How to Switch Car Insurance Companies & Avoid Fees: Five Easy Steps

Q: Can you switch car insurance after an accident?

You can switch car insurance after an accident , but it won’t remove the incident from your record. Some insurers may raise rates for up to three years, unless you have accident forgiveness. However, you might still find cheaper rates with a new provider.

Q: Do you need to cancel your car insurance when switching?

Yes, you’ll have to cancel your current car insurance . To avoid a coverage lapse, only cancel after you’re sure your new coverage is in effect.

Switching car insurance companies is a simple process that can save you up to 52% on premiums, potentially over $1,000 annually, while ensuring you maintain continuous coverage through five easy steps.

Find out if you're overpaying for auto insurance below.

By Mark Fitzpatrick

Reviewed by Mark Friedlander

Edited by Venus Zoleta

Updated: May 18, 2025

Advertising & Editorial Disclosure

Key Takeaways

Switching car insurance is simple. Purchase a new policy and cancel your current one, ensuring the new policy starts immediately after the old one ends to avoid coverage gaps that could lead to higher rates. See below for money-saving tips.

Shop for new rates at least 30 days before your renewal date to avoid cancellation fees. You can cancel your policy at any time.

Drivers who compare and switch save 18% on average and those who switch from the most expensive to the least expensive company can save up to 52% based on our cost analysis.

Reasons to Switch Car Insurance Companies

1
Significant Cost Savings (Up to 52%)
Our 2025 study reveals consumers save an average of 18% (or $225 on average) when switching providers, with potential savings up to 52% (potentially over $1,000 savings) in certain situations. In our customer surveys we found that 86% of buyers were able to save by comparing and switching. J.D. Power's 2024 Auto Claims Satisfaction Study found that 48% of survey respondents had a cost increase during the previous 12 months
2
Better Coverage Options for Your Current Needs
Life changes call for coverage updates, yet many drivers miss this important step. Most people set their insurance once and forget it, creating coverage gaps they discover after an accident. Insurers have different standout features with some offering better bundling, others better replacement coverage or EV protection. That's why finding the right coverage is often more important than finding the lowest price.
3
Better Customer Service and Claims Experience
While price matters, insurance quality truly shows when you file a claim. According to J.D. Power's 2024 Claims Digital Experience Study, digital channels for claims now outperform traditional phone-based communication, with customers who submit photos and receive updates entirely through mobile apps reporting significantly higher satisfaction scores. When shopping, compare claims satisfaction ratings, and digital capabilities, alongside price.

Switch Your Car Insurance in 5 Easy Steps

Switching car insurance is simple and could save you hundreds or even $1,000 annually. You can cancel your current policy at any time, and most insurers provide a pro-rated refund for unused premium, though some require 30 days notice.

Follow these five easy steps to switch while avoiding coverage gaps:

Step 1: Determine how much coverage you need
Step 2: Evaluate your cancellation fees if any
Step 3: Research and compare quotes
Step 4: Buy your new policy
Step 5: Cancel your old policy and notify lender

Step 1: Determine How Much Coverage You Need

Your insurance needs depend on state requirements, your vehicle's value, and personal circumstances. Consider these five key factors:

1
Determine the right liability coverage
A 50/100/100 policy provides $50,000 bodily injury per person, $100,000 per accident, and $100,000 property damage.
Each state has a minimum requirement for liability coverage. Minimum coverage amounts are cheaper but may not protect your assets in the case of an accident. MoneyGeek recommends 100/300/100 liability coverage for most drivers.
2
Determine if you need full coverage (collision and comprehensive)
Before switching insurance providers, determine if you need full coverage (comprehensive and collision). While liability covers damage you cause to others, full coverage protects your own vehicle. Consider these key factors when making your decision:
- Required for financed vehicles: Lenders require full coverage for financed or leased vehicles
- Comprehensive covers: Theft, vandalism, weather damage to your vehicle
- Collision covers: Repairs to your car after accidents regardless of fault
- Keep both coverages if: Your car is newer, valuable (worth >$3,000), or you can't afford out-of-pocket replacement
- Consider liability-only: When full coverage premiums exceed 10% of your car's value or is valued less than $3,000
3
Evaluate your annual mileage
This lesser known tip can save you money: Many drivers overestimate their annual mileage and pay higher premiums than necessary. Track your actual usage through odometer readings or service records. Driving under 7,500 miles annually can qualify for discounts up to 25%.
4
Evaluate your deductible
Choosing a higher deductible significantly lowers your premiums as you assume more financial responsibility; increasing from $500 to $1,000 can reduce premiums by 10-25%.
5
Evaluate if you can bundle home and auto
Combining home and auto insurance with the same provider can save up to 25% on premiums, with some insurers offering additional perks like a single deductible for events that damage both your home and car.

Step 2: Check Your Current Policies Cancellations Fees

Negotiating your current policy While base rates are regulated, you can request additional discounts or adjust coverage when your insurer knows you're considering competitors. See our guide to negotiation tips.

Understand cancellation fees Some companies charge no fees to cancel, while others charge a flat fee or percentage of remaining premium. Many require 30-day notice to avoid penalties.

Avoiding cancellation fees

Time your switch with renewal: Switch when your policy is about to expire
Request a fee waiver: For special circumstances like military deployment or relocation
Check state regulations: Some states limit or prohibit cancellation fees

Cancellations Fees for Largest Insurance Companies

Insurance Company	Typical Fee Amount
GEICO	10% of unused premium
Progressive	$50 flat fee or 10% of remaining premium
State Farm	$0 in most cases
Allstate	0-10% of remaining premium
Nationwide	$0 in most cases
Liberty Mutual	10-15% of unused premium

Step 3: Research and Compare Quotes

To save on auto insurance, comparing quotes from multiple providers will help you save. We recommend getting a quote from 3-5 companies. Travelers, State Farm, and Progressive offer the cheapest rates when you switch and the right provider depends on your driver profile outlined in the table below. While USAA often offers even cheaper rates, but it's available only to military members, veterans and their families.

These rates are national averages, and actual costs may vary. See our ranking of the cheapest full coverage and cheapest liability-only options.


Overall	Travelers	$1,110	$1,312	$-202
Seniors	Travelers	$1,094	$1,273	$-179
After a Speeding Ticket	State Farm	$1,448	$1,645	$-198
After an Accident	State Farm	$1,578	$1,958	$-380
DUI	Progressive	$1,664	$2,211	$-547
Bad Credit	Nationwide	$1,670	$2,308	$-638
Military	USAA	$824	$1,251	$-426
Young Drivers	Nationwide	$1,857	$2,247	$-390
Expensive Cars	State Farm	$1,733	$2,230	$-497
Newer Cars	State Farm	$1,419	$1,747	$-328

When choosing a car insurance policy, consider factors in addition to cost. If you value customer service in a time of need, MoneyGeek also ranked the best auto insurance companies offering a balance of quality service and affordability.

Step 4: Buy Your New Policy to Prevent Lapse in Coverage

Always secure your new policy before canceling the old one. Ensure the new policy's start date aligns with your old policy's end date to avoid even a single day without coverage, which can trigger rate increases.

Request digital confirmation of your new coverage while waiting for official documents, and only then cancel your previous policy.

CONSIDER OTHER INSURANCE POLICIES TOO

When switching car insurance, consider other policies you hold. Many find the cheapest rates by bundling home and auto insurance with the same provider. If you have homeowners, renters or umbrella insurance, compare quotes to see if bundling discounts (up to 25%) offer savings. Not all insurers provide the same level of bundling discounts.

Step 5: Cancel Your Old Policy & Notify Lender

Cancel your old policy immediately to avoid overlap. Switching doesn’t eliminate any past-due premiums or cancellation fees with your previous insurer.

When you cancel, notifying lenders when switching insurance policies ensures compliance with your loan or lease agreement.

Timely notification is required: When switching insurance, notify your lender promptly (typically within 14-30 days) to avoid force-placed insurance, which is significantly more expensive than standard policies.
Loan agreement requirements: Your loan agreement requires continuous insurance coverage.
Documentation needed: Provide your lender with proof of your new policy.

Switching Timelines: When to Change Your Car Insurance

Switching car insurance can be a smart move for better rates, service or after major life changes. Here are key considerations:

Policy expiration

Changing providers at renewal can help avoid fees. Most insurers won't charge cancellation penalties if you switch when your current policy term ends, making this the best time to make a change.

Moving

Rates vary by location, and your insurer may not operate in your new state. Insurance companies track claims by ZIP code, so even moving just a few miles away can impact your cost.

Marriage or divorce

Married couples typically qualify for special discounts, and insurers usually require spouses sharing a residence to be on the same policy. A divorce typically requires that you start new separate policies.

Adding a teen driver

Some insurers offer better discounts and lower car insurance rates for teens. Look for companies that provide good student discounts (up to 25% off) or usage-based insurance programs with apps that monitor driving habits and can save up to 30%. Some insurers offer better discounts and lower car insurance rates for teens.

Going to college

Student discounts or location changes can impact your rates. If your student is attending college without a car, you might qualify for a distant student discount.

Buying a new car

A different provider may offer better coverage for your new vehicle. Some insurers specialize in certain vehicle types or offer specific features like new car replacement coverage, gap insurance, or better rates for certain models based on their safety records and repair costs.

Significant credit score improvement

In most states, an increase in your credit score means better insurance rates, as insurers often use credit-based insurance scores to determine risk and pricing.

Changes in annual mileage

Lowering your estimated mileage typically results in lower insurance costs. If your driving frequency changes, you can lower your annual mileage estimate.

Bundling opportunities

If you've recently purchased a home, bundling policies with a single company typically offers multi-policy discounts that can save 5-25% across all your insurance needs.

Clean driving record

As tickets and accidents age off your record (typically after 3-5 years), your risk profile improves. Many drivers don't realize this is an excellent time to switch, as different insurers weigh past violations differently

Can You Switch Car Insurance Any Time?

Yes, you can switch car insurance at any time, though switching at policy expiration typically helps avoid potential cancellation fees. Here's what to know:

Avoid coverage gaps, even for one day
Most major insurers don't charge cancellation fees, but some might
You'll usually get a refund for unused premium if you paid in advance
If your car is financed or leased, notify your lender about the change
Switching with an open claim may result in higher rates later

Digital Tools and Technology for Easy Switching

Today's technology makes switching car insurance faster and more convenient than ever:

Comparison Platform: MoneyGeek allows you to compare quotes from multiple insurers simultaneously by entering your information just once. This can save hours of research and help you find the best rates in minutes. See our car insurance calculator.
Mobile App Features: Most major insurers offer apps with policy management tools that make switching seamless. You can upload documents, make payments, and access your insurance ID cards instantly, eliminating paper-based delays.
Digital Insurance IDs: Nearly all states now accept digital proof of insurance. Once you've purchased a new policy, you can immediately store your insurance card in your phone's wallet app, making the transition to new coverage instant.

Documents and Information Needed to Switch

Here are the documents and information you will need to switch:

Driver's license information for all drivers on the policy
Vehicle registration documents showing VIN, make, model, and year
Current insurance policy details including coverage types, limits, and expiration date
Declarations page from your current insurance policy
Driving history including accidents, tickets, claims in the last 3-5 years
Vehicle mileage odometer reading
Payment information
Proof of address, typically a utility bill or similar document
Lender information if your vehicle is financed or leased
Discount qualification information such as proof of defensive driving courses, good student records, etc.

Will Switching Car Insurance Impact Your Credit Score?

Switching car insurance providers will not directly impact your credit score. Insurance companies typically use "soft inquiries" when checking your credit for quotes, which don't affect your score regardless of how many companies you contact. While insurers in most states use credit-based factors to calculate rates, the act of switching itself has no negative effect on your credit standing.

When to Avoid Switching Car Insurance Companies

Switching insurance providers often saves money, but changing mid-policy requires careful consideration. Knowing when to stay with your current company helps prevent mistakes and coverage gaps that could eliminate your potential savings.

When to Avoid Mid-Policy Switches

1
Pending claims
Wait until at-fault claims are resolved to avoid rate complications with your new insurer
2
High cancellation fees
Some insurers charge penalties that could eliminate any savings from switching
3
No confirmed policy
Never cancel current coverage without securing the new policy first
4
Valuable loyalty benefits
Long-term customer perks may exceed savings from switching
5
Inadequate research
Ensure you're comparing equivalent coverage before deciding

How to Change Car Insurance Companies: Bottom Line

Switching car insurance is straightforward and can save you up to 52% on premiums. The best times to switch are during policy renewal, after moving, adding drivers, or buying a new vehicle. Always secure your new policy before canceling your current one to maintain continuous coverage. When comparing options, consider both price and service quality. For financed vehicles, notify your lender and update your insurance ID. The entire process can be done same-day when you're prepared with the right information.

Switching Car Insurance Companies: FAQ

We answer frequently asked questions below to help you better understand the process of switching car insurance companies.

What’s the best time to switch car insurance?

A life change — such as moving to a new location, adding a family member to a policy or purchasing a new vehicle — is a great reason to switch car insurance. You can also update your policy to find better rates or coverage.

Can you switch car insurance at any time?

It’s possible to switch car insurance, even midterm. However, you may need to pay a cancellation fee when you terminate your old policy.

Can you switch car insurance after an accident?

You can switch car insurance after an accident, but it won’t remove the incident from your record. Some insurers may raise rates for up to three years, unless you have accident forgiveness. However, you might still find cheaper rates with a new provider.

Can you switch car insurance if you owe money?

You can switch car insurance with past-due premiums, but you still must pay what you owe to your previous insurer.

Do you need to cancel your car insurance when switching?

Yes, you’ll have to cancel your current car insurance. To avoid a coverage lapse, only cancel after you’re sure your new coverage is in effect.

How long does it take to switch car insurance companies?

The process can be completed in less than a day or in hours in some cases. Purchase your new policy first, confirm it's active, then cancel your old one. Most insurers can provide immediate coverage and digital proof of insurance while you wait for physical documents.

Will switching car insurance affect my credit score?

No, switching car insurance providers won't directly impact your credit score. While insurers may check your credit when providing quotes in most states, these are considered "soft inquiries" that don't affect your credit score.

Can I switch car insurance if I have a high-risk driving record?

Yes, you can switch with a high-risk driving record, though you may have fewer options and higher premiums. Some insurers specialize in high-risk coverage and might offer better rates than your current provider despite your record. Our analysis indicates State Farm has the best rates for those with accidents or violations.

Will I get a refund if I switch car insurance mid-policy?

Yes, most insurers provide a pro-rated refund for any unused premium you've already paid, minus any applicable cancellation fees.

Do I need to inform the DMV when I switch insurance companies?

This varies by state. Some states require notification while others receive updates directly from insurance companies. Check your state's DMV requirements.

How quickly can I get coverage from a new insurer?

Most insurers can provide immediate coverage and digital proof of insurance within hours of application, allowing for a same-day switch when needed.

Should I switch for a small savings?

Consider more than just price. A small savings (under $100 annually) might not justify switching if you're satisfied with your current service, especially when factoring in potential cancellation fees.

Our Review Methodology for Switching Car Insurance

MoneyGeek analyzed car insurance rates using data from Quadrant Information Services and state insurance departments to determine average costs based on policy types. The study includes 902,880 quotes from 64 companies across 700 ZIP codes.

Driver Profile:

40-year-old male
Drives a Toyota Camry LE
Clean driving record
12,000 miles driven annually

We adjusted this profile for age, location and driving history to calculate various rates.

Coverage Levels and Deductibles:

Liability insurance covers damage to others' property.
Full coverage includes comprehensive (damage from weather, fire, etc.) and collision (damage from accidents) coverage.

The 100/300/100 term means:

$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$100,000 property damage liability per accident

A deductible is the amount you pay before the insurer covers the rest of the loss.

Learn more about MoneyGeek's methodology.

Changing Car Insurance Companies: Related Pages

Auto Insurance

Switching Car Insurance After an Accident

Auto Insurance

Transfer Car Insurance to a New Car: A How-to Guide

Auto Insurnace

Car Insurance Basics 101

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

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