Should I Wait Until My Auto Insurance Policy Expires to Switch Policies? What if I'd Like to Switch Companies?

Whether you've changed employers and now have access to less expensive auto insurance coverage, or you're simply unhappy with your current auto insurance provider, switching policies — or carriers — is simpler than you might think.

If you're switching auto insurance companies, many states require that you secure a new insurance carrier before you leave your old one. (Having a gap in coverage can leave you exposed to unnecessary risks. Not to mention, in most states, it's illegal to drive without auto insurance coverage.) Your old carrier may ask for proof of new coverage to make sure you're covered within the law. And your new carrier should be able to time the hand-off so that you're covered without paying for two policies.

To cancel your coverage, contact your insurance agent or company and request details on the proper procedure for canceling a policy. It's important to formally let your insurance company know you're canceling your coverage. If you simply stop paying your premiums, your company may assume you're in default. (While this will terminate your policy, it can also adversely affect your credit rating.).

The best time to switch policies is any time that's right for you. You can cancel your policy at any time with proper notice. In this case, your insurance company will generally prorate and refund your unused premium. (Although, canceling before your renewal date may mean you'll incur additional administration fees. Talk to your agent if you have questions.)

Once the above details are taken care of, your new agent will most likely be able to execute the actual switch in a day or two.