Can I Switch Car Insurance After an Accident?

Generally, you can switch providers and change car insurance policies at any time. However, depending on the rules set by your insurance company, you may be required to pay a cancellation fee if you’re in the middle of your policy when you switch.

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Last Updated: 5/13/2022
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If you are not satisfied with your insurance provider, switching car insurance is an option. You can simply discontinue your policy and change to a new one, but your current insurer may charge a cancellation fee.

Changing insurers is possible at any time. That means switching car insurance after an accident is not prohibited, even if you have an open claim. Your current insurer will still deal with the accident, and you will still have to work with them to settle your claim.

However, switching car insurance after an accident may not always be your best option. To help you decide when to find a new insurer, MoneyGeek explored steps to take to switch coverages after an accident, factors to consider and tips for reducing costs.

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Can You Switch Car Insurance After an Accident?

Being involved in an accident does not prevent you from switching car insurance companies. You can change auto insurance policies at any time if you find a better deal.

The average cost of auto insurance for an average driver is $1,424 per year. An accident on your record will increase that to $2,237 annually.

Can I Switch Auto Insurance With an Open Claim?

You can switch auto insurance with an open claim. Doing this will not affect your claim. That means you will have to work with two separate insurance companies. You will continue to deal with both insurers until your first insurer settles your claim.

How to Switch Car Insurance After an Accident

Typically, switching car insurance companies is a simple process. Once you find the right coverage from a new company, you can contact your old and new insurers to coordinate the switch. To help you better understand the process and avoid mistakes, MoneyGeek breaks down the process in a step-by-step guide.

1

Determine how much coverage you need.

You can change car insurance at any point, and your first step is to determine how much car insurance you need. Consider state requirements and the cost of your recent accident as well.

2

Evaluate cancellation fees and refunds.

Contact your current insurer to determine whether you are qualified for refunds or whether the insurer charges cancellation fees. If you have an open claim, find out if it will affect your credentials.

3

Research and compare car insurance quotes.

Finding the best car insurance after an accident can be challenging. Premiums tend to be higher after an accident because insurers deem you riskier. You can still find good deals by researching your options. Comparing car insurance quotes from multiple companies can help you save.

4

Buy a new policy before canceling your current policy.

A lapse in insurance coverage can cause various problems, including increasing your future rates. If your coverage lapses and you get into an accident, especially if you are at fault, you may pay out-of-pocket for damages. You may also be charged fees or higher rates due to the lapse. Wait to cancel your current policy until you buy a new one to prevent these extra costs.

5

Swap your old ID with your new one.

Finally, don’t forget to swap out your old insurance identification with the new one, physically or digitally. You can switch your IDs in your wallet or glove box or download your new insurer’s digital card.

Can You Switch Insurance Companies at Any Time?

You can switch your car insurance provider at any time. However, doing so may not always be your best option.

If you decide to change car insurance companies after an accident, remember that you will be dealing with two companies until your open claim is settled. Your old car insurance provider will be handling your claim.

If you plan to switch car insurance after an accident to get a cheaper premium, you may be disappointed. While insurance costs vary per insurer, most companies charge higher premiums if you have an accident on your record. Additionally, insurers typically cannot make premium changes mid-policy.

Should I Switch Car Insurance After an Accident?

The best car insurance companies offer a balance of affordability and quality customer service. If you are dissatisfied with their current insurance provider, you can switch companies at any time. Be sure to consider your unique circumstances and needs first.

What to Consider Before Switching Car Insurance After an Accident

You can change car insurance companies at any point. However, if you are switching car insurance after an accident, there are various factors you will want to consider before making a final decision.

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    Your premiums could go up.

    A crash will increase your rates, especially if you are at fault. That said, insurance companies typically cannot change premiums mid-policy. Shop around and compare rates for the best chance to find the best deal for you.

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    The best (and cheapest) company varies by person.

    The best and cheapest car insurance depends on your needs and driving record. In addition to insurance costs, you may also want to consider the provider’s quality of service.

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    You may have to pay cancellation fees.

    You may have to pay a cancellation fee for discontinuing your insurance mid-policy.

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    You may be eligible for a prorated refund.

    Check if your insurer offers prorated refunds of your unused premium. Sometimes insurers deduct fees from this refund.

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    You could lose discounts and coverages.

    Switching car insurance may cause you to lose your discounts and coverage specific to your former carrier. We recommend checking that your new rate is at least as affordable as your current rate (with discounts) before signing up for a new policy.

Why Switching Car Insurance After an Accident Is a Good Idea

Depending on your circumstances, switching car insurance after an accident can be beneficial. You may find better deals than your current plan by shopping around and comparing quotes from multiple insurers.

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SWITCH YOU CAR INSURANCE IF:

Before deciding to switch car insurance after an accident, make sure it is the best option for you. The following show when switching is a good idea:

  • You will have to pay higher rates when your current plan renews.
  • You find a cheaper company with better services than your current insurer.
  • Your current insurance provider offers prorated refunds for the unused portion of your premiums.

Why Switching Car Insurance After an Accident Is a Bad Idea

In some cases, switching car insurance after an accident is not ideal. If you can’t find a better deal than your current plan, consider sticking with your current provider.

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KEEP YOUR CAR INSURANCE IF:

Check the terms and conditions of your policy before switching companies to avoid possible penalties or fees. Some reasons you may decide not to change plans include:

  • Your current insurer will charge a fee when you cancel your auto insurance policy.
  • If you don’t qualify for a refund of your unused premiums. Some companies have a specified period for a prorated refund.
  • You may lose discounts and coverages that benefit you under your current plan.

Reducing Car Insurance Costs After an Accident

Insurance companies charge higher rates if you have a collision on record because they consider you a high-risk driver. That said, it is possible to reduce car insurance after an accident.

Several factors affect the cost of insurance, including your location, age, credit score, car make and model, coverage needs and driving record.

Depending on the accident, your car insurance premiums might go up when your plan renews or you switch to a new insurer. Fortunately, there are ways to reduce car insurance after an accident.

1

Tell your insurer about the accident immediately.

Regardless of the severity of an accident, it is vital to inform your insurer right away. Failure to do so may give them a reason not to honor your policy.

2

Take a defensive driving course.

By taking a refresher course, you show your insurer that you are trying to improve. Some insurers also offer discounts for completing a defensive driving course.

3

Increase your deductible.

Choosing a higher deductible can help you save on your premium. However, you could pay more out of pocket after a crash.

4

Check for other discounts you have.

Depending on the insurer, you may find deals offering significant saving opportunities. Typical discounts include lowered rates for bundling more than one insurance type, safe driving and being a good student. Some companies may also offer discounts based on your level of education, age and payment terms. Compare insurers and check for auto insurance discount deals that fit your needs.

5

Shop for a new policy.

Finding a new policy can help you get better rates. You may still end up paying more than when you had a clean driving record, but another insurer may offer cheaper rates than your current provider. Your insurer might also match the new policy you find.

About the Author


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Mark Fitzpatrick is a senior content manager with MoneyGeek specializing in insurance. Mark has years of experience analyzing the insurance market and creating original research and content. He graduated from Boston College with a Bachelor of Arts and Johns Hopkins University with a Master of Arts.