How to Switch Car Insurance Companies

Most drivers overpay for car insurance because they don't shop often enough. We went through the full switching process with 12 major carriers, timed the quotes, reviewed the cancellation policies, and built the fee table below from the actual policy documents. Here are five steps so you can switch in under an hour without ending up uninsured for a day or hit with an unexpected bill.

Before switching insurers, take ten minutes to review your current coverage. Pull up your current car insurance policy and check your liability limits, deductibles and any optional coverage like collision, comprehensive, roadside assistance and rental car reimbursement. You can choose the same coverage with your new insurer, but switching is also a good time to make changes if you want to adjust coverage. 

Two adjustments worth considering: if your car has dropped in value below $5,000 since you bought the policy, you may be able to drop comprehensive and collision and lower your bill. If your assets have grown, raising your liability limits gives you better protection. For a full breakdown of how much car insurance you need, see our guide.

Before you start, have your driver's license number, vehicle VIN, current policy number and the license numbers of any other drivers on your policy ready.

Get quotes from three to five carriers using identical coverage levels. Your declarations page has your exact limits, deductibles and coverage types so you can match them precisely when quoting rather than guessing.

You have three ways to get quotes when switching car insurance companies. Going directly to carrier websites takes more time but produces binding rates. MoneyGeek's car insurance calculator shows multiple options at once and is faster, though rates are not final until you apply. MoneyGeek's compare quotes tool pulls binding rates across carriers in one place.

There is no single cheapest carrier. Rates are priced individually based on your driving record, location, age and credit score, which means the cheapest option for your neighbor may not be the cheapest for you. That is why getting at least three quotes is the only way to know your actual number.

Do not shop on price alone. A lower rate means nothing if the carrier is hard to reach after an accident. Check MoneyGeek's best auto insurance companies rankings, which score carriers on both affordability and claims service, before making a final decision.

Most drivers can switch car insurance mid-policy without a fee. Call your current carrier and ask directly whether they charge a cancellation fee and whether your situation qualifies for a waiver. Common waiver conditions include military deployment, job loss and moves to a state where your carrier does not operate.

If there is a fee, do the math before assuming it wipes out your savings. A $50 cancellation fee costs less than one month of overpaying at a higher rate. The table below shows what each major carrier charges so you know your number before you call.

Switching at your renewal date avoids fees entirely since your policy ends naturally. Start shopping at least 30 days before your renewal date so your new policy is ready to start the day the old one ends.

Buy your new policy before you cancel the old one. Most carriers provide immediate coverage and digital proof of insurance the same day, so there is no reason to cancel first and buy second. Even a single day uninsured is illegal in most states and can cause your next carrier to charge you higher rates.

Before you cancel, confirm that the start date and time of your new policy are correct, that all drivers and vehicles are listed, and that your payment method is set up so your coverage does not drop on day one due to a billing issue. Request digital confirmation of your new policy before you make any cancellation call.

Once your new policy is confirmed and active, call your old carrier to cancel. You can also cancel through their app or your agent. Get the cancellation date in writing so you have a record.

How Refunds Work

Your refund is based on the unused days left in your policy term. Cancel a six-month policy worth $600 after three months and you get roughly $300 back. If you are on a payment plan and have not paid for the full term yet, your carrier subtracts what you owe from the refund. In some cases you will owe them money rather than receive anything back. They will send a bill for the remainder.

Notify Your Lender

If you have a car loan or lease, send your new declarations page to your lender as soon as you switch car insurance. Most loan agreements require notification within 14 to 30 days. If you miss that window, your lender can buy insurance on your behalf, which costs more than a standard policy and only covers the lender's interest in the vehicle.

There are four situations where you are better off waiting before you change car insurance.

1. You have an open claim. Your current carrier handles any claim that occurred under your policy even after you switch. The problem is that a new carrier can see the pending claim when pricing your policy and charge you more because of it. Wait until the claim is resolved before shopping for a new policy.
2. The cancellation fee wipes out your savings. Run the math before you switch mid-policy. If your cancellation fee is $150 and switching saves you $20 a month, you break even after seven months. If you are within two months of renewal, waiting costs you nothing and avoids the fee entirely.
3. You do not have a confirmed new policy. Never cancel your current policy until your new one is active and confirmed in writing. A quote is not a policy. Do not cancel based on a rate you saw online that has not been finalized.
4. You have switched recently. Switching carriers frequently can signal risk to insurers and some may be less willing to apply discounts or offer their best rates. If you switched in the last six months, it is worth staying put unless the savings are significant.

We answer common questions about switching car insurance companies.