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Time To Change My Auto Insurance Company?

Published July 1, 2022
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This article has been reviewed by licensed insurance industry expert Moshe Fishman.

When and why to change your auto insurance company.

Have you ever wondered if you’re paying too much for car insurance? You’re not alone. According to J.D. Power, the rising cost of auto insurance is prompting an unprecedented number of policyholders to shop around and switch insurance companies. 

Whether you’re curious if you’re paying too much or just aren’t happy with your current auto insurance provider or insurance agents, comparing prices is a smart idea if any of the following situations apply to you. 

When to consider switching your auto insurance.

Change of Address: Your zip code is a key factor in determining your insurance premium. If you’ve moved to an area with less crime, or if you used to park in the street and now have a garage, your rate should go down since your car is less likely to be stolen or vandalized. 

New Car or New Driver: If you’re adding a new driver to your policy, for example, your teenager has recently got their license, compare prices to see which company offers the best student-based discount. Adding a driver should raise your car insurance premium while removing a driver should lower it. Also, buying a new car or adding another car to your policy is a great reason to shop around. It's just a good idea.

Major Life Events: Getting married, buying a home, or changing jobs can affect your premium. Insurance companies consider homeowners and married people to be more responsible, so your rate should go down. You may want to inquire about home insurance coverage bundled with car insurance, to get a lower total rate.

Time To Renew: If your renewal date is soon, changing insurers will be an easier, hassle-free transition when you start a new policy on the day your old one ends. Just be sure there’s no lapse in coverage.

Improved Credit Score: Your credit score affects your insurance premium, so if your credit score has gone up since the last time you checked rates, your auto insurance premium should go down. 

Your Premium Increased: The criteria used to determine premiums varies among insurers. If there’s no obvious reason as to why your premium went up, for example, you haven’t added a driver or been in an accident, compare rates to see if a competitor offers a better rate. Before making a switch, check with your existing insurer to learn why you have higher rates. Especially if your driving history is clean.

Adding Specialty Coverage: If you’ve bought a boat or a classic car, your current provider might not offer the best coverage for these unique forms of transportation. 

Milestone Birthday: According to Value Penguin, insurance rates tend to drop between the ages of 45 and 55 and then steadily rise after age 60.

Change In Commute: If you’re commuting less than you used to, switching to a low-mileage policy should save money. 

How many quotes should I get?

It’s recommended that you get quotes from at least three different car insurance companies when comparing rates. When getting quotes, be sure to ask for the exact same coverage options and limits. This will allow you to make the best comparison based on the cost of the premium. Make a note of carriers that offer you special discounts that aren’t available from other insurers. Accident forgiveness might be important for you, especially if you have filed a claim in the past or had an at-fault accident.

What information do I need to get a quote?

You’ll need to provide the following information to receive a quote:

  • Vehicle Identification Number (VIN) of all vehicles on the policy.
  • The make, model, and year of all vehicles on the policy.
  • Your current home address.
  • Driver’s license numbers for all drivers on the policy.

How do I make the switch?

You’ve done your research and you’re ready to switch carriers. Follow these four simple steps to switch to a new auto insurance company.

#1 Contact your current car insurance company.

The first step in switching car insurance companies is to let your current insurer know about your intention to switch insurers. They might agree to match the lowest quote you’ve received from a competitor. Or they might offer you customer loyalty discounts and savings you’re currently missing out on. If your agent is an independent broker, they might be able to keep you as a customer by shopping your policy with various carriers, or even bundling your auto and home insurance, if that makes sense.

If they can’t give you a better rate, let them know you’re canceling and request a copy of your policy’s end date in writing. You may need to submit a written request to cancel your policy. Although most insurers don’t penalize policyholders for switching, ask if you’ll be subject to any cancellation fees. You don't want to find out the hard way after you have switched companies.

Also, if you’re canceling in the middle of a policy, ask about how the remainder of your policy premium will be refunded. They’ll either mail a check or provide a credit to the card you used to pay the policy. 

#2 Avoid gaps in coverage.

It’s imperative you make sure there are no gaps between the end date of your old insurance and the start date of your new insurance. Set your new policy to start on the last day of coverage on the old policy.

This will ensure that you’re fully covered. Also, having continuous coverage is a discount offered by some insurance companies. Having a lapse in coverage can result in being charged more for insurance down the road. 

#3 Get your new ID card.

In case you’re pulled over or in an accident, you’ll want to have your most current insurance card handy. Many insurance companies now offer digital copies of insurance cards through the insurer’s app. Or you can download a digital copy and store it on your phone. If you want to keep a hard copy on hand, print it out and keep it in a convenient place should you need to access the information quickly. 

#4 Inform your lender or leasing company.

If you’re leasing your vehicle or paying off a car loan, you’ll need to inform them of your change in coverage. This is because they may require you to carry a minimum amount of coverage. They’ll want to make sure you have enough insurance for the vehicle you’re leasing or have a loan for. They might request proof of insurance from the new provider. 

Comparing rates is easy!

Comparing rates between auto insurance companies is a straightforward, painless process that can save a lot of money. Today’s technology makes it easy to shop around online for the coverages and rates that meet your particular needs. 5 Minute Insure provides an easy online way to compare rates.

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