Key Takeaways
- You may need to make changes to your coverage after major life events, like getting married or having a newly licensed teenage driver at home.
- Making changes to your car insurance may raise or lower your rates, depending on what changes you make.
- If you choose to switch insurance companies, it is vital to have a new policy in place before terminating your old policy to prevent a gap in coverage.
You can always make changes to your personal car insurance policy, whether that change is a simple address update or something more complex, like adding a new vehicle.
Whether you want to adjust your current car insurance policy due to a significant life event or switch insurers to save money, most companies make it easy to update or cancel your policy – but there are a few things you must know beforehand.
Most auto insurance changes can be made at any time, not just at your renewal period. This includes basic policy updates, major life changes, and even switching car insurance companies.
Making changes to your policy
It is important to keep the details of your car insurance policy current. Whether you’ve paid off a car loan, sold your car, or your college student moved out of your house, you’ll want to make any necessary changes to your car insurance to accurately reflect your situation.
To change an existing policy, such as adjusting coverage limits or adding another driver, call your insurer’s customer service number or speak with your local agent. Some adjustments can even be made online or through the mobile app, like adding a new vehicle or updating your address.
In most instances, policy changes will take effect immediately. You may be required to pay for any resulting increase in your premium up front, especially if you’ve already paid your insurance premiums in full.
Switching car insurance companies
You can also switch car insurance companies at any time. Many insurers will allow you to cancel your existing policy for free, but some may charge a cancellation fee (sometimes called a short-rate cancellation fee) depending on the laws in your state. Check with your current insurance company about any fees before canceling your policy.
If you want to lower your car insurance rates but you would be subject to a cancellation fee, you may be able to make some adjustments to your current policy, such as raising your deductible or lowering your coverage limits, to lower your rates until your renewal date.
There are some things you should carefully consider before switching car insurance companies, including:
- Cancellation fees: There is no penalty for switching car insurance companies but, depending on your insurance company and the laws in your state, you may be charged a cancellation fee.
- Your credit score: Insurance companies don’t report your payment history to the credit bureaus, so changing insurance companies won’t impact your credit score. However, depending on the laws in your state, your credit score can impact your insurance rates. This means drivers who have a significant improvement in their credit may want to shop around for a new policy even if their current policy won’t renew for several months.
- Recent tickets or accidents: You can switch car insurance companies after an accident, but you may want to wait until your policy renewal. If you stay with your current insurer your rates won’t change until your renewal date, but a new insurance company will take that accident into account when determining your rates and will charge you accordingly from your first day of coverage.
Also be sure you have new coverage in place before canceling your old policy. You can’t drive legally in most states without car insurance. Driving uninsured also puts you at financial risk if you’re in an accident. A coverage gap may also cause you to pay higher rates in the future.
You can make changes to your car insurance policy in a few easy steps:
- Determine what changes need to be made: Do you need to add a new car? Remove a former spouse from your policy? Drop your lender from your policy after paying off your loan? If you have gone through a major life event or you need to save money on your car insurance, figure out exactly what changes need to be made to your coverage.
- Contact your insurance company: Whether you go online, use your mobile app, or call your insurance company directly, reach out to them and let them know what changes need to be made.
- Make any necessary payments: If you are adding a new car or driver to your policy, you’ll likely be expected to make the payment for those changes up front.
- Get your updated documentation: Print whatever new documentation you may need, including new ID cards or a new declaration page.
There are several points in your life where it might make sense to switch auto insurance companies, including:
- You’re getting married: Not only can getting married impact your insurance rates, but combining multiple cars onto one policy and bundling your home and auto insurance together can both help you save money on your car insurance.
- You paid off your car: Once your car is paid off you are no longer required by the lender to carry certain types of coverage, which means you can drop those coverages or raise your deductibles.
- You’re moving: Some insurance companies only offer coverage in certain states or in certain areas of a state, and where you live can have a big impact on your rates. Related factors, such as whether you have a garage or must park on the street, can also affect your premiums, all of which could be reason enough to make changes to your coverage or switch to a different insurance company.
- You’ve had a major life change: Did your teenager just get their driver’s license? Did you have a new roommate move into your home? Did you get a new job with a much longer or shorter commute? These are all things that may require you to change or update your car insurance.
- You’re turning 50: Senior drivers enjoy some of the cheapest car insurance rates on average. And some companies offer significantly discounted rates to seniors and retirees, so it may be worth switching insurance companies after you turn 50, even if your birthday falls in the middle of your policy period.
- Your rates are too high: If you can’t afford your current insurance premiums or you are hit with a huge rate increase, like when you add a newly licensed teen driver to your policy, it makes sense to shop around and try to find a better rate, even if you’re not at your renewal yet.
- You’re unhappy with your current insurer: Cost isn’t the only reason why people change or switch car insurance. Customer service and claims handling are two other factors.
There are a few different ways switching your car insurance policy can help you save money, including:
- Raise your deductible: You can often lower your premium by selecting a higher deductible. However, be mindful of your budget if you go this route, as you’ll need to pay more up front when you file a claim.
- Pre-pay for your policy: Paying up front can save you money by eliminating the fees that can come with making insurance payments, and you won’t accidentally find your coverage lapsed due to an unpaid bill.
- Drop unnecessary add-ons: There are some types of coverage, like GAP insurance, that are only necessary for a specific period of time and can be dropped once the need is gone. Re-evaluate your coverage needs and remove add-ons that no longer fit your situation.
- Keep your driving record clean: The fastest way to drive up the cost of your car insurance is to get a ticket, moving violation, or cause an accident. Being mindful while behind the wheel is the best and safest way to keep your insurance costs low.
- Take a defensive driving course: Many insurance companies offer discounted rates for drivers who take a defensive driving course, and some states will allow drivers to drop a ticket or moving violation from their record if they take a defensive driving course.
- Work on your credit: If you improve your credit score, you may be able to access lower car insurance rates by shopping for a new policy.
- Enroll in usage-based discounts: Many car insurers offer discounts for safe driving when you enroll in a telematics tracking app. But depending on the specifics of your insurance policy, the amount you save may or may not be worth the effort.
- Move to another insurer: Switching to another insurer can sometimes get you a better rate for the same coverage. Consider working with a broker to easily compare quotes from several providers.