How To Switch Car Insurance

You should switch your car insurance to a different company when you can find a cheaper rate for the same amount of coverage without sacrificing in terms of things like customer service. It's actually best to compare quotes and consider switching insurance companies every 6-12 months in order to minimize costs. It's also worth checking prices anytime you have a change in circumstance that will affect your rate, such as insuring a new car or adding a new driver.

When to Consider Switching Car Insurance Companies

When You Add a New Driver

Adding a teenager to your insurance policy costs 140% to 160% extra, on average. On the other hand, adding an experienced driver could increase or decrease your premium, depending on the exact scenario. As a result, it's well worth shopping around before simply accepting a new rate from your current insurer.

When You Reach a Threshold for Age or Experience

Car insurance rates vary dramatically by age, with particularly sharp drops when a driver turns 19 and 21 years old. Similarly, when a driver has been on the road for at least five years, they will usually be able to get a lower rate.

When You Add or Replace a Car

The cheapest insurer for an older car might not be the cheapest for a brand new car or a specialty vehicle, since each insurer calculates rates differently. If you're adding a vehicle, you should also factor in any multi-car discounts that are available from different companies.

When Your Driving Record Changes

If you were recently cited for a moving violation, each insurer will adjust your rates by a different amount, so switching could make sense. Similarly, some insurance companies will look back at only three years of your driving history, while others will evaluate a longer period. As a result, it's a good time to shop around for a better price when violations or claims reach the three-year milestone. Getting a copy of your driving record and your CLUE Report can help you time things right.

When Your Credit Score Improves

Your credit score can be a major factor in car-insurance pricing. If it has improved, let your current insurer know and then see if other companies can beat your insurance company's price.

When Your Insurance Needs Change

Financing a new car or paying off a loan may change the coverage types you need to carry. You may also want to reevaluate your policy limits and deductible.

When Your Marital Status Changes

Married drivers usually pay less for car insurance than single drivers, so make sure to notify your insurance provider about your nuptials. You should also take the opportunity to see if another insurer will offer a lower premium.

When You Become a Homeowner

Your status as a homeowner rather than a renter can affect your premiums. Insurers often charge lower premiums to homeowners, and you can also get a multi-policy discount if you insure your home and car with the same company.

When Your Education Level or Employment Changes

Earning a college degree will lower your rates with some insurers more than others. Some companies also offer a low-mileage discount, which could benefit you if you get a new job with a shorter commute.

To cancel State Farm insurance, the policyholder must call customer service at 1 (800) 782-8332, send a formal notice in writing, or cancel in person at a State Farm office. You cannot cancel a State Farm insurance policy online.

The cancellation can be arranged for a future date or set to take effect immediately. You will need your policy number, name, address, phone number, and plate forfeiture if you sold your car.

How to Cancel State Farm Insurance Policies

• Cancel by phone by calling 800-STATEFARM.

• Cancel in person by taking your policy number, name, address, phone number, and plate forfeiture if you sold your car to your local State Farm agent.

• Cancel by mail by writing a letter that includes your policy number, name, address, phone number, and plate forfeiture (if you sold your car), plus the date and time you want your policy to end. Sign, date, and mail your letter to: Corporate Headquarters of State Farm Insurance / One State Farm Plaza / Bloomington, IL 61710.

• If you would like to switch agents instead of canceling your State Farm policy, you can email [email protected] or call 800-782-8332.

If you've already paid your premium for the policy period in full, State Farm will refund the unused portion. State Farm does not impose a cancellation fee or penalty for early termination.

It's important to remember that you don't need to cancel your policy just because you're going through some life changes. For example, you should have State Farm update your mailing address or vehicle information if you're moving or buying a new car.

If you're canceling your current policy in order to switch to another company, be sure to activate your new policy before canceling the old one. This prevents a lapse in coverage, which would lead to higher premiums in the future.

You can cancel your car insurance at any time by calling the insurance company or by sending a signed cancellation letter if the company requires written notice. If you're calling to cancel insurance, be sure to have the details of your new policy ready if you're switching insurers, or a bill of sale if you sold the insured car. Your soon-to-be old insurer might request this information to verify that you will not be driving without insurance.  

How to Cancel Your Car Insurance

1. Call your insurer to inform them that you're canceling
2. Send a written cancellation notice if your insurer requires it
3. Pay any necessary cancellation fees
4. Ask for confirmation of the cancellation

It's important to point out that you cannot cancel your insurance simply by stopping your payments. If you just stop paying without notifying your insurer, they will usually assume it was a mistake and continue billing your account. Most car insurance companies have a “grace period” of around 10 days after you stop paying, during which they will continue to insure you. They may even send your unpaid bill from this period to a debt collection agency, lowering your credit score in the process.

How to Cancel Car Insurance by Company

You might need to verify your identity when calling to cancel your car insurance. For instance, USAA suggests having your Social Security number ready. Also, be sure to clarify when your policy will actually be canceled, since some insurers require 30 days' notice.

But bear in mind that you should only cancel your car insurance if you are switching insurers or will no longer be driving the insured car. If you plan on driving your car only occasionally, you still need insurance. In this case, it's worth checking if your insurer offers low-mileage discounts.

Refund for Canceling Car Insurance

You should be able to receive a refund for your unused premiums if you are canceling your car insurance mid-policy. However, some insurers will charge a fee for this, often amounting to $50 or 10% of the unused premiums. If you are switching to another insurance company for a lower premium, paying a fee might be worth the long-term cost savings.

How to Cancel Your Car Insurance Without a Lapse in Coverage

It's important to avoid a lapse in coverage when canceling your car insurance. Going without coverage, even for a legitimate reason, signals to future insurers that you are a higher risk. Drivers with a history of lapsed coverage will be charged higher rates in the future as a result, and might even need to file an SR-22 in some states.  

To avoid a lapse in coverage, be sure to buy a new policy that overlaps with the old one by a day or two. You should also notify your lender or lessor of your new policy details if you drive a leased or financed car.

Even if you plan on putting your car in storage, it's best to maintain comprehensive coverage, since cars in storage are still at risk from natural disasters, vandalism, and damage from animals. And you can still save on your premium, since many insurers offer discounted storage plans, especially if you're in the military and are being deployed overseas.

Finally, you should follow your state's directions if you cancel other coverage types. For instance, your state might require you to turn in your license plates or file an affidavit of non-use before canceling the state's required coverage.

The best way to get cheaper car insurance is to compare quotes from multiple companies and then switch to whichever insurer offers the coverage you want at the cheapest rate. Other ways to get cheaper car insurance rates include taking advantage of discounts, improving your driving record and raising your credit score. Switching to a car that is cheaper to insure or even moving to an area where car insurance rates are lower, on average, could produce a lot of savings, too.  

Car insurance premiums are based on drivers' individual risk factors as well as the coverage types and limits they choose. Changing these factors will therefore affect the price of your car insurance policy.

10 Ways to Get Cheaper Car Insurance

1. Compare quotes every 6-12 months.

Every car insurance company calculates premiums slightly differently, so the quote you get from one company can easily be hundreds of dollars more expensive than another company's quote. Getting quotes from multiple insurers every time you need to renew your policy can help you realize if you're overpaying for the same amount of coverage. 

2. Take advantage of discounts.

All major car insurance companies offer a variety of discounts, which can save drivers as much as 35% in some cases. For instance, many insurers offer multi-policy and multi-car discounts, as well as good student and good driver discounts, and more.

3. Increase your deductible.

Raising your deductible will lower your premium, though it's important to choose a deductible amount that you can afford in an emergency. A car insurance deductible is the amount that you have to pay out of pocket before your insurer will cover the rest. Deductibles apply to several types of coverage, including collision and comprehensive insurance.

4. Improve your credit score.

Insurance companies use credit-based insurance scores, where allowed by state law, since studies have shown that these scores effectively indicate a driver's likelihood of filing a claim. Given that insurance scores are based on credit report information, raising your credit score can help reduce your rate over time.

5. Consider usage-based insurance.

Usage-based insurance is a type of car insurance that calculates your premium based on your driving habits. Each company's usage-based program varies, but most consider your total mileage, braking, acceleration, and speed. These programs are ideal for safe drivers, especially those who do not use their cars for long commutes or frequent trips. 

6. Choose a car that is inexpensive to insure.

Cars that are particularly fast, powerful, and/or costly to repair are among the most expensive to insure. Insurers also charge higher premiums for cars that are more likely to be stolen. The next time you go car shopping, compare insurance quotes for different models in advance with this in mind. And if your premiums are prohibitively expensive now, consider trading in your vehicle for a car that is cheap to insure.

7. Take a defensive driving course.

In some states, insurance companies are required to give you a discount for completing a defensive driving course. Even where it isn't mandatory, insurers will sometimes provide a discount to encourage customers to improve their driving technique.

If your insurer does not lower your premium just for taking a course, working on your driving skills will still pay off in the long run and help you keep your record clean. On that note, certain states also allow you to take a course in order to prevent driver's license points from affecting your car insurance rates.

8. Consider your coverage types and amounts.

All the different types of car insurance can make it difficult to determine what exactly is worth paying for. At a minimum, you need to fulfill your state's requirements and also purchase any coverage your lender or lessor requires. But beyond that, you can weigh whether each add-on coverage option is worth the price.

For instance, maybe you should drop uninsured motorist property damage insurance from your policy if you already have collision insurance. Or maybe you don't need rental reimbursement coverage anymore because you could borrow a family member's car if needed.

9. Practice good driving habits.

Moving violations like speeding tickets signal to your insurer that you are a risky driver, as do serious convictions like reckless driving. By driving safely, you can keep yourself safe and your premium low. If you have tickets or at-fault accidents on your driving record already, work on driving carefully from now on, since they will only affect your rate for a few years.

10. Check out local and regional companies.

Large car insurance companies spend billions on advertising every year, but smaller insurers may be able to provide the cheapest premiums in some cases. So, when you're shopping around, make sure to compare quotes from companies of all sizes. You can use WalletHub's cheap car insurance guide as a starting point. Just click on your state to compare the cheapest insurers.

Yes, you can switch car insurance after an accident, or any time you choose. You don't have to wait until your policy is up for renewal to switch car insurance companies, and you can even change insurers if you have an open claim.

What Happens If You Switch Insurers After an Accident?

There's no penalty for switching car insurance companies after an accident, in particular, but you may face cancellation fees from your current insurance company for stopping your policy early. You're also less likely to save money switching car insurance companies right after you have an accident, as your rate will include your latest mishap on the road. In other words, you can't switch insurance companies to avoid being held accountable for the accident.

Also, keep in mind that if you cause an accident, the insurance provider you had at the time of the accident will still be responsible for handling the claim, even if you cancel their coverage and switch companies. You can't switch insurance providers after an accident to have a new company manage the claim.

What to Do Before Switching Car Insurance Companies

Switching car insurance providers on the same day you have an accident might be viewed as suspicious by some insurance companies, so it's best to wait at least until the claims process begins before switching. You might even want to wait until the process is complete, so you don't have to deal with two car insurance companies simultaneously.

In addition, if you decide to switch car insurance providers, be sure to have your new policy in place before canceling your old policy. It's better to have an overlap of policies for at least a day than it is to have a gap of even one day between auto insurance policies. A gap in your insurance history will be viewed poorly by insurance companies, and it's against the law to drive without adequate insurance coverage.

You should have liability-only insurance if the annual cost of full coverage exceeds 10% of your car's value. At that point, the extra coverage might not be worth the added cost of paying for more than liability-only insurance. But this is just a general rule of thumb, and the decision to switch to liability-only insurance depends on state coverage requirements and each driver's financial situation.

When Liability-Only Insurance Is Worth It

The main advantage of liability-only insurance is that you'll save on your premium. Since liability insurance offers minimal protection for the policyholder, it is less expensive than full coverage insurance.

However, if your car is damaged by an accident that you cause or another damage-causing event, then you'll have to pay for the repairs out of pocket. If you have the financial means to pay for repairing or replacing your car, and your state doesn't require you to have any other types of insurance, then you could take the risk of switching to liability-only insurance. 

Liability-Only Insurance & State Coverage Requirements

Liability only insurance pays for other people's property damage and injuries resulting from accidents that you cause. Almost every state requires that drivers carry a certain amount of liability insurance.

Some states also require drivers to carry other types of insurance, including uninsured/underinsured motorist coverage and personal injury protection (PIP). If your state requires you to have multiple types of coverage, then you cannot legally drive with liability-only insurance.

Liability-Only Insurance vs. Full Coverage

If your state allows it, then you'll need to decide whether to purchase liability-only insurance or full coverage. Full coverage insurance generally refers to a policy that includes both collision and comprehensive coverage. Collision insurance covers damage to your vehicle after an accident. Comprehensive coverage, on the other hand, pays to repair or replace your car if it's damaged by something other than an accident, like vandalism or a natural disaster.

If your car is leased or financed, you will likely be required to carry full coverage insurance. Even if your car is paid off, you shouldn't purchase liability-only insurance if your vehicle is still worth a lot or you're not in the financial position to pay to repair or replace it. Liability-only insurance could also be risky if you live a high-traffic area where your vehicle is more likely to be damaged.

You can change insurance companies mid policy. Car insurance companies generally allow you to cancel your policy at any time. However, when you do make the switch, make sure that your new insurance coverage will start on or before the day you cancel your current policy, to avoid any coverage gaps.

You'll need the following information for any covered cars and drivers in order to get a car insurance policy from a new company:

• Driver name and date of birth
• Driver's license number and issuing state
• Policyholder's Social Security Number
• Vehicle Information Number (VIN)
• Current mileage on your car
• Address where the vehicle is registered
• Name of registered owner
• Prior insurance carrier and expiration date
• Vehicle's date of purchase
• What you use the vehicle for (work or leisure)

Additionally, you should have your policy number available when you cancel your old car insurance policy.

Yes. Elephant car insurance automatically renews every 12 months. One month before your renewal date, Elephant sends you updated renewal documents and billing information by email, or mail if you prefer. The documents include a summary declaration page, a new proof-of-insurance card, and a policy packet with finer details of your coverage. Your policy then renews at 12:01 a.m. on the automatic renewal date, and your billing schedule continues as it did before the renewal.

Elephant also sends a reminder soon before the automated payment goes into effect. You can change your payment method before the renewal by visiting your account page.

Your insurance-renewal rate increase should be nominal if you have a clean driving record. But it's still good practice to speak with a company representative about potential upcoming coverage and premium changes before renewal. This will allow you to policy-shop if you're unhappy with the upcoming changes. You can also cancel your Elephant insurance at any time before your automatic renewal date.