Should You Switch Car Insurance Providers? Here’s What You Need to Know

If you’re contemplating whether to switch car insurance providers, the truth is you can’t know for sure unless you explore what other insurers have to offer. Here are some compelling reasons to consider making the leap to a new car insurance policy and how to find a new insurance provider.

1. You Want to Cut Costs

Inflation in recent years has significantly impacted consumer expenses, and car insurance is no exception. According to January 2024 data from the Bureau of Labor Statistics, car insurance costs have surged by 20.6% since the same time in 2023.

Several factors contribute to the rising cost of car insurance. As car technology evolves and becomes more expensive, vehicles become costlier to insure. Additionally, labor shortages have made mechanics harder to find, leading to higher repair costs for insurers.

While car insurance rates have increased across the board, you may not be able to lower your costs significantly with another company. However, if you feel you’re paying too much, it may be worth doing some comparison shopping to find a policy that offers good coverage at a lower price.

2. You’re Moving

If you’re relocating to another state, you might need to change insurance companies if your current insurer doesn’t operate in your new state. Even if your insurer offers policies nationwide, you’ll need to inform them of your move.

Your policy and premium could change to reflect your new location, potentially resulting in higher or lower prices. For instance, if you move to a city with high rates of car thefts or accidents, your rate could increase. Conversely, if you move to a safer area, your rate may decrease.

Whatever you do, don’t cancel your policy before moving and plan on getting new car insurance afterward. Ensure you maintain your insurance without a lapse to protect yourself and comply with insurance requirements.

3. You Want to Add a Child or Spouse to Your Policy

Life changes often necessitate car insurance policy adjustments. For example, if you recently got married or moved in with your significant other, you’ll likely want to have one insurance policy instead of two. It’s generally more manageable and can be cheaper to be a couple on a single policy rather than having separate policies.

If your teenager is now driving, you’ll want to add them to your policy. Teenage drivers are notoriously expensive to insure, which may prompt you to explore other alternatives if your insurance costs skyrocket.

4. You’re Unhappy With Your Current Insurer’s Customer Service

If you’ve recently encountered issues with a claim or struggled to get answers from your insurer, that’s a valid reason to switch providers. Given that insurance primarily involves paying your premium once a month and rarely interacting with your provider, if your insurer falls short when you need them, it may be time to look elsewhere.

If you’re dissatisfied with your auto insurance company’s customer service, you’re not alone. According to the J.D. Power 2023 U.S. Auto Insurance Study, satisfaction with auto insurance dropped 12 points (on a 1,000-point scale) in the past year—the largest decline in the past 20 years. Much of that dissatisfaction was due to prices rather than other issues.

5. Your Driving Habits Have Changed

If you’re no longer commuting and now working remotely from home, or if your driving habits have changed in some other way, you may feel you deserve to pay less for your car insurance. First, inform your current provider of your changes, and they may reduce your premiums to reflect updated information, such as a reduction in miles driven. If you’re still not satisfied with their offer, you may want to consider switching insurance companies.

How to Switch Insurance Companies

If you’re ready to find a new auto insurer, here’s how to go about it:

Start Getting Insurance Quotes

The first step in your search for new insurance is finding out what other companies offer. Need help finding those quotes? You may want to check out comparison tools that provide quotes within minutes, allowing you to compare prices and policy details, such as coverage types and deductibles, to see if there’s a better offer than what you currently have.

Do Your Research

If you find an insurer that looks better than your current one, get acquainted with the company’s website or talk to an agent. Review the policy’s fine print and ensure the company offers the coverage types you’re looking for at a good price. While you may be eager to leave your old insurer, don’t rush into a new one without thorough research.

Make Your First Payment With Your New Insurance Company

Once you’ve made your decision, sign up with your new insurance provider and make your first payment.

Cancel Your Old Insurance

Ideally, you don’t want to pay for two insurance policies simultaneously, but you also don’t want to cancel your old policy before your new one starts. Ensure your new policy begins on or before the day your old policy ends. If you’ve prepaid for some of your insurance, your insurer may refund the remaining amount, minus any cancellation fees. It’s also wise to request confirmation that your old policy has been canceled and won’t be automatically renewed.

The Bottom Line

Other than paying your premiums every month or worrying about what happens after being pulled over for speeding, you probably don’t think about car insurance much. And that’s okay if you’re happy with your insurance. However, if you’ve been paying high prices or receiving poor service, it’s a good idea to explore what the competition offers. By taking a little time to see what’s out there, you could save money and get better service.

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