Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

Full Bio →

Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • Checking out car insurance companies and their ratings is easy but important
  • Coverage levels may be similar yet have different costs depending on the company
  • Having a good credit score could lead to more discounts on your insurance
  • Switching to a new provider could involve extra costs and fees

There are a few things to consider before you switch car insurance providers to ensure that you are not losing options for a lower price.

While saving money is always a welcome idea, if you are not careful, the consequences of moving too quickly may cost you more than just a few dollars.

Enter your ZIP code into the FREE tool at the top of the page to compare car insurance quotes today.

Switching car insurance providers is becoming a routine activity for many consumers because everyone is looking for a bigger, better, deal these days, according to a J.D. Power and Associates press release.

There is nothing wrong with comparison-shopping when it comes to car insurance. In fact, most experts recommend that you look around from time to time, especially if your current provider begins to show signs of complacency.

However, the smart and well-informed consumer knows that a great deal is only as good as the value it represents. And finding out the best deal involves research.

You cannot expect to simply pick up the telephone or go to a competitor’s website and in a few minutes receive something better. You need to know your options and how to take advantage of them practically.

To succeed in this endeavor, you must consider the top three things before making such a bold move. First, you will need to take a solid inventory of the most reputable companies and weigh their pros and cons against your personal needs.

Gathering this information will not take long, but you should have a good strategy as well as some patience!

Table of Contents

Is it bad to switch car insurance companies?

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

The car insurance industry is growing at a tremendous rate and eve the small, local agencies are learning how to compete with the largest companies.

This means you should rely on hard data to draw conclusions. One of the best ways is to go to J.D. Power and see how your current car insurance provider stacks up against the rest.

You can select from categories that include price and billing, how well they communicate with their customers, and the types of policies they offer.

Their system is fairly simple to understand since they base their ratings on a five-point method. Five stars is the highest rating, and zero stars is the lowest.

The company with the highest number of stars in any or all categories is generally the best overall.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Get Opinions from Others

You might also want to take advantage of the knowledge of your immediate circle of friends, all of whom probably have their own car insurance company. Talk to them, ask them for their honest, candid opinion on their choice and find out what makes their company so special.

If their feedback matches the ratings information, you know you are on the right track. You can use this information to compile a short list of companies that you want to investigate further.

You should also see what other consumers have to say about their customer service department.

The Better Business Bureau is great for research on customer service ratings. The site is also user-friendly since they list the number of complaints by year, along with a grade of A through F.

Companies that cater to their customers will have an excellent rating while those who fall short will suffer in this area of ranking.

Look for your company and see where they rank compared to those you are considering.

Compare the Coverage Levels

This may seem obvious, but you really need to review coverage levels and see how they differ from what you already have. Of course, if you plan to remove certain levels, your rates should automatically drop.

However, if you are keeping the same type of car insurance, and the rates are substantially different, you should know the reason why.

If you have access to your current policy, make sure you have this with you when you start asking for quotes.

Suppose you have a liability bodily limit of 10/50/25 which costs you $350 per year, and the new company is offering you a liability bodily limit that costs you $275 per year.

You will want to know why the difference is so great. Is it because the limits are lower?

Try to look at the rates from all angles, not just the cost but also the reason behind the cost.

It is your responsibility to question all aspects of the options you select surrounding your coverage.

If you are going to sacrifice something for lower rates, make sure it is your choice to do so, not because you were not aware of the variations.You are the person who is going to need help if the time ever arrives.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Does switching car insurance affect credit?

Knowing your credit history makes the top three considerations because the majority of car insurance companies are utilizing this data in their rate calculations today.

If you have been a customer with your auto insurance provider for some time, you may not know how important it is to have a good credit history.

One of the first things they will do is complete a credit check with your application so it is probably a good idea to have some idea of how you rate. Your credit history can be accessed very easily and free by going to Annual Credit Report.com and requesting yours today.

The application process takes less than two minutes, and you will receive your results just as fast. Review the contents, and look for any errors that need correcting.

Contact the three credit bureaus with the updated information, request an investigation and in less than 30 days, you should have a new and improved credit history.

Make sure the car insurance companies are checking out your most recent credit report. You can even take it a step further and go to Experian for your credit score. They will provide you with a copy for just one dollar.

If your credit report looks great, your credit score will be high. This will increase your ability to secure a great rate with a new car insurance provider.

Consider the Extra Cost of Switching

Bundling your car and home insurance has pros and cons. If you currently have a bundled policy with your insurance provider, this is something you will definitely need to consider when searching for a new provider.

After all, one of the reasons why you selected this option is probably because of the huge discount you are receiving.

Additionally, it is much easier to manage one policy, rather than two.

Since most car insurance companies offer this option, it should not be too difficult to switch from one to another. The only issue may be understanding how each company itemizes their coverage.

No one company owns the patent on bundling, so while they may not use the same wording, essentially the process is the same if you are insuring more than one item.

It may not even be your car and home. You may have the bundle option with your car and boat or car and recreational vehicle. Either way, it is important to know how the discount is applied.

Some companies deduct the amount from your annual premium while others may lower your deductible by a few hundred dollars. You are responsible to do calculations to ensure that you do not lose your valuable savings by switching companies.

When researching deductible costs, find out if both vehicles are considered if an accident occurs, and both are damaged. For instance, if while towing your vehicle behind your RV you were involved in a collision, would you need to pay the deductible for both or just one?

These minor details can help you can decide which company to choose or if you switch at all.

Risks of Changing Car Insurance Companies

If you share your auto insurance policy with someone else because of the multi-car discount you receive, you are going to want to have a serious discussion before making any changes.

This is because they have the option and right to stay with whom they have right now. Maybe they are not looking to switch providers because they enjoy the level of customer service and other benefits.

You may face this dilemma of possibly losing a major discount if you go from one car insurance company to another.

In addition to the loss of the discount, you may also lose the good rate you received if the other person is older and has a better driving record.

If you are an add-on to the policy and want to switch or if the person who wants to stay is your spouse, you are presented with a real problem. If you share an address, car insurance companies will certainly take notice and start to dig a little deeper into certain areas.

You could lose other options you never thought of before.

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

 Secured with SHA-256 Encryption

Extra Fees for Switching

Your new car insurance company will expect you to provide them with a large down payment depending on the rate they offer. This means out-of-pocket expenses that you did not have before.

Of course, you should receive a refund after you cancel your policy with your current provider, but this is something that should be considered.

Another issue could be the payment options. Your current car insurance provider may waive the fee for making monthly payments.

Today most car insurance companies charge anywhere from $3 to $5 extra each billing cycle unless you sign up for automatic deductions or pay your bill in full.

You could lose more money than you save if you are not careful with the company you choose.

The best car insurance rates are waiting for you right now. Just place your ZIP code into the FREE tool at the bottom of this page.