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How to Switch Car Insurance: Everything You Should Know

How to Switch Car Insurance: Everything You Should Know

6 Minute Read

So, you’ve been thinking about switching car insurance for a while, but you aren’t sure what all is involved or how to make the switch. You’re not alone! There’s a wide variety of reasons people switch providers every year—from paying too much to lack of customer service to bundling coverages.

It’s not hard, but there are some things you need to keep in mind—like making sure you don’t have a lapse in coverage. Because the last thing you need is to get into an accident between your old insurance expiring and the new one kicking in. You also want to make sure your new policy has all the coverage you need. Let’s break it all down.

How to Switch Car Insurance

First, let’s be clear: Shopping around for a better deal on your car insurance is a great idea. Plenty of companies are competing for your business, so you should be able to find a better deal. Your goal is to save some serious cash with lower premiums for the same (or even better) coverage. An independent agent will do the heavy lifting here by helping you get a variety of quotes from different companies so you can pick the one that’s right for you.

Do you have the right auto insurance coverage? You could be saving hundreds!

Here are our tips for a smooth auto insurance switch!

1. Gather the necessary information and documents.

You’ll need to have a few things handy when you decide it’s time for a change. This includes:

  • Personal information such as names, birthdates and Social Security numbers for everyone on the policy.
  • Driver’s license numbers for all the drivers who will be covered.
  • Vehicle Information Numbers (VINs) for all cars on the policy.
  • The declarations page from your current insurance policy. This has all the details of your current policy including your premiums, deductibles, coverage maximums, drivers and the date the policy is valid through.

Now that you have everything you need, it’s time to compare policies. Which brings us to our next tip.

2. Make sure your new policy includes everything it’s supposed to.

Every state (except New Hampshire—kind of) requires you to have a certain amount of coverage. So, you absolutely, positively must buy that type of coverage (usually liability and some combination of uninsured motorist and bodily injury or major medical).

But getting the minimum isn’t really good enough. Here are the three most important types of insurance:

  • Liability coverage: Liability insurance covers damage you may cause to another person’s car in an accident. It also covers any injuries you may cause to the other car’s driver and passengers. You’ll want at least $500,000 worth of liability coverage.
     
  • Collision coverage: This covers any damage to your car when you get in a wreck, whether you hit another car or a telephone pole or a moose. This will pay for damage whether or not it’s your fault.
     
  • Comprehensive coverage: This covers damage to your car that is not the result of a collision. Think hail damage, theft or vandalism. If you can name it and it damages your car, comprehensive insurance pays to repair or replace it.

These are the big three that generally make up what’s considered “full coverage." However, some states also require uninsured or underinsured motorist insurance, which covers you in case your car gets hit by someone who doesn’t have insurance (or doesn’t have enough insurance) to cover their liability.

Other add-ons that might be offered include: rental reimbursement, roadside assistance, gap insurance and towing insurance. But all of these add-ons bump up the price of your premiums. So if you have a good emergency fund, you can skip them.

Just make sure you compare your current policy with the new policy to make sure you’re getting what you’re paying for. Again, an independent agent can help here with the details of your old policy and identifying a new policy.

3. Make sure there’s no lapse in coverage.

Simply put, make sure your new policy begins the minute your old policy ends. You don’t want to have your current policy expire on July 27 when the new policy begins on August 1. If you get into an accident on July 29, you’ll be left holding the bag. There are penalties for driving without insurance, so don’t let a clerical error get you into hot water!

4. Don’t forget to cancel your old policy.

So, you found a new policy that’s going to save you money. Great! But just like you don’t want to have a gap in coverage because you canceled your old policy too soon, you want to make sure you actually cancel your old policy. The whole point of switching car insurance is to save money, not to pay extra! So, keep an eye on those dates.

5. Get a refund for any prepaid coverage.

Good news! If you paid for your old policy up front (or switch in the middle of the month), your old company should refund you the prorated premium for the insurance you didn’t use. Let’s say your premium for a six-month period was $600, and you paid for all of it in January. If you switch your car insurance on May 1, your old insurance company owes you $200. Make sure you get it!

6. Be sure and put your new ID card in your car(s).

This goes without saying, but when you get your proof of insurance from your new company, make sure you put it in your car. This is the final step. If you get pulled over and don’t have proof of insurance, you could be fined for driving without insurance—even if you’re covered. Now, you may get that fine reversed. But, to do that, you’ll spend a day in traffic court. Skip the trip to court and make sure you have the current ID card in your glove box. Most companies let you print it out at home anyway, so there’s no excuse!

Ready to Switch Car Insurance?

If you’re ready to shop around, it’s a good idea to talk to an independent insurance agent who can take your info and shop around a bunch of different insurance companies to find the best coverage at the best price. Dave’s insurance Endorsed Local Providers (ELPs) can help you find the right policy. Most people save around $700 a year on coverage.

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