How to Switch Car Insurance Companies

Switching car insurance is simple. Purchase a new policy and cancel your current one, making sure the new policy starts immediately after the old one ends to avoid a lapse. Your insurer might provide a pro-rated refund for the remaining balance, though some may charge a small cancellation fee.

Follow these easy steps to switching car insurance while avoiding any lapse in coverage:

• Step 1: Determine how much coverage you need
• Step 2: Evaluate cancellation fees and refunds
• Step 3: Research and compare quotes
• Step 4: Buy your new policy
• Step 5: Cancel your old policy
• Step 6: Swap in your new ID card

The type of insurance you need depends on your state's requirements and how much coverage you want in case of an accident. Minimum coverage is the least required, while liability insurance covers damage you cause to others. Full coverage includes comprehensive and collision insurance, covering you and others.

The coverage level you need also depends on your car's value, your lender’s or leasing company's requirements, the value of your assets and other factors. The table below shows how car insurance costs vary based on your level of liability insurance, age and whether you add comprehensive and collision coverage with a $1,000 deductible.

Insurers use shorthand terms for liability limits. For example, a 50/100/100 policy provides:

• $50,000 in bodily injury liability per person
• $100,000 in bodily injury liability per accident
• $100,000 in property damage liability per accident

Knowing your liability limits helps you understand how car insurance works and the coverage it provides.

Insurance companies may charge a cancellation fee for ending a policy early, but you could receive a refund for the unused portion. If the savings from switching and the refund outweigh the cancellation fee, it might be worth switching mid-policy.

Here’s a breakdown of the largest car insurers:

• No fee: GEICO and USAA
• Cancellation fees undisclosed: Allstate, Farmers, Nationwide, Progressive, State Farm and Travelers

Nondisclosure doesn’t always mean no fees. Cancellation fees may vary by state. Contact your insurer to learn about fees and refunds.

To save on auto insurance, comparing quotes from multiple providers is key. While USAA offers the lowest premiums for most age groups, it's available only to military members, veterans and their families. For others, Travelers is typically the cheapest option.

These rates are national averages, and actual costs may vary. You can reduce your premiums by exploring discounts.

Before switching, check with your current insurer to see if you can negotiate a better rate or if it covers your new location. Research the cheapest insurance options in your new state and compare rates across different age groups and policies using the table below.

When choosing a car insurance policy, consider factors in addition to cost. If you value customer service in a time of need, MoneyGeek also ranked the best auto insurance companies offering a balance of quality service and affordability.

Before canceling your car insurance, ensure your new policy is active. Pay the quoted premium and confirm that the new policy’s start date matches the old policy’s end date. Planning rather than buying insurance at the last minute can save you money.

A lapse in coverage can cause significant rate hikes. Penalties are more severe if the lapse exceeds 30 days, but even one day without coverage can have consequences.

While waiting for official documents, request a digital confirmation of your new coverage. Cancel your previous policy only when you’ve received confirmation.

To switch car insurance, buy the new policy and confirm it’s active. Then, cancel your old policy immediately to avoid overlap. If you're renting or leasing, inform your lender of the change. 

Switching doesn’t eliminate any past-due premiums or cancellation fees with your previous insurer. You still must pay for those.

Replace your old insurer's ID with the new one. You can update it in your wallet, glove box or by downloading your new insurer's app for a digital copy.

Switching car insurance is quick, but consider these questions first:  

• Do I have a good reason to switch? Look for better rates or improved service, but ensure there's a better option available.
• Have I done my research? Follow the steps to find the best deal and a policy that suits your needs.

If your current insurer offers the best coverage, rates and service, it may be worth staying. However, if you find a better option, there's little to lose. While your insurer may charge a cancellation fee, you're entitled to a pro-rated refund for any premium already paid.

Life changes, like moving to a new state or adding a driver, are great reasons to switch car insurance. You might also want to save money. This guide outlines the steps to help you find the right insurer and prevent a lapse in coverage when switching.

We answer frequently asked questions below to help you better understand the process of switching car insurance companies.

MoneyGeek analyzed car insurance rates using data from Quadrant Information Services and state insurance departments to determine average costs based on policy types. The study includes 902,880 quotes from 64 companies across 700 ZIP codes.

Driver Profile:

• 40-year-old male
• Drives a Toyota Camry LE
• Clean driving record
• 12,000 miles driven annually

We adjusted this profile for age, location and driving history to calculate various rates.

Coverage Levels and Deductibles:

• Liability insurance covers damage to others' property.
• Full coverage includes comprehensive (damage from weather, fire, etc.) and collision (damage from accidents) coverage.

The 100/300/100 term means:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $100,000 property damage liability per accident

A deductible is the amount you pay before the insurer covers the rest of the loss.

Learn more about MoneyGeek's methodology.