Can I change my car insurance policy at any time? | Car insurance
Whether you want to adjust your current car insurance policy because your coverage needs have changed or you want to switch insurers to save money, most companies make it easy for you. Here’s what you need to know before changing your car insurance policy.
Yes, in most cases you can change your car insurance policy whenever you want – you don’t have to wait for the policy renewal period. To make changes to an existing policy, such as adjusting your current coverage limits or adding a teen driver, simply call your insurer’s customer service number or speak to your local agent. In most cases, any policy changes will take effect immediately, but you will need to prepay any resulting premium increases.
You can also change auto insurance companies at any time. Many insurers will let you cancel your existing policy for free, but some charge a fee. Check with your current insurance company to find out if you would be subject to such changes. If your motivation is to save money, you may be able to do so simply by adjusting your current policy, such as increasing your deductible or lowering your coverage limits.
Even if you are in the middle of an insurance claim, you can change your insurance policy. However, your current claim must remain with your current insurer. Therefore, you will need to continue navigating the claims process with your original auto insurance company. Remember, if you choose to go with another carrier during an open claim, be sure to be up to date with all payments and follow claim filing rules.
When to change car insurance?
As the seasons of life change, your auto insurance needs may also change. That’s why it’s important to review your insurance policy regularly to make sure it still meets your coverage needs. Whether it’s tweaking your current policy or shopping around for another provider, reasons to change your car insurance include:
- you are getting married. If you and your partner both own a car, it may be cheaper for you to insure both vehicles on the same policy instead of maintaining separate policies. You may be able to achieve additional savings by bundling your auto and home insurance.
- Your car is getting old. It may not make financial sense to purchase comprehensive insurance on an older vehicle, especially if the book value of the vehicle is very low.
- You move. Whether your new home is across town or across the country, your address is an important factor in determining your insurance premiums. Related factors, like whether you have a garage or need to park on the street, can also affect your premiums.
- Your teenager has received his driver’s license. It’s no secret that insurance premiums for teenage drivers are higher than for older drivers. But if your teen has started driving, it’s likely to be cheaper to add them to your existing car insurance policy than to insure them separately. Many insurers offer car insurance discounts to teens if they get good grades or leave the car at home while they go to school.
- You are retiring. Older drivers, on average, enjoy some of the cheapest auto insurance rates. And if you no longer commute to work every day, you may also be able to save with a low-mileage insurance policy.
- You want to lower your premium. Changing insurance companies could save you money. Comparing quotes from at least three insurance companies is recommended by the Insurance Information Institute.
- You are not satisfied with your current insurer. Cost isn’t the only reason people switch car insurance. Customer service and claims handling are two other factors we consider in our ratings of the best auto insurance companies in 2022.
When (or if) you decide to switch carriers, you should first review your current policy and see if there are any cancellation fees before the renewal period. This way you can avoid surprise charges. Following a few steps can help streamline the transition between insurance companies.
- Gather relevant documents. This includes details of your current policy, driver’s license and vehicle identification number (VIN) of any cars you wish to insure.
- Compare the prices. You’ll want to automatically compare policies before switching to a new auto insurance company. Although price is an important factor, make sure you know the details of your policy’s coverage (i.e. deductibles, types of coverage, and coverage limits), so you can compare apples with apples. Waiving certain coverages may reduce your insurance costs, but it may also reduce your coverage. In other words, you may have to pay more if you are involved in a collision or if your vehicle is damaged.
- Select and enroll in a new policy. Once you’ve identified the appropriate coverage and are happy with the rate, it’s time to purchase your new policy. Before you cancel your original policy, you must ensure that the new policy is active. Failure to do so could result in an interruption of coverage, which could impact your rate. Also get a copy of your new insurance card. Some companies give you instant access to your card through their mobile app, making it easier to provide proof of insurance.
- Tell your lender. If you have financed or leased your current vehicle, you will need to notify the lender or lessor.
- Cancel your old insurance policy. After verifying that your policy is active, you can cancel your current policy. Depending on when you cancel, you may be entitled to a refund for unused coverage.
Although many insurance companies allow you to cancel at any time, some may apply cancellation fees if you quit halfway through your policy. For this reason, you should speak with your current insurance company to review the terms and conditions of your policy to avoid unexpected charges.
Having a new policy in place before canceling the old one is crucial to avoid a lapse in coverage. Since car insurance is mandatory in almost every state, not having coverage is not taken lightly. An interruption of coverage may lead to consequences, such as a rate increase, license suspension, fines or the repossession of your vehicle. If you have an accident without insurance, you will also be liable for any expenses resulting from any damage or injury for which you are held responsible.
Depending on when you terminate your current policy, it is possible to receive a prorated refund. For example, if you pay your annual premium up front and decide to skip four months, you’ll receive a prorated refund for the coverage you didn’t use.
Changing car insurance companies will not affect your credit score. Because insurance providers do not report your payment history to credit bureaus, policy activity will not show up on your credit history. However, your credit score can affect the price you pay for coverage. Most insurers use your credit-based insurance score, which takes your credit history into account when calculating your rate.
You have the right to change insurance company at any time, even after an accident. But remember that depending on the severity of the incident and your driving record, your insurance premium may increase. When terminating your policy, insurance companies usually review the last 3-5 years of your driving record. As a result, an accident could result in a higher rate with a new insurance company.
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