How to Switch Auto Insurance Companies in 2024 (Clear Step-by-Step Instructions)

How you switch auto insurance companies is by first assessing your coverage needs, reviewing any cancellation fees, comparing quotes, purchasing a new policy, and then canceling your old policy and updating your ID cards.

Learning how to change your policy over to one of the best auto insurance companies will help you get lower auto insurance rates and avoid lapses in coverage.

Find your cheapest auto insurance quotes by entering your ZIP code above into our free comparison tool.

Find a Different Car Insurer by Following These 5 Steps

Step #1 – Determine the Amount of Coverage Needed

The first step to narrowing down company options is to consider how much car insurance you need. When you switch companies, you will need to know what types of coverage you want beforehand so you don’t accidentally purchase something you don’t need.

Minimum Coverage Auto Insurance Rates by Provider

For example, while you are required by your state to carry the bare minimum liability insurance, you may wish to purchase more than what your state requires in order to be better protected. You should look at your state minimum auto insurance requirements and see if you want more coverage.

Minimum Liability Auto Insurance Requirements by State

For instance, with liability auto insurance, you will often see policies listed in the format 25/100/100. This means the state requires you to carry a policy with $25,000 for bodily injury damages per person, $100,000 for bodily injury damages per accident, and $100,000 for property damages per accident.

If you want insurance to pay more than these listed amounts after an accident you cause, you will need to increase your liability limits.

You also should consider whether you want to carry important coverages like collision auto insurance or comprehensive auto insurance to have a full coverage policy. Most insurance companies also offer add-on coverages like roadside assistance or gap insurance.

Consider buying more coverage than the minimum required and determine how much coverage you want before applying for auto insurance quotes.

Step #2 – Check Cancellation Fees and Refunds

The last thing you want when canceling insurance is to lose large amounts of money due to cancellation fees. Before canceling your current policy, make sure to check the cancellation fees and refunds. Can you switch car insurance companies mid-policy? Yes, but there may be a penalty involved.

However, if your insurance company doesn’t charge a cancellation fee and will refund you the unused premiums, you can cancel anytime without fear of losing money.

Most insurance companies aren’t clear about their cancellation fees and refunds upfront, so make sure to check the fine print on your policy to find out the details.  Find out how to cancel your auto insurance.

Step #3 – Compare Auto Insurance Quotes

When picking a new insurance company, it is important to compare multiple quotes to find the best deal. One of the most common reasons drivers may choose to start shopping around and comparing quotes is because they have a new traffic ticket or accident on their record. Find out how to compare auto insurance here.

Below, you can check out the average full coverage auto insurance rates from the top providers to help you determine whether it’s time to change car insurance coverage:

Farmers Full Coverage Auto Insurance Monthly Rates by Provider & Driving Record

Insurance Company	Clean Record	One DUI	One Accident	One Ticket
	$160	$270	$225	$188
	$116	$194	$176	$136
	$139	$193	$198	$173
	$105	$250	$133	$106
	$174	$313	$234	$212
	$115	$237	$161	$137
	$105	$140	$186	$140
	$86	$112	$102	$96
	$99	$206	$139	$134
	$59	$108	$78	$67
U.S. Average	$119	$146	$173	$147

Comparing quotes will help drivers see if a different company offers cheaper rates based on their driving record. If drivers can find companies that can save them money, especially with a ticket or accident on their record, it is often worthwhile to make the switch to get cheap auto insurance after an accident or similar mishap.

Comparing quotes will also help you see which companies offer the coverages you want at an affordable price, especially if you are looking for add-ons like roadside assistance or accident forgiveness.

Step #4 – Buy New Policy and Cancel Auto Insurance

Once you have picked a new insurance company, the next step is to buy your new insurance policy and set a date for it to be activated. The activation date may be the day you purchase the policy or a week later.

You want to buy your new insurance policy and ensure it’s active before canceling your old policy to avoid an illegal lapse in coverage where you are left unprotected on the road.

Even one day without insurance may result in higher insurance rates, so it’s vital to make sure you have coverage before canceling. Make sure you also receive your new digital ID cards and confirmation of insurance coverage.

Read More: How long does it take for auto insurance coverage to be active? 

Once you know what day your new insurance policy starts, you can cancel your old insurance policy. Make sure you set the cancellation date for the same day your new insurance policy starts, not before.

Step #5 –Change ID Cards

Once you’ve successfully signed up with your new insurance company and canceled your old policy, you need to carry your new insurance ID. Download the digital copy if applicable and carry a paper copy in your car. You can discard your old ID cards.

Why Drivers Consider Switching Auto Insurance Companies

Because switching car insurance providers can be time-consuming and a hassle for some drivers, you may be wondering if you should go to the effort of switching your car insurance. Generally, drivers should consider looking into different companies and possibly switching under circumstances like the following: 

• Credit Score Changes: If your credit score has drastically changed, switching to a different company may help you find a better rate.
• Driver History Changes. Any accidents or traffic tickets increase rates and make looking into other companies for cheaper rates worthwhile.
• New Drivers or Leaving Drivers: Parents should get new quotes if they have a new teenage driver joining their policy or if a current policy driver is moving away. Read more: When should I add my child to my auto insurance?
• Home Purchase: Other insurance companies may offer better discounts for drivers who are also homeowners.
• Lifestyle Changes: If you are working from home or retired and therefore driving less, another company may be cheaper.

Marriage, purchasing a new vehicle, or significant rate changes—whether due to a move or an accident—also warrant comparing companies. Essentially, any changes to your driver profile or history can result in rate increases, making it worthwhile to switch car insurance after an accident or lifestyle change.

Your current car insurance company may be the cheapest for you now, but that doesn’t mean it will always be the best choice for your needs.

When Not to Switch Auto Insurance

While switching companies can result in cheaper rates, this doesn’t mean you should always look into switching. Some of the reasons not to switch include: 

• You Won’t Qualify for Some Discounts: If you don’t stay with a company long, you won’t qualify for certain auto insurance discounts like loyalty program discounts that can save you money down the road.
• You May Be Charged Cancellation Fees: If your insurance company charges high fees for cancellation, you may want to hold off on switching.
• You May Not Be Able To Get the Same Full Range of Coverage: If another company is cheaper but doesn’t have the coverage you want, it is probably worth staying with your current provider to be fully covered.
• You Have an Open Claim: If you have an open claim, you should hold off on switching until your claim is settled. This will help you avoid the headache of handling a claim at your old company while switching to a new one.

Just because a company is cheaper doesn’t always mean that you should switch car insurance. Sometimes it is worth staying with your current provider.

Best Time to Switch Auto Insurance Companies

Is there a penalty for changing auto insurance? No. You can switch to a new car insurance company at any time, but if you are charged cancellation fees for early cancellation, it may be best to wait until the end of your policy term.

When switching car insurance companies, making sure your new policy starts before your old insurance policy ends is essential to avoid a lapse in coverage. Because your driver profile and record constantly change, shopping for quotes every year is a good idea.

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— AutoInsurance.org (@AutoInsurance) August 8, 2023

Getting quotes from multiple companies when switching is the best way to ensure you get a good deal. Use our free quote comparison tool to find the best rates from car insurance companies in your area.