There are several reasons you might want to switch car insurance providers. Maybe you’ve found a better rate elsewhere or you want improved coverage. But if you’ve stuck with the same provider for years, you might have questions, such as can you switch car insurance mid policy? Or is it bad to switch car insurance companies?
While it may seem daunting, switching car insurance providers can be a good thing, and is something that's within your control as a driver. You're not stuck with the same policy or rate; you have choices that can work with your situation. Read on for everything you need to know about how to change car insurance companies and ensure it’s a smooth transition.
How to switch car insurance providers
The first step in switching car insurance providers is to review your current policy or renewal notice. This gives you an opportunity to see what sort of coverage you have, as well as what your deductibles are like. Armed with this information, you can then better compare car insurance quotes from other providers.
The next step in switching car insurance providers is to make the decision that you’re going to switch. Once you know that you’re in the market for a new insurance provider, you can reach out to an agent or compare quotes online from other providers.
Set up your new insurance policy first
It’s important to set up your new insurance policy before cancelling your current policy. You don’t want to have any gaps in your coverage, as this could affect your rate, or become an issue should you get into a collision during a time when you’re without insurance. When setting up your new policy, ask your broker any questions about how the two policies compare. You want to be sure you’re getting the right coverage for your needs.
In order to quote and set up your new insurance policy, you’ll need to provide your new provider with some basic information, including: your current insurance policy number, address, driver’s licence, vehicle registration, and other information that might earn you a discount, such as whether you’re a student or have completed a driver’s education program.
Notify your current provider that you’d like to cancel
The next step in how to switch auto insurance once you’ve settled on a new provider and policy, is to let your current insurance provider know that you’re taking your business elsewhere.
Some insurance companies may require you to provide an insurance cancellation letter; others may accept a verbal indication. Make sure you note the date you request cancellation, though, so that you’re not left without coverage or still being charged for a policy you no longer need.
Your insurance provider may offer additional discounts to entice you to stay. If you paid your premium annually, you will likely get a refund for the time remaining in your contract, whereas if you make monthly payments, you will likely be charged an administrative and/or cancellation penalty that might be equivalent to one or two months' worth of premiums. It all depends on the provider.
Cancelling auto insurance early
If you’ve been with the same provider for a number of years, you might wonder if you can switch insurance companies at any time. The short answer is yes. However, there may be financial implications to keep in mind should you wish to cancel your auto insurance early. Most insurance companies have a set penalty amount for those who leave their policies early, so make sure you do the math before switching.
Also, consider that you will be losing any benefits your insurance provider offers, such as accident forgiveness. This may mean that switching insurance companies after making a claim is not the best choice, and you should wait until the claim is cleared from your record if you want to ensure the best rate possible.
What about your policy itself, though? Can you change your car insurance policy at any time? Again, the answer is yes; you can change your car insurance policy at any time, even if you stick with the same provider. Your best bet is to contact your insurance broker or provider directly to discuss your needs and what you’re looking to change.
Whether you’re looking to switch providers for a better rate or improved service, hopefully, now you understand better how to cancel insurance policies. While it may seem daunting, it’s actually a pretty simple process that can end up saving you hundreds of dollars a year.
About the author
Caitlin McCormack is a writer based in Toronto. Her work has appeared in MSN, Food Network, HuffPost, What to Expect, Today's Parent, and Mashable, among others. When she isn't writing, she's busy chasing after her two sons, testing out new recipes, and working on her century-old fixer-upper.