A quick guide to switching car insurance companies
- When to switch car insurance: The best and easiest time to switch is three to four weeks before renewal, giving you time to find a new policy and to qualify for any early-shopper discount. But you are free to switch companies at any time.
- Buy a new policy before you drop the old one: A gap of even one day can be costly, not just if you have an accident but also if your state penalizes registered cars without continuous coverage.
- You don't need to wait for renewal: Big changes in your life -- change in vehicles, your address, or even getting married -- can mean big savings. You can switch at any time.
- Consider the downsides: Some companies may charge an early cancellation fee. While many companies offer a discount to new customers, you may lose some perks and discounts by leaving a longtime insurer.
- Cancel your old policy. Usually you have to do this in writing. Your old company may ask for a new policy number, so that your state knows you are continuously insured.
- Confirm cancellation and any refund: Make sure your old insurance company confirms; otherwise it pay automatically renew you and then cancel you for nonpayment. You should get a refund of unused premium if you cancel early, minus any fees.
The best time to shop for insurance is about three to four weeks before your old policy is about to renew. Depending on the regulations in your state, a renewal notice will be sent to you approximately a month before your new policy period begins. The notice will describe your coverage, discounts, and your premium amount. Using that information, you can shop online for the same coverages to see your options.
If you have moved, gotten married, bought a house, made major improvements in your credit or changed vehicles, you're likely to see a substantial difference in rates.
Don't just walk away from your old policy without formally canceling it, because most policies are "continuous" - which means your policy will continue to be renewed every six or 12 months, unless you cancel it. If you fail to cancel, your auto insurance company will continue to bill you for insurance and will eventually cancel the policy for failure to pay. It's much easier to cancel in writing when you're ready to switch.
Once a policy is canceled properly, you should expect a final notice confirming the cancellation and a pro-rated refund of your premium from the date of your cancellation through the end of your term.