How Do You Switch Auto Insurance Companies?

Last Updated on January 4, 2023

It is always smart to be shopping around for the best auto insurance rates. Every now and then insurance rates drop or special new discounts pop up. If you keep your eyes open, you will be surprised at the special deals you may find.

Many people’s biggest concern with shopping for a new auto insurance plan is their existing policy. You may think that you cannot cancel your policy now if you are under contract, or you may think that canceling your current insurance may be more trouble than it’s worth. But fear not! Switching your auto insurance provider is actually easier than you think.

The Proper Way To Switch Your Auto Insurance Provider

Follow these six steps to ensure that you are switching insurance providers “the right way.”

  1. Get a new policy from a new company.
  2. Set a start date for your new policy to ensure no lapses.
  3. Notify your existing provider that you are canceling and follow their instructions for leaving.
  4. Ask for a refund from your existing provider on your unused premiums (if they allow it).
  5. Alert your state DMV of changes (unless your new provider does this for you).
  6. Start driving with your new policy.

Continue reading below for answers to other frequently asked questions about changing auto insurance providers.

Are You Allowed To Cancel Your Auto Insurance Policy?

Most car insurance providers allow you to cancel a policy at any time, as long as you give them notice before doing so. Many companies do not even charge a fee if you decide to cancel early.

Unfortunately, some companies do require a fine to be paid if you cancel in the middle of a policy. Call your auto insurance provider today to see if they have a cancellation penalty. If so, ask how much their cancellation fees are. If the cost to cancel your policy is greater than the amount you will be saving by switching to a new provider, you might want to “hold out” and wait until your policy runs out so that you can switch providers without any repercussions.

Another thing to consider is that you don’t want to cancel during a payment cycle. By doing so, you will “waste” your coverage. For example, if you just paid your bill for the month of May on April 31, you probably do not want to cancel your policy immediately on May 1 because a whole month will go unused. Wait until the time is right, and then cancel! (Note – Many providers offer refunds on unused coverage, but others do not. Check with your provider first to see their policy on this.)

When Is The Right Time To Switch Policies?

As stated above, you do not want “unused” auto insurance coverage. Likewise, you do not want to have your policy lapse and leave you without coverage. As you probably know, it is illegal to drive without insurance.

Therefore, you should shop for a new insurance policy about 3-4 weeks before you switch. This will allow you adequate time to sign up for a policy, get your paperwork in order, and get the new policy and proof of insurance sent to you in the mail. If you wait until the last minute to sign up for a new plan, you might be left without insurance and hence, unable to drive.

If you are unsure whether you will get your new insurance policy in time to drive, ask your new insurance company. Your new provider will be able to set up your new policy so that its onset is timed perfectly with the cancellation of your old policy.

How To Find Cheaper Insurance Rates

There are many reasons why you might want to switch your auto insurance provider. You might not be satisfied with your current provider’s customer service. You may think you can find better rates elsewhere. Maybe you even are planning to buy a new car and want a new policy for the new car. Whatever the reason, it’s easy to start shopping for new rates.

To begin comparing insurance quotes for free, scroll back up to the top of this page and enter your zip code. After filling out our brief form, you will be given competitive rates from the top insurance providers in the United States.

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  1. Ashley Maxwell says:

    Thanks for your advice to make sure the new insurance company you’re switching to has a day to start for their policy. I like how you said that your previous one can be canceled even if you have signed a contract. My sister is considering getting new auto insurance for her car and wants to make sure that the dates don’t overlap like you mentioned.

  2. Ellie Davis says:

    Thank you for pointing out that it is illegal to drive without insurance. My son just got his license and we are going to need to get a new insurance plan. I think we are going to switch companies. I’ll have to look into different insurance companies in our area and find the best one.

  3. Megan Adler says:

    I like how you suggested that we should shop for insurance about 4 weeks before our coverage ends. My son is going to be moving to a new city and the insurance company has no coverage in that state. I’ll make sure he starts making the switch within that time frame so he isn’t left without insurance.