It is ok for you to switch car insurance carriers whenever you want to switch. It isn’t the same contractual obligation as you would have as like that of a cell phone or something along those lines. You’re not legally bound to wait until the renewal period in order to cancel. The ideal time to change is when you are coming towards the end of a coverage period, but that’s ideal for you as the policyholder. And that doesn’t mean you have to wait until that time. Make sure to do yourself a favor by allowing sufficient time to find the best deal available and lessen potential cancellation fees by changing providers way too soon.
It’s actually noted that Americans are not switching their auto insurance carriers as often as they really should. Drivers are loyal to their companies staying with them for the duration once they sign on, meaning they are missing savings that they could benefit from by shopping with other providers.
Why Change Carriers
If you change auto insurance carriers you can significantly save money on your premium rates or you may receive added benefits or perks with another provider that are just not available with your current plan, e.g. roadside assistance. Life circumstances for you change every year that could make your situation with your car insurance significantly less costly. Insurance provider rates for various companies change from year to year, meaning your company may not be the cheapest anymore. It’s worth it to go through and shop your insurance regularly to see if you can save some money in your budget. If you have already paid for your insurance as an annual payment, your old carrier can give you a prorated refund once you give them notice of cancellation. They may take a fee for early cancellation but that is dependent on the carrier and their policies.
When Should You Change Carriers
Most people like to keep tabs on their budget and do so on a regular basis. It’s ok to keep constant watch of what’s happening on the insurance scene. There is no downside to trying to find better rates for yourself and saving money for your budget. The biggest changes in policy rates are going to come when there is a significant change in your life. Receiving a single person’s rates and then getting married, you may get much better premiums at another company compared to what they are with your current provider. Other times you should look for better deals on your car insurance:
- When you put on a new driver or remove a driver
- Before buying a new car
- Any time you move, particularly if you’re going to a new state
- A month prior to the existing policy renewal and you are given the new premiums
Another time that you want to consider shopping for your insurance is in the years after having an accident that was your fault or any type of driving violations. Premiums generally go up after having an accident or speeding citation, but if you continue to check often, e.g. every six months, rates will slowly begin to decrease. The various insurance carriers have their own policies when it comes to accidents and violations. It’s important to really do research where this is concerned.
Can You Change Carriers If You Have An Open Claim
There are no penalties given and there should be no impact as to whether you change carriers while there is an open claim on your account. Your current provider is still going to be responsible for payment of the claim even though you are terminating coverage with them. You will still need to deal with both of the providers until the claim has been taken care of. If this is something uncomfortable for you, you should wait until the claim is taken care of before changing.
If You’ve Recently Had An Accident
There’s never a downside or when you should avoid shopping for a better deal on car insurance. But it is less likely that you will be able to save much money by changing if you’ve been in a recent accident or been convicted of a traffic violation since the last time that your policy has been renewed. Your rates will be elevated by being involved in an accident or having a traffic violation, and carriers mostly only reconfigure your rates during the renewal phase.
The Change
After you make the decision to pursue a new policy, purchase the plan and verify that it is active. Obtain the proof of insurance from your new provider and then contact your old carrier to cancel that policy. The old provider will give you a refund for the amount you have left with your plan if you have switched during mid-policy. Avoid any type of gaps even brief gaps in insurance coverage for fear of losing your license or a potential significant elevation in premium rates. It’s better to have the possibility of a couple of days worth of double coverage than having a risk of no coverage.
After Changing
It’s important to let your lender know or, if you have a lease, your lease provider know immediately that you have changed auto insurance carriers because the lenders and lease carriers require auto insurance. If they believe you’ve become uninsured, they may repossess your vehicle or they could possibly purchase a separate plan for you.
The only time you really need to worry about being dropped by your auto insurance carrier is within the initial 60 days that the plan has been issued. This is when you need to try your best to avoid any accidents and any type of traffic violations so you don’t find yourself without auto insurance of any kind.