Can I switch car insurance companies mid-policy?


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UPDATED: 2021-06-16T19:33:19.536Z
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When you purchase a car insurance policy, your insurer will write policies for a term, which is usually defined as six months or a year. Most insured drivers either choose to renew at the end of their term or shop around and switch when their policies expire. In Clearsurance-conducted research, we found that customers who shopped for a new car insurance company and decided to switch saved an average of $390 on their annual car bill. You may be wondering if you can change auto insurance companies before your policy is set to end.

The short answer is yes! With enough notice, auto insurance companies will generally allow you to cancel your policies for your current coverage at any point. However, switching mid-policy may come with some cost to you, and you could potentially run into problems if you aren't familiar with the cancellation requirements. Here are some things to watch out for when considering switching insurers.

Ready to switch? Check out our guide on how to switch car insurance and save money.

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Do you have to pay cancellation costs?

Although some of the nation's largest auto insurance companies don't charge a fee if you decide to cancel mid-policy (State Farm, Geico, Allstate, Progressive and Farmers), other insurance carriers may still impose a cancellation fee. It's important to talk to your current insurance carrier or agent to discuss the cancellation process and learn of any potential penalties involved with canceling your policy before the coverage period is set to end. You will also need to make sure there is no lapse in coverage occurring when you cancel your current car insurance and begin a new policy with a different company.

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Are there hidden fees/less coverage?

There are plenty of car insurance commercials promising you the lowest rates that try to entice you into switching policies. While this may be true that some auto insurance companies may offer significantly lower prices for the same coverage, but some insurers will offer you a cheaper rate, only to drastically reduce your coverage. For example, if you currently have collision and comprehensive coverage in addition to liability, you'd only want to compare rates with a company offering the same full coverage with the same policy limits and deductibles.

Additionally, sometimes an insurance company may avoid mentioning hidden fees and other charges to make their insurance rate seem much lower than what you are currently paying. While this can make the new policy appear cheaper than the policy with your current insurer, when it is all taken into account, the reality is that the prices from both auto insurers can be closer than they first seemed. If you have an insurance agent, it may be helpful to talk with them about your coverage options and needs to find out if you can modify your current policies to avoid changing auto insurance providers before your policies expire.

What are coverage gaps?

If you cancel your insurance before you have a new auto insurance policy in place, you may leave yourself vulnerable to serious legal and financial problems due to a lapse in insurance coverage. Additionally, if you go too long without insurance coverage, your new insurers may see you as a “risk taker,” which could increase your rates. Be sure to make absolutely certain that your new insurance policy term will start on or before the day you cancel your current policy or it expires. Your goal should be to maintain continuous coverage so that the transition from your current insurance company to the new provider goes as smoothly as possible.

You can also lose some auto insurance discounts such as loyalty discounts when you have gaps in coverage, and you can see that providers will take the opportunity to charge you more.

If you're shopping for a new car insurance company, it's important to research the best options before choosing a company. Clearsurance has rankings of the best car insurance companies according to customers, which you can filter by your state or zip code. Once you've selected a few auto insurance companies you're interested in, you can read reviews on Clearsurance to learn about the experiences other customers have had with that insurer.

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