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If you’re wondering whether it’s bad to switch auto insurance companies, you’re not alone. In this article, we give some tips for safely shopping around and finding a great insurance provider.
Whether you lease your vehicle, have financed it, or own it outright, having car insurance is a must. The better your policy, the more protection you will have in the event of an accident. The good news is that having great coverage does not necessarily mean paying exorbitant fees. And shopping around is almost always a good thing.
Our experts have reviewed every major insurance provider in the nation and have identified the best car insurance companies so you can buy with confidence. To go ahead and start comparing free car insurance quotes, enter your zip code above.
Why You May Want to Switch Car Insurance Companies
First, let’s address the elephant in the room: Is it bad to switch auto insurance companies? The simple answer is no. There are no negative effects that directly result from changing your auto insurance provider.
In fact, there are many reasons why drivers may want to make a change. For instance, a different carrier may provide you with identical coverage at a cheaper rate, or perhaps that carrier can offer you better coverage at the same rate. If you are dissatisfied with your current provider’s customer service or claims fulfillment, you should consider making a change.
Even if you are satisfied with your current provider, certain life events may occur that make a switch a smart idea. For example, if you recently moved, your rates may have increased, since all providers factor in your geographical location to calculate rates. However, some companies may not penalize you as heavily as others for location changes.
Another consideration is if you have just been involved in an accident. Auto insurance providers calculate your rates by conducting a risk assessment, and being involved in a crash will often cause your rates to increase. However, some companies, like Progressive, specifically offer auto insurance for high-risk drivers.
When you are nearing the end of your policy, it never hurts to compare quotes and shop for a more affordable rate. This is especially true if you have recently filed a claim or have been in an at-fault crash.
How to Change Auto Insurance Companies
If you have been with your current provider for a while, the thought of changing auto insurance companies might be a bit stressful. The good news is that you don’t have to worry, as changing insurance companies is actually quite easy.
The first step is to start researching new companies and obtain some quotes. You can do this in a number of ways:
- Get a quote from a provider’s website
- Call a provider directly
- Visit an insurance agent in person
- Use an online quote comparison tool to get quotes from multiple companies at once
After you have found your new provider, be sure to activate the policy before canceling your old one, as you want to avoid a lapse in coverage at all costs. As soon as you are sure that your new policy is active, contact your current provider to cancel.
Can You Cancel an Auto Insurance Policy at Any Time?
Yes, you can cancel an auto insurance policy at any time. However, a lapse in coverage can have catastrophic consequences. In most states, car insurance companies will notify the DMV if you have a lapse in coverage. This can bring about serious ramifications, like the suspension of your driver’s license. So make sure your new policy is in place before cancelling existing coverage.
This rule applies whether you are making a change mid-policy or at the end of your current term. For example, let’s say that your coverage ends at midnight on the first of May and you do not plan to renew your policy with that same company. You must have coverage from another provider that is effective on the first of May to avoid a lapse.
Keeping that in mind, it may be more costly to cancel your policy mid-term. If you paid your entire policy as a lump sum, you may have to forfeit part of the provider’s discount and only receive a partial refund. Many providers also charge termination fees. For these reasons, the most affordable option may be to wait until your current policy ends before making a switch.
Pros and Cons of Changing Auto Insurance Companies
The most obvious benefit of switching to a new insurance company is cost. Most drivers make a change because their current policy is too expensive. In addition, a new company may provide better coverage to suit your driving habits. Switching companies is especially appealing if you have had a bad experience with your current provider.
In terms of disadvantages, some providers charge termination fees. You may also forfeit accident forgiveness or loyalty discounts when you make a switch. But as long as your new provider offers a cheaper rate and comparable coverage, losing these discounts is not a reason to avoid making the change.
Finally, you may need to get a new agent. Drivers who value familiarity are often deterred by this. Fortunately, the industry’s top providers typically offer excellent customer service. As long as you choose a company that places a high value on the client experience, you can expect a smooth transition.
Our Recommendations for Auto Insurance
If you’re ready to switch auto insurance companies, we recommend Progressive and GEICO. These two providers topped the list in our industry-wide review for competitive rates and comprehensive coverage. Both have exceptional reputations for customer service and high ratings from experts like AM Best and the Better Business Bureau.
To compare quotes from Progressive, GEICO and other top insurers in your area, enter your zip code below.
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Progressive: Best for High-Risk Drivers
Progressive is a good choice for high-risk drivers thanks to its low rates and many discount opportunities. Drivers can take advantage of a usage-based insurance program, as well as small and large accident forgiveness. In our review, we awarded Progressive a score of 9.1 out of 10.0.
GEICO: Best Overall
GEICO is one of the nation’s oldest auto insurance providers. We recognized the company as the best overall choice for most drivers and gave it a score of 9.1 out of 10.0. In addition to standard coverage, you can get mechanical breakdown insurance, rideshare insurance, and roadside assistance. The insurer is also known for providing an excellent customer service experience.
FAQ: Is it Bad to Switch Auto Insurance Companies?
Can I switch mid-policy?
Yes, you can switch your car insurance coverage mid-policy or at the end of your current term. If you are currently paying high rates to a subpar company, switching immediately may be the smartest choice.
Should I wait until my policy ends to switch?
The answer depends on your situation. For some drivers, waiting to switch will be easier and can help them avoid additional fees. However, if you are paying high month-to-month premiums to your current provider, an immediate swap may be more beneficial.
Should I get new coverage first?
Yes, you must get new coverage before canceling your old policy. Failing to do so will result in a lapse in coverage and can even result in your license being suspended.
Is it bad to switch auto insurance companies frequently?
Not necessarily. Some drivers make a swap every six months to a year. One disadvantage of this approach is that you will not earn loyalty discounts. But shopping around for coverage regularly can mean finding better overall rates.
The Detroit Bureau collects data from every major car insurance provider to formulate rankings of the best insurers. Our in-depth rating system takes into account market share, coverage, pricing, customer satisfaction and ratings from industry experts. Each insurer is given a weighted score in four categories, as well as an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.