Can I switch car insurance companies mid-policy?


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UPDATED: 2021-11-17T21:34:36.157Z
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When you purchase a car insurance policy for your vehicle, your insurer will write policies for a term, which is usually defined as six months or a year. A driver who is insured can either choose to renew at the end of their term, or shop around and switch when their policies expire. There are various reasons why a driver would want to do this, one of the most common being that payments are too high. 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. Ready to switch? Check out our guide on how to switch car insurance and save money.

You'll also want to make sure that if you have any open claims after an accident that those are resolved before you make the big move to another insurer. If you need to know the period of time it takes to resolve a claim, you can always reach out to your agent or a customer service agent from your company. Do this before you switch, so you don't end up with any fees or penalties.

We also have a free online tool that will let you compare quotes from different companies.

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 policy cancellations 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 auto policy and begin a new policy with a different company.

This is why it's important to know what state your policy is in before you make the switch. If you have unresolved claims, or you're attempting to switch by outright cancelling your policy, you might be facing over hundreds of dollars worth of damage control. Not to mention, if you have a lapse in coverage, you may be labeled as a high-risk driver, which will raise the average cost of a policy, thus depriving you of the competitive rates you were seeking. Talk to your current auto insurer to get all the details before you do anything else.

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Are there hidden fees/less coverage?

There are plenty of commercials promising you the lowest rates that try to entice you into switching policies. The cheapest option is always enticing, right? 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. Rather than reduce the type of coverage you have, inquire about any discounts that may apply with the new insurer. Giving up valuable coverage to save money may not end well for you, especially if you give up the coverage types that would help the most, such as the above mentioned collision or comprehensive.

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 policy with your current provider 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 between your previous policy and a new one, 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 before 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. By avoiding coverage lapses, you can save money and look good in the eyes of your new insurance carrier.

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.

Don't forget about our comparison tool, which will help you to compare quotes from various companies.

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