The best time to switch policies is within one month of receiving your policy renewal from your current insurer. You can typically cancel your policy without any fees or penalties if you act within this time period. Make sure you have a new policy in place before you cancel your old one to avoid a lapse in coverage. This will also prevent having to figure out the amount of any unused premium that is due to you from your old insurance company or having to argue with your agent about exactly when your policy was cancelled and how much they owe you.
Weighing Out and Comparing All Coverage Options
One of the first steps in switching policies would be to compare as many coverage options as possible that best fit your needs. It is recommended that you get several different quotes from several different auto insurers, in doing so you are able to see and weigh out all the different premiums, coverage and potential discounts you are eligible for. The quote forms generally do not take much time to fill out as long as you have basic car and personal information available it should be a smooth sailing process.
Dealing with Accidents or Tickets on Your Record
It is always important to drive safely while keeping your driving record as clean as it can be. Any speeding or violation ticket has the potential to raise car insurance premiums and reducing the number of points added to your record does not always work with just traffic school. You also should check with your state’s Department of Motor Vehicles (DMV) to check what’s on your driving record before making the switch.
Some insurers double their rates for drivers with speeding tickets, picking the cheapest auto insurance company may be the safest option. If you have an accident or violation that is about to clear your record, it might be a good idea to wait and renew your policy during the next renewal window about six months after. Your rates will show immediately if you switch right after an accident.
Canceling Your Old Policy
Once you have purchased your new policy, you must cancel your old one. If you decide to cancel your policy, after acquiring new coverage, outside of the 30-day period, you may have to pay a fee or penalty. However, you may still save money after paying the fee if your new policy affords you significant savings. So, while it is best to wait until you receive your renewal notice, you can cancel your policy at any time.
It is very important that you contact your old insurance company or agent and cancel the policy, otherwise they could assume you wished to continue your coverage and may eventually cancel the policy due to unpaid premiums and report your lack of coverage to your state’s DMV. This in turn could affect your credit and your ability to get a new policy.
Most insurance companies just need a written statement informing them of your desire to cancel your old policy. Some may require that you provide proof of your new policy. Your company will then send you a form to sign and return, which will effectively cancel your policy. If you haven’t received this form within a couple weeks, be sure to contact your agent or the insurance company and inquire as to the status of your cancellation request.
Avoid a Lapse in Coverage
An auto insurance lapse can look somewhat different to everyone, but can happen in the following ways:
- If you own a car and drive with no insurance coverage.
- If you do not pay your car insurance premiums in time.
- If you were dropped or cancelled from your policy.
To avoid the costly mistake, keep your insurance company and update them regularly with information involving vacations, updates on your license if needed or even making decisions to not drive so you can receive the correct help with canceling your policy. You may also want to think about setting monthly calendar reminders to pay your premiums on time.
- Auto Insurance Rates After Speeding Tickets, Nerd Wallet.
- Switching Car Insurance Companies, Value Penguin.
- Switching Carriers, Bank Rate.
- Lapse in Coverage, Bank Rate.