What You Must Know Before Changing Car Insurance Companies

For the typical person, at some point during their driving life-time, they will want to change auto insurance coverage from one provider to another. Switching insurers is a relatively simple process, but it must be done exactly right, because the consequences, while not life threatening, are probably far greater than you can imagine.

One fact should be perfectly clear, in most states, driving without car insurance is illegal. The repercussions for it may include suspension of your driver’s license or car registration, daily (and usually escalating) penalties assessed by your state’s motor vehicle administrator, and, in the event you’re pulled over by a police officer (for any reason), driving without insurance can result in a misdemeanor charge against you. And last, but not least, an insurance lapse could be reported to the major credit reporting bureaus, which may make it near impossible for you to get a good insurance rate ever again, since you’ll be considered high risk. Even a single day’s lapse of insurance continuity is considered, for all intents and purposes, uninsured, even if you did no driving at all that day.

Now that you’ve been sufficiently warned (or scared to death), let’s take a look at the two simple steps that will enable you to switch your insurance coverage from one provider to another.

1) Call your existing car insurance company, and advise them of your intent to cancel; give them a specific date that you will be canceling the policy, which will be effective as of midnight (generally) on the date you choose. They may need something in writing from you, or will provide you with a form for your signature. Some insurance providers will require that you provide them with proof of new coverage, so don’t be surprised if they ask for this.

2) Obtain coverage from your new insurance provider; this insurance should be synchronized to start when the existing insurance policy terminates. This is also a good time to review your existing insurance needs; you may find that the old insurance was inadequate or that you need to change your deductible or buy higher protection. Insurance can be arranged for immediate coverage, in some instances, either online or over-the-phone with credit card payment of the premium. Be sure that you either have the new policy sent to your email address, or faxed to you or at a minimum, write down your new policy number until the original comes in the mail.

This might be regarded as overkill, but you also could consider starting your coverage on the day before your existing coverage ends, so that you will have a full day of “stacked” insurance. Not every state allows stacking, though, so you should bear that in mind. But when it comes to making a change to your auto insurance policy, it’s better to have an insurance overlap than an insurance lapse.