When it comes to car insurance, many drivers assume they’re locked into a policy until it expires. But that’s not exactly true. In fact, switching your auto insurance mid-policy is not only possible – it might actually save you money.
Whether you’ve found a better rate, improved your driving record, or want better customer service, you don’t have to wait until renewal time to make a change. Here’s what you need to know if you’re considering switching.
YES, YOU CAN SWITCH MID-POLICY
Car insurance policies aren’t like leases or gym memberships. You’re not stuck until the end of your contract. By law, insurance companies must allow policyholders to cancel coverage anytime, for any reason.
Most even make it relatively easy – you must notify your insurer and complete a short cancellation form. However, before you call to cancel, take a moment to understand the timing, potential fees, and steps to ensure a seamless transition.
4 REASONS PEOPLE SWITCH CAR INSURANCE EARLY
There are plenty of reasons drivers choose to switch policies before their renewal date:
1. Lower rates elsewhere: The most common reason is cost. If you’ve shopped around and found a significantly lower premium for the same (or better) coverage, a switch may be worth considering.
2. Poor customer service: Maybe you’ve had a bad claims experience or feel your current provider isn’t responsive.
3. Life changes: Got married? Moved? Bought a new car? These life events can change your risk profile – and your premiums.
4. More coverage options: You may want to consider switching to a company that offers more flexibility, additional perks, or bundling discounts with home or renters insurance.
WILL YOU PAY A PENALTY?
In most cases, canceling early won’t cost you much, if anything at all. Some insurers charge a short-rate cancellation fee, usually a small percentage of your remaining premium. Others prorate your refund based on the remaining time on your policy.
Let’s say you paid $1,200 upfront for a 12-month policy, and you decide to switch after four months. If your insurer uses prorated refunds, you’d likely get around $800 back. If there’s a short-rate penalty, you might get a little less, say, $780.
Before making a move, call your insurer and ask whether they charge a cancellation fee and how refunds are calculated. That way, there are no surprises.
HOW TO SWITCH WITHOUT A GAP IN COVERAGE
One of the most important things to consider when switching car insurance mid-policy is ensuring there’s no lapse in coverage. Even one day without insurance could lead to:
- Fines or license suspension
- Difficulty getting new insurance in the future
- Higher premiums due to a lapse
To avoid this, follow these steps:
1. Get your new policy in place first. Make sure your new coverage starts before your old policy ends – even if it’s just one day earlier.
2. Schedule the cancellation. Contact your current insurer to schedule a cancellation date that aligns with the start date of your new policy.
3. Get confirmation in writing. Ask for a cancellation confirmation letter or email for your records.
4. Notify your lender or leasing company. If you have a car loan or lease, they’ll need to know about your updated coverage.
WILL YOU REALLY SAVE MONEY?
Here’s the big question: Will switching mid-policy save you money? In many cases, yes. But it’s not always as simple as comparing two quotes.
To truly assess savings, look at the total cost of each policy, including:
- Monthly premiums or total annual cost
- Deductibles
- Coverage limits
- Additional benefits (roadside assistance, rental reimbursement, etc.)
- Cancellation fees or refunds from your current insurer
Also, consider the long-term savings. For example, switching to a new provider who offers accident forgiveness or a safe driver discount could lead to bigger savings over time, even if the upfront difference is small.
A NOTE ON TIMING
There are a few moments when switching mid-policy might make more sense:
- Your rate can change dramatically after a major life event, such as marriage, moving, buying a new car, or adding a teen driver.
- When your credit score improves, insurers use credit-based insurance scores in many states. A better score might get you a better rate.
- When your driving record improves: If an accident or violation recently dropped off your record, it’s worth re-shopping.
You don’t have to wait for your car insurance to expire to get a better deal. Switching mid-policy is allowed – and often a smart move. Make sure you do your homework, avoid coverage gaps, and understand potential fees.
If you need help finding the best car insurance coverage for the best price, speak to a SimplyIOA agent at 833.872.4467 or get an auto insurance quote online now.
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