to consider switching car insurance if you had an unpleasant experience filing an insurance claim with your current provider. Almost every state requires drivers to have insurance, but that doesn’t mean you have to put up with poor service. The best car insurance providers will provide both great service and affordable prices.

You can switch car insurance companies at any time. This includes the day you start coverage and even when you have certain open claims. You also won’t be penalized for switching multiple times in one year. When your car insurance needs change, you may need to change car insurance providers, which can happen anytime. It can be a bit of a hassle to do many times, but you can make changes whenever you need to.

We recommend shopping around for coverage at least once per policy term to make sure you have the best price. Beyond that, it’s a good idea to consider a switch if your life situation changes in one of the ways described above.

Shop for rates if you are thinking of changing your coverage amounts, as well. Some providers are cheaper for minimum liability car insurance, while others offer cheaper full coverage rates.

When Not To Switch Car Insurance Providers

While you can switch car insurance at any time, that doesn’t mean every time is the best time. Be aware that some car insurance companies give discounts based on how long you’ve had a policy with your provider. So, if you switch companies after a month, you won’t be eligible for a loyalty discount.

Check with your car insurance company to see if it charges a cancellation fee within a certain time frame. Most companies let you cancel without any fees, but this isn’t always the case. You might want to wait until your policy expires to avoid any fees.

Also, it’s best not to switch your car insurance company while you have an open at-fault claim. While you’re allowed to do this, your rates can increase to account for the cost of the claim once it’s settled or at your next policy term. If you have to switch during a claim, make sure you are completely honest about it with your new provider, as leaving anything out could result in even higher rates.

Switching your car insurance policy can be a benefit to you if you are paying higher rates, have a better credit score, or when you or a covered family member moves. However, we recommend thoroughly searching around and comparing your options before making a decision. While it takes time to find the best rate and switch your car insurance company, it can be worth it in the long run.

Enter your ZIP code below to quickly compare rates from multiple providers in your area.

Recommendations for Changing Car Insurance

To make your search for the best car insurance easier we have listed two of the top providers and their coverage offerings and discounts below.

Geico: Best for Budget-Conscious Drivers

After comparing all top car insurance companies on the market today, we rankGeico as one of the best options overall for its combination of customer service, coverage and affordability. Geico offers all of the standard coverage options plus a number of extras, including:

• Rideshare insurance
• Roadside assistance
• Mechanical breakdown insurance
• Classic car insurance
• Rental reimbursem*nt

Geico has 16 different insurance discounts, which means there are many ways to save. The company also offers a usage-based program called DriveEasy that is available in 33 states and Washington, D.C. Finally, our cost estimates show Geico to be one of the cheapest car insurance companies in the country, depending on your driving profile.

Keep reading: Geico car insurance review

State Farm: Best Customer Experience

State Farm can be a great option for car insurance if you are a student or have an accident on your driving record. According to our cost estimates, State Farm has some of the cheapest rates for young drivers and drivers with recent at-fault accidents. Extra coverage options from State Farm include rideshare insurance, roadside assistance and travel expense coverage.

Drivers can use the Drive Safe & Save^TM program to save money based on their driving habits, and young drivers can participate in Steer Clear^® for extra discounts. State Farm is the largest car insurance provider in the country and has an A++ financial rating from AM Best, so you know your claims will be paid out responsibly.

Keep reading: State Farm car insurance review

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.

Here are the factors our ratings take into account:

• Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
• Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
• Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
• Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
• Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.

Our credentials:

• 800 hours researched
• 45 companies reviewed
• 8,500+ consumers surveyed

*Data accurate at time of publication.