Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Sep 27, 2021

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Just the Basics

  • Switching car insurance companies can be a great idea if you’ve recently moved, found a better deal, or want to bundle your policies
  • By comparing the offers of different car insurance companies, you can often save quite a bit and may secure better discounts
  • Be sure to review your options and select a policy that best fit your needs

Is it bad to change car insurance companies? Switching your car insurance provider may actually be a good decision, but don’t switch insurers randomly or on a whim. There are some risks with changing insurance companies, but with proper planning they can be avoided all together.

However, if you are planning a move, buying a new vehicle, or experiencing any other major life events, you could save by switching.

Switching is also optimal if you have found a better deal, a better policy, or simply a better provider for your needs. Understanding what to look for in a good policy is the first step to securing coverage best suited for you.

Companies use unique metrics and guidelines to calculate car insurance premiums, so you never know what possibilities are out there until you look. The best strategy would be to compare your options before going through with switching.

Before you learn more about if it is bad to change car insurance companies, enter your ZIP code above to compare local car insurance quotes for free.

When should I switch car insurance companies?

There are quite a few instances where it may be best to switch car insurance companies. Reflecting on your current situation will help to make the most sense of when to switch.

If you’re currently in the middle of your term, you may wonder, can I change car insurance before the renewal date? The answer is yes, car insurance companies typically allow cancellations mid-term. You may face some associated fees, so be sure to weigh the pros and cons.

Here are the most common reasons drivers switch their car insurance:

Switching Car Insurance Companies When You Moved to a New Area

You likely will not need to change your car insurance if you’ve moved within the same ZIP code. However, if you moved to a new state, your insurer may not provide coverage for that area. You will need to switch car insurance companies as soon as possible.

Switching Car Insurance Companies When You Found a Better Deal

The pricing models and available discounts vary wildly from provider to provider. Switching to a company with better offers could easily help you save hundreds of dollars each year.

For more tips on how to save, consider these five ways to save on car insurance today

Switching Car Insurance Companies When You Want to Bundle Your Policies

Bundling is one strategy that definitely helps to save money. Utilizing the same company for your life insurance, home insurance, car insurance, and other needs often comes with great benefits and discounts.

Switching Car Insurance Companies When You Want Better Customer Support

Unfortunately, not all insurance companies are made equal. Maybe you’re tired of being on hold for hours or never getting a response to your queries. Switching is likely the best choice and will save you a lot of frustration in the long run.

Switching Car Insurance Companies When Your Lifestyle and Needs Have Changed

Your insurance coverage should change as you do. Your driving habits, family structure, and general needs evolve over time. Be sure to consider your personal growth when thinking about switching providers.

Switching Car Insurance Companies When Your Credit Improved

Rejoice! If your state allows insurance companies to use credit-based scores in their pricing model, you could save big. Switching to a new provider after a major growth in credit is a smart idea.

Switching Car Insurance Companies When You Need to Add a New Driver

Adding new drivers can severely affect your rates, so comparison shopping for what other options you have will help you secure the best deal.

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How to Switch Car Insurance Companies

Canceling your car insurance policy is pretty simple, but make sure to have a new policy selected before you cancel. Having a lapse in car insurance coverage is not only dangerous, it can also affect your rates in the future.

According to the Insurance Information Institute, it’s important to get at least three quotes from different insurance companies before switching. That way you have a variety of options and a good idea of what to expect.

It is also a good idea to check out any possible discounts that you might be able to get for switching providers, which you can see in the table below.

Discounts for Switching Providers
ProviderNew Customer / New Plan DiscountSwitching Provider Discount
21st Century
American Family
Country Financial
Liberty Mutual
Safe Auto
State Farm
The General
The Hanover
The Hartford
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Once you have selected your new car insurance provider, contact your previous insurer and ask them about their cancellation policies.

Most companies allow cancellations over the phone, but you may need to sign a cancellation notice as well.

Once you submit your request for cancellation, you will receive confirmation that your coverage through that company has ended. Be sure to retain this confirmation in your records and reap the benefits of your new car insurance coverage.

Now that you more about if it is a bad idea to change car insurance companies, enter your ZIP code below to instantly compare the best deals from car insurance companies near you for free.