How to switch car insurance in 6 steps
It’s not hard to switch your car insurance company, but it’s important to follow the steps in the right order to avoid a detrimental lapse in coverage. Follow the steps below to easily switch.
Step 1: Decide what coverage you need
Most people need to buy a certain minimum level of coverage because most states set a legal mandate for the minimum insurance required to drive in that state. If you finance or lease your car, your lender may also require you to buy a certain minimum level of coverage.
Beyond those requirements, you choose how much coverage you want to buy to meet your insurance needs. You can decide how much additional coverage to buy beyond liability coverage, if any, by taking a look at your financial situation, driver risk status, and comfort level. Understanding this information about yourself will help guide you toward certain insurers.
If you drive for Uber or Lyft, for example, you might want to consider rideshare coverage, which not all insurance companies offer. Speak with a financial advisor or an insurance agent about any questions you have about your coverage needs.
Step 2: Check for potential cancellation penalties
Before you invest too much time in switching car insurance companies, check whether you’ll face any financial penalties for switching insurers.
You won’t face any early cancellation fees if you wait until the end of your policy period. By switching before your policy ends, you may receive a penalty from your insurance company.
To find out if your existing insurer charges a fee for auto insurance policy cancellation — and if so, the penalty amount — you need to read your contract. If you can’t find a copy or if the contract is unclear, reach out to your insurer directly and ask.
Even if there is a fee, you may still have reason to switch insurance companies. You’ll need to weigh the cost of the fee against any potential savings. Consider waiting until your policy is up to switch companies so that you can avoid any early cancellation fees, unless the need to switch is urgent.
Step 3: Compare quotes from multiple insurers
Block out an hour or so to compare quotes from as many insurance companies that meet your coverage needs as you can. The more companies you check with, the better your odds of finding the best car insurance company for you.
A few helpful shortcuts will make the process easier. If you need the help, an auto insurance broker can do some legwork for you in shopping around, although they may only work with a limited number of companies. Online quote-comparison shopping expedites the process and allows you to shop around conveniently. Make sure you use a reliable site like Insurify, rather than a lead-generation site that will spam you.
Step 4: Purchase and avoid a lapse in coverage
Once you find the best car insurance company for you, go ahead and purchase a policy. You can choose the policy to start at a future date if you like, which is handy if you want to set up your new policy to start right as your old one ends.
It’s especially important to buy a new car insurance policy before your old policy ends or you cancel it. If you do it the other way around — cancel your current policy, then buy a new policy — you could get in legal trouble since most states require you to have current insurance.
Beyond legal trouble, having a gap in coverage leaves you financially vulnerable. If you get into an accident, you could face serious out-of-pocket costs. Even if you have no plans to drive your car, vandalism or a severe weather event could damage your vehicle.
Step 5: Cancel your old insurance policy
Once you’ve purchased your new policy, you can cancel your policy with your old insurer. Remember the date your new policy starts — and make sure to set your cancellation date to avoid any coverage gaps.
Depending on your insurer, you may be able to complete this online, at a local office, or over the phone.
Step 6: Swap your insurance ID cards
Before you forget, remove any old insurance ID cards you have. Your new insurer will mail you new insurance cards.
Depending on your new insurer, you may also be able to print out new insurance ID cards in the meantime or even access them through your insurer’s app.
Whenever I've switched car insurance companies in the past, I've been able to take care of it with just two phone calls. First, to my new insurance agent to establish my new policy and effective date, and then to my current agent to set my policy end date on the same date my new coverage takes affect to avoid a lapse in coverage.