How to Change Car Insurance – Forbes Advisor

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Nearly half (46%) of consumers changed the way they manage their car insurance costs in 2020, according to the JD Power 2021 US Insurance Shopping Study. Of those who made the switch, 15% shopped for another car insurance company and 12% switched to a new insurer.

If your car insurance needs have changed or you just want to find cheap car insurance, here’s how to change car insurance companies.

1. Compare car insurance options

Since car insurance rates vary widely from company to company, one of the best ways to find the right policy is to compare car insurance quotes from multiple companies. When comparing quotes, pay attention to:

Coverage options, limits and deductibles. Although price is an important factor, it is not the only thing to consider. Do you need increased liability coverage in the event of a lawsuit against you following an accident? Or is it time to ditch collision and comprehensive coverage because your vehicle is several years old?

“When comparing new quotes to your current premium, be sure to compare ‘apples to apples,'” says Jon Bloom, vice president of product management at Erie Insurance. “Make sure the covers are consistent with the covers you already have in place, so you don’t end up over or underinsured.”

Customer service and convenience. The best car insurance companies offer good service and a good price.

2. Contact your current insurance company

When you have chosen a new company, you want the new policy to be in effect before the previous policy is cancelled. Insurers let you choose an effective date. For example, you can choose to have your new policy take effect immediately or at a later date.

Once you confirm that your new policy is effective, you can cancel your policy with your old insurance company. If you cancel a previous policy before a new policy takes effect, you could face serious financial problems.

First, you won’t have coverage on your car, which means if you get into an accident, you’ll be responsible for car repair bills, property damage, and medical bills.

Second, driving without insurance is illegal in most states, which can result in fines and license suspension.

Third, driving without auto insurance creates a “coverage gap,” which will cost you more in insurance premiums when you purchase a policy. This is because insurers consider driving without insurance to be a higher risk, which means higher rates.

Be sure to ask for a cancellation confirmation. This way, you can ensure that your car insurance policy with your old company does not renew automatically.

3. Redeem your new insurance ID card

Now that you have a new car insurance company, you need to update your insurance ID cards. If you have a car accident or get pulled over, you may need to show proof of insurance.

Your insurer can usually provide you with proof of insurance by fax or email after purchasing a policy. But many insurers offer an electronic insurance card, either as a download to store on your smartphone or via the company’s mobile application. Digital insurance cards are acceptable in 49 states and the District of Columbia.

4. Tell your auto loan provider or leasing company

If you have an auto loan or lease, be sure to contact your lender or leasing company and let them know of the change. Keep in mind that most lenders and leasing companies require you to have collision and comprehensive insurance.

Reasons to change auto insurance company

“It may be time to switch insurers whenever the service provided by your current insurer does not meet your needs. For example, if you have a bad claims experience or an unexplained rate increase, it might be time to consider other options,” says Jon Bloom, vice president of product management at Erie Insurance. .

Here are the reasons that could justify a change to a new insurer:

  • You had a bad claim experience. Usually we don’t know how good our insurance company is until we file a claim. If you’ve had an unsatisfactory claims experience, you may be looking to jump ship.
  • Your policy is being renewed. As you go through the stages of your life, your insurance needs will change. With that in mind, it’s wise to review your coverage before your current policy renews. If you think you’re paying too much, you might want to change companies.
  • You buy a new car. When you buy a new car, you want to make sure it has adequate coverage. For example, you may want gap insurance if you take out a loan or lease, but not all companies offer this type of coverage.
  • You move. Where you live affects the cost of your car insurance. But not all insurers set the same price for their coverage, which is why it’s a good idea to compare car insurance quotes from multiple insurers. And keep in mind that your current insurer might not offer coverage in your new location, so you might have no choice but to switch.
  • You are getting married. Most insurance companies offer car insurance discounts for insuring multiple vehicles on one car insurance policy. If you and your spouse have different insurers, this could be the perfect opportunity to find an insurer that offers the best coverage and the best prices.
  • You have a young driver. Adding a teenager to your policy can increase your annual premium by more than $2,000. But not all insurers set the same price for teenage drivers. That’s why it’s worth shopping around for the best cheap car insurance for teen drivers.
  • You are retiring. When you retire, you can say goodbye to the daily commute. With fewer miles driven, you may want to consider a non-traditional type of car insurance, such as pay-per-mile insurance.
  • Your credit score has changed. In many states, your credit history is considered by insurers when pricing your coverage. Although drivers with bad credit pay more than drivers with good credit, not all companies raise rates by the same amount. This means you can find a more affordable rate if you compare quotes, even with bad credit.
  • You have had an accident or a traffic violation. Typically, you pay more for coverage if you’ve filed an accident claim or have moving violations on your record. However, the amount of your rate increases will vary by company. You can find a company that has a lower rate than you currently have, even with recent accidents or tickets on your record.

How to change car insurance FAQ

Can you change car insurance companies too often?

You won’t be penalized if you change car insurance companies, but you may be subject to cancellation fees, depending on your insurance company.

Plus, you might miss out on some auto insurance discounts if you switch insurers. For example, you could lose a loyalty discount. If you transfer the policy to a new company and keep a policy with a previous insurer, you could lose a discount on multiple policies. One of the best discounts you can get is when you bundle your auto and home insurance with the same insurer.

Can I change car insurance companies while I have an insurance claim in progress?

Yes, you can change car insurance companies while you have an outstanding insurance claim with your current insurer. If the accident happened while you were covered by your previous insurance policy, that insurer must process your claim.

You will need to stay in contact with your previous insurer to resolve any outstanding claims.

Do auto insurance companies refund premiums I’ve already paid?

When you terminate a policy mid-term, you should get a prorated refund for the remainder of your policy term. For example, if you paid your full annual premium and canceled your policy after six months, you should get a refund for the remaining six months (less any applicable cancellation fees, depending on the company).

You will likely be refunded the same as your payments. So if you pay by credit card, you’ll see the refund as a credit to your card balance.

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