We’ve all thought about switching car insurance at least once since purchasing a new vehicle. A cheaper deal or better coverage might seem appealing but, not following the right steps can result in the opposite.

Switching car insurance companies is an undesirable task. It involves a fair amount of research and comparison across the board, and not knowing where to start can make it even more difficult.

Fortunately, we’ve done the research on how to switch insurance companies to make the transition easier.

Changing Insurance Companies – 5 Easy Steps

Switching car insurance companies without the proper information on the different coverages your current company has might cause you more frustration and disappointment. Before you make the trade, you need to understand what your needs are and why you want to switch.

Before you decide to cancel coverage at your current insurer, you need to have done your research and already have a new insurer ready. A lapse in car insurance could result in problems in the future.

Follow these easy steps for a seamless transition into a new insurance company.

1. Go Over Your Current Policy and Decide Why You Need To Switch 

The current policy in place might not offer sufficient coverage or the premiums might be too high. Read the current policy that has been set in place, contact your insurance provider and ask them if they can adjust the policy accordingly. More often than not, insurers will be accomodating and place new options on the table.

2. Compare Insurers

Collect quotes from at least three car insurance providers. Be sure to compare benefits and coverage to your current agreement. Be on the lookout for other offers that your current provider might not have in place, like free roadside assistance or annual bonus payouts.

Look at forums online where customers discuss their service experiences. Online forums are a treasure trove of information available to consumers. Here you will find honest reviews written by real customers.

3. Navigate The Best Quotes

Once you have compared all the benefits on offer, contact your chosen insurance provider and discuss the terms and conditions. Be sure that you understand and agree to the fine print on the documents.

Once you have found the right insurer that will cover all your needs, get all the documents in writing.

4. Avoid a Lapse

Contact your current insurance provider and inquire about the cancellation process. Some insurance companies might charge a cancellation fee, and others might owe you a policy refund.

Read your current agreement and make sure that you understand your rights and liabilities to avoid unwelcome surprises.

Record the cancellation in writing to avoid any extra charges and bills down the line.

5. Let Your Lending Company Know About The Switch

If the vehicle has been financed by a third party, it’s important to contact the lender and inform them about the switch. Lenders need to stay privy to any and all changes regarding insurance.

Ask the new insurance company to send proof of policy documents to the lender and to yourself.

Can You Cancel Auto Insurance At Any Time?

Cancelling car insurance is by no means easy or hassle-free. However, insurance companies claim that clients can cancel policies at any time.

It is deemed to be inadvisable and unwise to go without car insurance for any length of time and knowing when to cancel your policy can avoid fees and penalties.

How To Cancel Auto Insurance

Go through the process of finding a new insurer and get the policy in place. Make the first payment to the new company before cancelling the coverage at your previous insurer to avoid a lapse in coverage.

Pro Tip: The prime moment to cancel the policy with the current insurer would be at the renewal stage.

Plan The Cancellation To Avoid Penalties

Even though insurance companies claim that consumers are able to cancel their policies at any time, they might face a significant cancellation fee. The method in which you cancel your coverage will determine the penalties you might face down the line.

Cancellation fees can vary depending on the insurance company and policy but is most likely a percentage of the premium or a set lump sum. In order to avoid these pesky fees, the customer has to plan the cancellation in advance and strike when the policy is in the renewal phase.

Pro Tip: At no point should you stop paying your premium until you have the cancellation in writing. Most insurance companies have a set amount of payments that you can miss until they cancel your policy – which will reflect negatively on your record.

Switching Car Insurance – The Alternatives to Cancellation

Some insurance companies will be accommodating towards policy switches and income changes. The first option would be to communicate with your current insurer and change the current coverage.

Reducing Coverage

Analyze the current coverage and determine whether or not it is necessary. Typically, we can simply reduce the coverage options and therefore reduce the monthly premium amount.

If the use of the car has changed or the annual mileage has dropped, take those changes up with the insurer and alter the policy accordingly.

Pro Tip: Some insurance companies allow a pause on insurance and payments. If the vehicle is not being used, contact the insurer to put a halt on coverage and payments.

Switch Auto Insurance – Final Thoughts

Going without coverage is highly inadvisable, even for a day. But, your coverage needs will change with time as you get older, buy new vehicles, or even move around the country. 

When you want to change insurance companies, shop around for suitable insurance coverage following any major change. This change can be for a new insurer or a policy change at the current company. Planning a cancellation is crucial to avoid disappointment and a lapse or a cancellation fee.