Smart Things to Do Before Switching Car Insurance

Before you switch car insurance, (1) arrange new coverage to avoid a lapse, (2) read customer reviews online, and (3) compare quotes to lower your rates by up to 20%.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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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...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 27, 2021

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Here's what you need to know...

  • Switching car insurance companies may help you save money
  • One reason to switch may be bad claims service
  • Be sure to ask about any applicable discounts
  • If you do decide to switch to a new company, be sure there is no lapse in coverage
  • Be sure your new insurer is financially stable

There are many reasons why you may want to switch car insurance.

No matter what the reasons are, you should do some things first. One of the first things that you should do that would be smart is to speak with your insurance company to address the issue that is resulting in you wanting to change companies or policies.

It may be able to be resolved and you don’t have to go through the process of finding a new policy.

Car insurance rates can be found quickly and easily. Enter your ZIP code in the FREE quote toolbox at the top of this page!

If you are unable to resolve the issue and you do decide to switch car insurance companies, there are some key things that you need to do.

You don’t want to make a hasty decision for a new provider and you also want to make sure you do not have a gap in coverage.

Better Car Insurance Rates

One of the biggest reasons drivers change car insurance companies is to save money. If you find that you are having trouble making the monthly payments for your current car insurance, finding a cheaper policy is enticing.

Before you start your search, however, you should speak with your current agent or another company representative, as there may be some other options for you.

Your agent may be able to find some other ways to save you money on your policy. There may be some discounts available that you are not currently taking advantage of.

If you have had a poor driving record in the past, some car insurance companies will offer discounts if you take a driving safety class.

Some factors that affect your premiums include:

  • driving history
  • type of coverage
  • deductible amount

If the reason your insurance premium is so high is because of your driving history, you can expect that your insurance premiums will be higher no matter which company you go with. If you focus on keeping your record clean going forward, eventually your premiums will start going down.

It would also be a smart decision to take a closer look at your policy. If you have an older car that is paid off, you may not need to carry comprehensive or collision coverage any longer, which would save you quite a bit.

You may also want to increase your deductible amount, which would also save you money.

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Poor Car Insurance Claims Service


Another reason you may be switching car insurance is that you are not happy with how your current company has handled your claims. Perhaps it has fought paying a claim, has settled for less than you thought it should, or wasn’t efficient or quick in paying out.

The reason for having car insurance is to be covered for damages caused by an accident. You pay your premiums so you should not have issues with payments of any needed repairs or medical help. This would be a good reason to switch car insurance providers.

The smart thing to do before making a quick switch is to do your research so that you don’t end up with another company that does the same thing. There are a couple of ways to find a trustworthy company in regards to the claims process.

Getting advice and recommendations from other drivers is one of the best ways to find a good company. One place to see how companies stack up with handling claims is JD Power and Associates.

On this site, consumers rate a number of car insurance providers in terms of how they handle claims.

Categories include service interaction, first notice of loss, repair process, appraisal, settlement, rental car experience, and overall satisfaction.

If the claims process is a big factor for you, choose a company that rates high in these categories.

You can also contact the insurance department in your state. It will have information about any complaints against companies, including complaints about claims. If you don’t know how to reach your state, the National Association of Insurance Commissioners can help guide you.

Always Have Car Insurance Coverage

The biggest thing to be aware of is to not cancel your current auto insurance policy without having a different one in place first. Doing this would cause you to have a gap in insurance coverage, which is not good.

Not only does having a gap in insurance mean that you are not covered during that time period, it also causes your insurance rate to increase. When you get a quote for car insurance, the company considers gaps.

Even if you just go for one day without auto insurance coverage, this can cause your premium to increase.

It is much better to have an overlap in coverage than a gap. Don’t worry about having to pay for the two policies when you switch insurance.

Once you have your new coverage in place, your agent will contact your other company and cancel your policy with them. You will be refunded for the time you had duplicate coverage.

Searching for a New Car Insurance Company

Once you have decided you are dissatisfied with your current car insurance company, your next step is to find a new one. There is a variety of ways to do this.

  • referrals from friends
  • making phone calls to different companies
  • searching online

A referral from friends, coworkers, or family members is one of the best ways to know what to expect.

According to the Insurance Information Institute, almost every driver is required to carry car insurance so it won’t be hard to find recommendations from the people around you.

Ask around and see which insurance providers the people you know use and ask what their experience has been. If you choose a company that someone you know uses, often that person will be rewarded for referring you to them, which is an extra bonus.

Another way to find a different insurance company is to call around to companies in your neighborhood and spend a bit of time getting quotes and finding out about the benefits of the provider. The internet is another great source and is easy, quick, and convenient.

You can search for car insurance companies individually or you can go to a web page such as this one and get quotes from many providers. This is the fastest way to find another insurance carrier.

You only need to fill out your information once and yet you are able to choose from multiple options. One thing to be aware of, whether you are choosing a company online or not, is that not all companies are the same.

Once you have a few options make sure you research each one to make sure you are making a good decision.

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Financial Stability

When searching for a new insurance company, make sure that the one you choose is financially stable.

The number of assets that a provider has, how long it has been around, and other factors help to determine how well it is able to pay for current and future claims as well as if it is stable enough to stick around for awhile.

One source to use to investigate a car insurance company’s financial story is AM Best. It will give you a financial rating for each company and its financial outlook. It is a good idea not to go with an insurance provider whose rating is lower than an A or A-.

Be Selective

Making sure that a company is financially stable is a good start to choosing a car insurance company. You should also be selective in other ways. Choosing a company based only on price only is often not the best way to go.

Many other factors go into an insurance policy so it is a good idea to be picky and selective.

Decide on whether you would like contact that is more personal with your provider. Sometimes a company is able to offer cheap premiums because it doesn’t use agents as middlemen to sell insurance.

If this is the case, you will be dealing with the company’s representatives over the phone or online and often, you will be dealing with different people every time you call.

If you would rather work with one agent who is easy to contact and communicate with, you may want to choose a different company.

Make sure that you are getting the amount of coverage that you need. Although the minimum insurance requirements in most states is liability insurance, and this would result in the cheapest premium possible, usually it is smartest to carry additional coverage and limits.

Research insurance coverage types and other terms through the Insurance Institute so that you understand what everything means and you are appropriately covered.

Your insurance needs will also change as your life does. You can probably get away with less coverage if you are only insuring yourself, as opposed to insuring multiple drivers. Your insurance needs will also differ if you have teenage drivers in the household.

Whatever reasons you may have for wanting to switch car insurance coverage, make sure you do it smartly.

Do your research and take the time to find the right company so that you don’t have to make another switch for a long time.

Begin your search for affordable car insurance by placing your ZIP code into the FREE box provided!

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