How to switch your car insurance

By Allstate

Last updated: February 2024

With so many different options to choose from, you might be wondering when it makes sense to switch your car insurance policy. Here are some reasons you might want to consider a change, advice for shopping around, and some tips to avoid problems when you switch.

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What to consider before you switch

Consider taking these two steps before ramping up your search for a new car insurance provider.

Read the fine print of your existing policy

It’s important to look through your current car insurance policy documents for relevant details. Your insurer may have a cancelation fee if you terminate your policy early. Your existing policy could be set to automatically renew without your knowledge. You might discover that it makes more sense to wait and switch when your policy is up for renewal, but the only way you’ll know for sure is by carefully reading through the terms and conditions of your existing policy.

Check ratings and reviews

Run a quick search to see which companies have positive ratings and reviews from their current and former policyholders. You can also ask your family and friends which insurers they view favorably or unfavorably based on their experience. Compare the stories about these potential choices to your experience with your present insurance provider to see how they compare.

Evaluate your car insurance needs

Think about what has happened with you or your family over the last year and if you have any milestones coming up. You may need to add or adjust coverages, limits or deductibles to fit your needs. Buying a new car, getting married, moving or adding a teenager to your policy can all affect your car coverage needs. It’s recommended you review your insurance policy at least once a year, according to the Insurance Information Institute (III).

Depending on what's changed in your life, you may also be eligible for new car insurance discounts. Make a list of insurers that offer the coverages you want at the limits you need, have discounts you may qualify for, and have a favorable reputation with customers.

Shopping around

Once you have a list of insurers to look at, it’s time to shop around for the best fit for your specific needs.

Compare several quotes

Many car insurance companies make it easy to get a car insurance quote online in just a few minutes. Here are a few things to consider as you get quotes:

  • It’s important to compare like-for-like quotes for proper evaluation. You want to ensure you aren’t comparing the price of one quote for minimum liability coverage to another one that includes comprehensive coverage and collision coverage. You should also try and choose the same limits and deductibles.
  • Make sure you’re getting all the discounts you’re entitled to receive. Having these applied during your quote will give you a better picture of the price you’ll actually pay.

Research dependability

Finding the insurer with the lowest price is great, but you don’t want to switch insurance companies if they’re not dependable. Accidents can happen anywhere, and severe weather can strike at any moment. So, you want to make sure that you can count on your insurer if you ever suffer a covered loss. You can verify the financial stability of potential insurers by researching them on websites like A.M. Best and other financial rating agencies, explains the III.

Consider convenience

Does one insurer give you more flexibility with their payment options? Can you bundle other types of insurance or products and services you want with one provider? Do they have a mobile app that allows you to make quick changes or pull up your electronic ID card? When two insurers have similar prices and are both reliable, convenience can help be a deciding factor.

Making the switch

After you decide on a new insurance provider, it’s important to take all the appropriate actions when you switch.

Avoid gaps in coverage

Align your new policy’s start date with the end of your old policy, or have your new policy start just before your old policy ends. If you cancel your old policy or not renew it before the new one begins, you could end up with a coverage lapse. Gaps in your insurance history can cause future car insurance premiums to be higher, and if you’re involved in an accident, you won’t have any coverage to protect you during this period.

Cancel your old car insurance policy

It’s your responsibility to notify your existing car insurance company that you plan to make a change. If you’re canceling your policy early, you might need to pay an early cancelation fee subject to your policy’s terms and conditions.

Additionally, your policy could be set for automatic renewal, which is important to note if you’re making the switch around renewal time. You don’t want to pay extra for any months of coverage you don’t need, so be proactive and speak with your existing policy provider to cancel your policy or prevent it from renewing.

Swap your insurance ID cards

If you’re involved in an accident or stopped by the police for a traffic violation, you’ll need to provide proof of insurance. So, be sure to print a copy of your new insurance card (if your insurer doesn’t mail it to you directly) and always have it when driving. If your state allows you to present a digital copy of your insurance card, many insurers provide it when you login to their site or mobile app.

Reasons you may consider switching insurers

Shopping around and changing providers requires time and energy, so why switch car insurance companies in the first place?

Your policy has gotten too expensive

Motor vehicle insurance costs were up over 20% in December 2023 compared to December 2022, according to the Consumer Price Index. When your premium increases significantly at renewal time or starts to become unaffordable, it might be time to check other reputable insurers.

Poor customer service

If an insurance agent was unkind when you called with questions or your company made the claims process unnecessarily complicated, it’s understandable to be upset. Subpar customer service is a valid reason to look elsewhere with any type of business.

Not enough available coverage

Car insurance companies offer many of the same coverage options, like liability coverage, comprehensive coverage, and collision coverage. However, they’re not exactly same. Some companies may have better coverage add-ons for your situation or other services you might want, like roadside assistance, pay-per-mile insurance, or rideshare insurance.

Changes in life circumstances

Life events can cause you to look at other insurers, even when you’ve been satisfied with your current insurer. If you get married, you might find it convenient to have the same insurance company as your spouse. Perhaps one of your children just started driving, and another insurer offers lower rates to new drivers. Some insurers don’t provide coverage in every ZIP code, so you might also need to transition to a new company if you move. Whatever the reason, life changes in your household can drive new insurance needs.

Potential downsides/risks of switching

Like any other financial decision, there are potential risks that come with an insurance change. However, you may be able to avoid or mitigate them if you’re careful.

Penalties or fees

If you cancel your policy early, your current insurer might require you to pay a cancelation fee. Generally speaking, cancelation fees are relatively small – you can expect to pay under $100 according to CNBC, but you should always check your specific policy’s terms and conditions.

Gaps in coverage

As discussed above, it’s important to align the start date of your new policy with the end date of your existing policy. If you’re not careful, you could have a gap in coverage that could leave you unprotected for a short period and potentially lead to more expensive car insurance, in the future.

Getting less coverage

If you’re not careful when selecting a new car insurance policy, you could accidentally select lower coverages, limits and deductibles from your new insurer. This could lead to you having less coverage on your new policy than intended and could cost you more down the line.

Forfeiting discounts

To keep customers, some insurers offer perks or discounts to existing policyholders. If you’ve been with your existing policy provider for several years, you could forfeit some of these savings by switching to a new company.

When shouldn’t you change insurance companies?

Generally speaking, it’s not a bad idea to shop around to make sure you’re getting the best deal. However, there are certain times you might want to avoid considering a change with insurance. For example, if you’re in the middle of a claim, you can change insurers, but it might not be in your best interest. Your claim will still be with your previous insurer, and you might find it overwhelming to deal with two insurers at the same time. Also, switching insurance providers with an open claim might mean higher rates at your new company because your driving and insurance histories could reflect the recent incident.

With this knowledge and a little patience, you'll be prepared to change car insurance companies and find the policy that fits you.

FAQs around switching car insurance