Can I Switch My Car Insurance Mid-term?

Feb 25, 2021 | Personal Insurance

For some reason, you may want to change or switch your car insurance. It may be because of high premiums, or simply because you don’t want to be insured by your provider anymore. You may be moving to another state or you are going overseas. Whatever the reason you have, you can always change your car insurance anytime you want.

Changing car insurance makes you quite the veteran in knowing which is a better deal when getting quotes from different companies. That’s because you have to weigh the pros and cons of switching to a certain company. You also need to compare and communicate with different agents. Only by knowing how they do their services will you be able to choose.

However, you have to remember that there are some things that you need to consider before switching providers. Depending on your circumstances, changing your car insurance may either benefit or disadvantage you. It also takes considerable effort to switch companies mid-term or at the end of the term. 

Reasons for switching car insurance

If you are satisfied with your provider for now, then you may not find the need to switch car insurance. However, you can never tell what happens next. What if you get into an accident, an at-fault one at that, then get higher rates after? That’s when you’ll probably want to look for a new option. 

Others may also have other reasons to change their insurance mid-term. They may want to save money, go to a different state, or anything else. Even you may have your own reasons for wanting to do so. Nonetheless, here are some grounds why drivers want to switch their car insurance.

You want a lower rate

Money is always a relevant issue in insurance. When you are getting insured, you pay money. When making a claim, you pay deductibles. Another one is when you are paying your rates, you will need money. Being subjected to high rates will never make you happy unless you really want to spend a lot.

Here’s the deal. Whenever you are involved in an accident, with a claim worth a lot of money, you can be subjected to higher rates. What makes it worse is when you are at fault for the accident. If you have accident forgiveness in your policy, then your insurer may brush it off. However, what if you don’t have it?

For additional knowledge to your “Oh-I-don’t-want-surcharges” mind, accident forgiveness makes it possible for you to not get an increase in your premiums. It is an additional fee that some companies offer. Let’s say that it’s your first time getting into an at-fault accident. Your insurer will not increase your rates and not let the accident affect your driving record. You have to remember that every company’s terms and conditions vary. In short, not all accidents will be forgiven.

The other company’s got a better offer

People want to get the best that they can afford, just like when shopping for clothes. For example, one saleslady offered you a shirt priced at $20, and another offered you a better one at the same price. Which one would you choose? It’s a fact that you want the best of your interests with the budget that you have, right?

When shopping for insurance, it’s a common thing to compare quotes. Most people will pick the one with a better service if both their prices are the same. For instance, your annual rates typically cost $4,451 in Denver, Colorado. At the same price, it’s good to compare if other companies got better services.

Take note, it’s the services that are important. Paying for low rates and getting a poor service isn’t a worthwhile decision. You have to make sure that you are using your money into an investment that is worth it. If another company’s got a better offer, then go grab the chance!

Your current insurer’s got a poor customer service

Sometimes, people get really bad service, especially when filing claims. The problems are usually related to communication. We have always heard them say “communication is the key”. However, no matter how much effort we give, sometimes they’re not returned. It can really make your mind fume!

Some instances include receiving late and little to no updates about your claim. It’s as if they’re making you wait and you’re clueless about the progress. What’s more hateful is that they may not provide an explanation for why they’re not updating you. Though this may not have happened to you yet, others have probably experienced it already.

Choosing the right company with good customer service is the right thing to do. Even if they may not have the lowest rates, you know that you can count on them in case an accident happened. If your provider doesn’t give you the kind of service that you think you deserve, then switching providers is recommended.

You are moving to a different state

Not all drivers get insured by the top insurance providers in their states. Sometimes, they settle with smaller companies that satisfy their insurance needs at low prices. If you are moving to a different state, you might have to cancel your insurance policy and switch providers. That is if that company doesn’t cover the state that you are going to move into.

Of course, it’s all on you. Even if your current insurer covers auto insurance in that state, you can still choose to switch companies. Who knows if you can get covered at a lower price by a different company. Maybe you can get a better offer for car insurance.

There are many reasons for switching car insurance. Remember that it’s your money that you are burning, so it’s up to you how to use it. You just have to remember that there are some steps to follow to switch car insurance mid-term. You can read some things below about it. 

Switching car insurance mid-term in 8 steps

Jumping from one provider to another isn’t as simple as playing jumping ropes. It’s essential that you know how switching car insurance works. It’s not done by simply saying “I’m gonna switch. Bye!” There’s certainly more than that. Though it can be a lengthy process, it’s not hard as everyone can do it.

There can be many steps depending on your circumstances. Nonetheless, these are some general steps to take in switching car insurance mid-term.

Compare quotes from different companies

Let’s say that you have three options. One company offered to get you fully covered for $3000 a year. The second one offered the same service at $2700. The last one offered the same conditions at $2500. Moneywise, the best choice would be the last one. 

In making the comparison, you should look at the features of their premiums. You may want to know about the types of coverage, the limitations, and the deductibles. Find out if they have offers that make them unique from others. Of course, also find out if their policy features can cater to your needs.

Know the factors that affect the quotes that you can find

There are several known factors that impact your insurance rates. Have you ever wondered why they need your information? Aside from assessing your profile, they use the information that you provide to give you a quote. They ask for your gender, age, civil status, work, location, and many others. Below are the factors that affect your rates.

Gender and age

Expect that you will get a higher quote if you are a young man. That’s because studies show that young male drivers get into accidents more often than female ones. Also, young drivers have less experience compared to older people, so they are more likely to have a mishap on the road.

Civil Status

If you are married and you have family, then you are more likely to consider your family’s safety first. You can get a lower quote, taking into account the fact that you value safety. It will mean that you are less likely to be in an accident and make a claim.

Location

Driving in accident-prone areas will subject you to higher quotes. It means that your chance of being in an accident is high. Living in places, where there are high cases of theft, will result in higher quotes too. Having a safe place to park, like a garage, considerably lowers it.

Vehicle information

Of course, when getting car insurance, the car needs to be taken into account. They will gauge whether the car’s repair costs will be high or low. The availability of the parts is also taken into consideration. Usually, low-cost cars are cheaper to insure.

Driving history

If you haven’t been in an accident for a few years, then it may imply that you are quite the safe driver. That means getting a lower quote. Making no violations of traffic rules like speeding also implies that you are not rash whenever you hit the road.

Look for discounts

Discounts can also affect pricing. The terms and conditions to avail of discounts vary company by company. Nonetheless, asking if you are eligible for them will not hurt. You may even be granted one. Remember to ask the agent about discounts when getting a quote. After all, who wouldn’t want to save money on car insurance? Below are some discounts that you may get.

Safe driver

You can be considered a safe driver if you haven’t been into any at-fault accidents for a few years. Making no major violations also imply the same thing. It means that you won’t probably get into many accidents so you won’t file a claim often. 

Bundling policies

You may get discounts if you get your car insurance from the same company where you got your homeowners insurance. Sticking to the same company may lower your rates.

Anti-theft

Installing anti-theft equipment such as an anti-theft alarm might make you eligible for a discount. Having one will imply that your car is safe from being stolen. Of course, you need to provide proof that you had one installed.

Good student

Students who have B-grades and above may qualify for a discount. Being a good student might imply that you will follow the rules on the road. That makes you safe from at-fault accidents, and free from traffic violations.

Driving courses

Having undergone driving courses means that you’ve learned all the traffic rules and how to drive following certain standards. This means that your potential risk is low. This earns a qualified discount.

Find out about the customers’ feedback

If they have good prices, then do they have good services? When finding good providers, you have to check their prices, their policies, and of course, their ratings. The ratings will serve as a guide for you. If they receive many complaints because of how they deal with their customers, then that is definitely not a good company.

For example, you found one company that offered to cover you with the same policy that you are insured with. They say that they will offer it at 20% less than your current rates. You jumped into their bait, but you didn’t check their ratings and reviews. After a few days, you got into an accident. However, when you filed a claim, their service was so poor. Poor you because you may end up shopping for another policy again.

Talk to your current insurance provider

Some insurers want to convince their customers to stay with them. Especially if you told them that you are planning to switch, they may match the price that the other company is offering. They may also give you discounts in some areas. The thing to remember here is that you should negotiate with your current insurer first.

If you feel like the other company still offered a better deal, then no one’s stopping you. You can switch car insurance anytime you like. Remember to ask about the details needed in order to cancel the old policy. You should remember that stopping to pay your insurance doesn’t mean it is canceled. Though your provider may cancel it due to non-pay, it reflects on your credit.

Cancel your insurance policy properly

Canceling your policy isn’t simply stopping you from paying it. You need to draw the line. You have to make things clear. There are many ways to do it. Remember that you have to do the cancellation properly. Not doing so will result in a blemish in your credit history which is important especially when it comes to money.

Credit history reflects in your credit score. As we all know, these tell the insurers if you can pay your insurance. If you have a bad score, then expect high premiums, which all drivers hate. Hence, the need for proper cancelation. 

Ask for the cancellation fees and possible refunds

Most companies allow their insured customers to switch car insurance after the policy ends for free. However, you may be subjected to some fees if you cancel mid-term. It is good to know about the costs on the spot so you may prepare in any case. 

Additionally, ask if you can get a refund. That’s your money so you should take it back. For example, you switched car insurance after 3 months into it. If you paid for a semi-annual rate, then your provider should refund the remaining 3 months.

The ideal way to get a refund is to be entitled to it from the start. Your insurer will hopefully, with crossed fingers, reimburse you without a word. However, not all times people can get the refund that they want. 

Have your new insurer cancel it

Some insurance providers offer to do the cancellation if you switch. They will do all the necessary paperwork, and you won’t have to worry about anything. Of course, they will need your previous policy’s information such as the effective dates, the policy number, and an authorization letter.

It is better to do it this way. Buying new car insurance before canceling the old one is the right thing to do. This prevents you from being financially vulnerable during the gap where the old one expired then you’re just getting a new one. Even if it’s only a day or two, you can never tell what would happen if ever misfortune said “Hi” to you.

Avoid a gap in coverage

Having a gap in your coverage means that there’s a time where you are uninsured. As mentioned above, almost all states require a minimum amount of coverage. That’s why having a gap can lead to legal consequences as well as financial problems. Make sure that you don’t have one in your insurance.

One such legal consequence is the suspension of your license and being fined. It would only get worse if you get in an accident uninsured. The other party may sue you. You can even face jail time. Worse, you will pay a lot of money, that is, of course, out of your pockets.

Another consequence is higher premiums. Since you want to switch car insurance due to high premiums, it won’t get away from you instead. If insurers find a gap or what they call a “lapse” in your coverage, they will consider you a high risk. Thus, they will charge you high rates.

Swap your old IDs for new ones

You can encounter a checkpoint when driving. Sometimes, a policeman can stop your car and inspect it. When that time comes, you will have to provide proof that you are an insured driver. Since you switched providers, presenting the old ID is a no-no. They will of course verify if you truly are insured with that company.

Bringing the new ID lessens the hassle. Actually, almost all states use a digital ID. It’s becoming mainstream by now, allowing one to present their proof conveniently. However, it’s better to print and to have a tangible version. What if your phone’s battery is drained? What will you do then? Being ready makes it easy.

What should you do after switching car insurance?

In case you are leasing a car or have ongoing auto loans, informing your creditor about the switch is the right move. They’re unsure if you will be able to pay for the car in case it got wrecked due to an accident. That’s why they want to make sure it is insured. Usually, the reimbursements that you can receive goes to them, with any remaining balance given to you.

What would happen if you don’t tell them? They may presume that you are driving around uninsured. Your car may get repossessed. Also, they may even impose forced-place insurance upon you. You won’t like that since that will probably be a pain in your pocket.

What are some reasons to not switch?

Though switching companies may save you money, maybe you can find a silver lining in your current provider. You should ponder the question: why should I stay? If there are many reasons to switch, then there must be reasons to not do so. Again, it’s all up to you.

Disregarding the costs, there might be some advantages that you may not find in others that are present with your current one. This way, you are weighing whether you will lose more if you switch or you will gain more if you stay.

Loyalty discounts

Many companies entice their customers to stay with them by giving a salivating temptation. They might say, “The longer you stick with our services, the lesser your rates will be.” Well, that can happen. This is one such ideal situation. Let’s say that you didn’t get into an accident. Your rates did not spike. Staying would really be ideal.

Of course, what you will invest here is time, which you have plenty of. However, can your budget keep up? Let’s say that you can receive a loyalty discount in three months. You had an accident before that time. If the increase isn’t much after they reevaluate your risk and you can bear with it, then staying will be good for the discount.

Accident forgiveness

As mentioned above, accident forgiveness is a precious offer that can save you a lot of money. Long-term customers benefit from this the most. Most companies grant accident forgiveness as a reward to their loyal customers.

Some insurance providers allow people to purchase accident forgiveness. However, you should take note of the word “purchase”. That means you will pay an additional fee. Also, not all companies do it this way. If you think that sticking with your insurance provider to get accident forgiveness is better, then you may do so. 

When should you switch your car insurance?

Even though you can do it anytime, knowing when you should switch again is a good idea. It may depend on the change that times bring about. Another reason is that if you move states frequently. Whatever the reason, you might still wonder about how often you should switch your car insurance.

It is recommended to check and compare quotes every year. As time goes by, the rates also change. They may go up or down. What’s important is that you can keep track of the changes. If you feel a need to switch after comparing quotes, then you should probably do so. It may be because your rates got higher or you found a better offer.

You can even switch companies while having an open claim. They will still resolve it for you without penalty. However, you should remember that not all companies allow switching companies midterm for free. You should still consider the fees that you will be paying for cancellation. Think about the money that you may not possibly refund.

Following the thought of paying for cancellation fees every time, it may not be worth it. For example, if you are planning to switch car insurance frequently, say yearly, then you’ll pay the fees yearly too. Let’s say that the fees amount to $250 every time. That means you pay an additional $250 every year. 

Can I switch providers after an accident?

The answer is yes. However, it is futile. Once you switch companies after an accident in a short time it will only result in higher rates. Let’s make it clear that your insurance rate will not increase until you renew. It means that you will still pay the same amount during the term.

Switching mid-term will only make you lose more. As mentioned above, insurers assess you before giving you a quote by examining your information. That includes your driving history. Now, if you had a recent accident, then they may consider you a high-risk driver because of your record. With high risk, your rates will be high as well.

Final Say

Switching car insurance isn’t a bad thing. However, it’s not always good either. Depending on one’s circumstances, switching can be both an advantage and a disadvantage. Moneywise, it may save you money. In terms of service, well, it depends. Regardless, the switch will always be up to you. 

At Advantage Insurance Solutions, we can find you the best quotes that suit your needs. Our team is made of friendly people that you can ask your queries. In case you want to switch, contact us, so we can help you!