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There are many benefits to switching your car insurance company including saving money and having a better car insurance company that you can count on. You don’t need to sacrifice valuable coverage and great customer service to pay less for car insurance. It could be as simple as switching companies after doing some research.
Below is a table of contents on everything that’s covered in this guide about switching car insurance companies. Click on any of the links to jump to that section.
- Why should I switch car insurance companies?
- When should I switch car insurance companies?
- How do I switch car insurance companies?
- What else should I consider before I switch?
Many drivers stay with the same car insurance company for years, even decades, not knowing that they could save money if they switch to a new one. Staying loyal to one company for years on end could mean that you’re paying more than you need to for car insurance, and you may not know that if you never test the market.
Car insurance companies tend to increase the rate that you pay for a policy over time. Even if your rate has been increased by a small amount each year, that can make a difference in the long term.
In a Clearsurance blog written by Stacy Varney about her experience with shopping around and switching car insurance companies, she wrote, “The difference between my latest renewals and the lowest new quote I received from another large, well-known company was $3,500 per year!”
If you want to be sure that you’re getting the best deal on car insurance, you can shop around by getting quotes from multiple companies to see what others can offer you. Compare that to what your current car insurance company charges.
Life circumstances change and your car insurance policy should evolve to reflect those changing circumstances. As you purchase new cars, add or remove drivers on your policy, and time passes, your car insurance needs and wants likely change. Shopping around and switching car insurance companies may help you ensure that you have the right coverage and company for you in your current life phase and situation.
Any changes to your policy should trigger you to shop around and potentially switch. That can include any of the following reasons:
- You’ve moved: Car insurance rates may vary based on your location and the crime rate in your area. If you have recently moved, even if you are still in the same state or city, consider shopping for car insurance because your rates may change.
- Your current rate went up: An increase in your car insurance rate can happen for a number of reasons and should be an indicator to consider switching companies. Sometimes car insurance companies raise rates slightly, which can add up over time. If your rate has increased, you can likely find a cheaper rate with a different company by getting multiple car insurance quotes.
- You’re not happy with your current company: You could be disappointed with your car insurance for a number of reasons including if it denied your claim, did not give you a proper payout, increased your rates, does not have a useful mobile app offered by other companies, doesn’t have payment options that work for you, doesn’t have friendly customer service, doesn’t have a good network of auto body shops, etc. You may find a better (and cheaper) option if you switch, once you get multiple quotes.
- You have a new teen driver: Teen drivers are some of the most expensive drivers to insure. Insurance companies see them as a high risk because of their lack of driving experience. If you’re about to add a new teen driver to your policy, consider shopping around for a new car insurance company in order to find the most affordable company.
- You just got married and are going to combine your policy with your spouse’s: Married couples often get cheaper car insurance rates than single adults. If you just got married and are planning to be on the same car insurance policy, you should shop around for a new policy and consider switching if you find a better option, after comparing multiple car insurance quotes, of course.
- Your policy is up for renewal: If your car insurance policy is up for renewal, this is the easiest time to switch companies. While you can switch car insurance companies at any time, some companies have a fee if you cancel early (be sure to check your policy). If you’re with one of those companies, you can avoid the fee if you switch when your policy is up for renewal.
- You’ve had an accident, claim, or a negative ding to your driving record: Car insurance rates often increase after you’ve had an at-fault accident, claim, or violation that negatively affects your driving record.
- Your commute or where you park your car has changed: Your car insurance rate might be affected by your daily commute or where you park your car. Do you park your car on the street overnight or safely in a locked garage?
- You bought a new car: Car insurance rates largely depend on the type of car that you drive. Different car makes and models have different insurance costs so if you just got a different car, it may be time to shop around.
- You’re adding a car or driver to your policy: If you’re going to add an additional car and/or driver to your car insurance policy, a different company may be able to offer you better benefits and a better price.
- You just bought a home or are now renting an apartment: Some insurance companies allow you to bundle your car insurance with your home or renters insurance. If you just bought a new home or moved into an apartment, you may want to shop around to see which company can offer you the best insurance bundling deal.
You can switch car insurance companies at any point, even mid-policy. Just double-check your policy to understand if there are any fees associated with canceling mid-policy.
Savvy car insurance shoppers shop around frequently. You’ll have the best chance to find a good deal on car insurance if you shop around frequently and get multiple car insurance quotes from a range of carriers. You should try to get at least three car insurance company quotes when shopping. To make sure you always have the best deal, shop around at least every year when your policy is up for renewal.
Follow these steps to switch car insurance companies:
1. Do your research and find companies that you’re interested in.
If you’re considering switching, consider why you want to switch. Did your rate increase? Are you fed up with bad customer service? Or, do you just want to test the waters and see if there’s a better deal out there? Whatever the reason is, decide what you want from a company and try to find options that fit.
For example, maybe you want a company that offers a telematics program for the chance to save money or you want a company that offers a military discount. Do you want a company that offers great customer service? Decide what matters most to you and the benefits associated with that.
Check out Clearsurance’s car insurance company rankings for the most up-to-date list of the car insurance companies that consumers say are the best in your zip code. From there, you can click on companies to learn more about them and read reviews written by customers of the company.
2. Get quotes from multiple companies and compare them.
Once you have a list of companies that you’re interested in, get quotes from multiple companies so that you can compare them against each other and against the price of your current policy.
If you have an independent agent that you trust, you can ask your agent to shop around for you and get quotes from multiple companies. You can also do it yourself online.
When you’re ready to compare your quotes, be sure to check important factors about the policy including the price and coverage included. Be sure that none of the policies are missing valuable coverage that you want. Choose a company that offers you a great price and also has policy benefits that you want.
While shopping, consider calling your current insurance company to see if it can offer you a better deal. If you tell your company that you’re planning to switch, it may offer you a more discounted rate in order to keep you.
3. Check when your current policy is set to expire.
You can switch car insurance companies at any time, even in the middle of a policy. However, you don’t want your old policy and your new policy to either overlap or cause a gap in coverage.
If your policies overlap, you’d be paying for two policies at once unnecessarily. If you cancel your old policy before your new one is active, you will have a gap in car insurance coverage also known as a lapse. A lapse in coverage is illegal and also negatively affects you. When you have a lapse, car insurance companies see you as a higher risk. Additionally, it could be more difficult for you to get car insurance or it could cost you more.
If you plan to switch car insurance companies when your old one is up for renewal, keep the expiration date in mind. If you will be switching mid-policy, make sure to have your old one canceled as your new one will become active.
4. Switch ID cards and make sure to have updated information handy.
Once you switch car insurance companies, don’t forget to swap out your old ID card for your new one if you keep it in your car. If you have your ID card on your phone on your company’s mobile app, be sure that you can access it and know how to. If you get in an accident and don’t have proof of insurance, you could receive a fine.
While switching car insurance companies is not out of the ordinary, there are some things you should keep in mind if you’re planning to do so.
1. Be sure that you cancel your previous car insurance policy. Don’t just stop paying the bill. Your insurer needs to be notified that you’re switching companies and needs to cancel your policy or else it will continue to bill you. Don’t forget to alert your company of this and cancel your policy. If you just ignore the bills, the insurance company will report you for not paying. This could result in a negative ding on your credit score.
If you have an agent, your agent should be able to help you cancel your old policy and start up your new one.
2. If you paid your previous policy in full or six months ahead of time and you switched mid-policy, you should receive a refund for the remainder months. If you prepay for your car insurance six months or a full year in advance, you can still switch car insurance companies mid-policy and you’ll be refunded for the unused months. Be sure that you get your refund, or else you’ll be paying double for car insurance.
3. Don’t sacrifice coverage or valuable customer service for a cheaper price. The cheapest price is not always the best option. Don’t sacrifice coverage and customer service just to get the cheaper price. This could cost you more money in the long run. For example, if you get into an accident but you don’t have high enough coverage limits to pay for it, you’ll be stuck paying money out of pocket to take care of it.
Read reviews on Clearsurance.com before you buy a policy from a new company to find out what customers have to say about a company’s customer service.
4. Don’t cancel your old policy before you buy a new one. A big mistake you can make when switching car insurance companies is to cancel your old policy before your new one is active. As mentioned above, this causes a lapse in coverage, which is illegal in most states. This means that you will be without car insurance from the time your old policy ended until the time your new one is active. This can cause serious problems including increased car insurance rates because of your lapse in coverage.
5. Watch out for cancellation fees. While you are able to switch companies mid-policy, some companies may hit you with a cancellation fee if you do so. Watch out for these fees and any other hidden fees. Check your policy to see if your company has a fee. If it does, consider how much the fee costs and see if it’s worth it to pay the fee and switch. If you want to avoid the fee, you can wait to switch until your policy is up for renewal.
Do you think you’re ready to switch car insurance companies? Not only could it save you money on your car insurance rates, but it could also give you a better insurance experience if you switch to a better company. If you don’t shop around and get multiple car insurance policy quotes, you could miss out on the possibility of a better company at a better price.
If you’re ready to switch policies, visit Clearsurance’s best car insurance page to see car insurance policy prices and a ranking of the companies that customers say are the best in your area.
The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.