Switching car insurance companies in the middle of an active policy can be tricky, and some people will be better off waiting to switch policies at their renewal instead of switching insurance mid-policy, especially after a recent at-fault accident.
But drivers are allowed to switch from one insurance company to another at any time, even if they’ve recently been in an accident or filed a claim.
How to switch car insurance after an accident in 4 simple steps
Switching car insurance after an accident is a relatively simple process. There are four basic steps to take if you want to switch to a new car insurance company mid-policy:
1. Determine how much coverage you need
Every driver needs to have the required state minimum levels of liability coverage, but there are many other types of coverage that people may need, including comprehensive, collision, personal injury protection (PIP), uninsured and underinsured motorist coverage (UM/UIM), and roadside assistance.
Consider your needs carefully and decide exactly what types of car insurance coverage you need to be fully protected before you switch to a new insurance policy. You can always just keep the same exact coverage as in your current policy, but it’s still a good idea to do your research and consider changing things up, especially if the recent accident means you got a new car or you have one less vehicle than before.
2. Consider cancellation fees and refunds
Most people won’t be subject to a cancellation fee, but some states allow insurance companies to charge a fee to terminate your coverage outside of your renewal period. Review your declaration page or contact your insurance company to find out if there are any costs associated with canceling your coverage and verify if you are eligible for a prorated refund.
Drivers who aren’t eligible for a prorated refund or who could be charged a cancellation fee might want to wait until the end of their policy period to switch insurance companies. But if your recent accident means you have an open claim, you don’t need to be too concerned about that — your old car insurance company will still have to pay out the claim from your accident, even if you cancel your coverage.
3. Research and compare car insurance quotes
The best way to make sure you are getting the best car insurance for your needs at the lowest possible rate is to compare quotes from multiple insurance companies, especially because some car insurance companies are cheaper than others for drivers with a recent accident on their records.
Some insurers have higher rates than others, and some insurance companies offer unique types of coverage you can’t get everywhere, like gap coverage or new car replacement coverage, so do your research to make sure you are getting an auto insurance policy that meets your needs.
4. Buy a new policy before canceling your current policy
It is important to have new coverage in place before you cancel your current policy to prevent having a lapse in coverage. Not only does having a lapse in your coverage leave you unprotected during that time, but car insurance companies often charge higher rates for drivers who haven’t been continuously insured. Having a lapse in coverage combined with a recent accident can mean a major increase in your car insurance rates.
Is switching car insurance after accidents good or bad?
Whether or not you should switch car insurance after an accident depends on your situation. Some drivers might benefit from switching to a new policy, but others might be better off staying with their current coverage, especially if it means delaying a car insurance rate increase.
Reasons to switch coverage after an accident | Reasons NOT to switch coverage after an accident |
|---|---|
You were not happy with your claims or customer service experience | You may lose access to some discounts, like customer loyalty discounts, if you cancel your coverage |
Comparing quotes helped you find a new insurance company with lower rates | Your insurance company may charge a cancellation fee for terminating your coverage mid-policy |
Your rates are going up at renewal | Your insurance company may not offer a prorated refund |
Will my car insurance rates go up right after an accident?
No, your car insurance company will wait until your policy is up for renewal before raising your rates after an at-fault accident. This means you may be able to save some money by sticking with your current policy and then shopping around once you get closer to renewal. That way you can put off paying the post-accident rates for at least a few months.
Lowering car insurance costs after an accident
Having an accident on your driving record can make your insurance costs go up, but there are some steps you can take to reduce your car insurance costs after an accident, including:
1. Take a defensive driving course
If you haven’t already done so, taking a defensive driving course can often save you anywhere from 5% to 20% on your car insurance rates. But not every car insurance company offers a discount for defensive driving courses, and the kind of discount you get can vary from one state to the next, so check with your insurance company to find out if you can take a defensive driving course to save money on your premiums.
2. Increase your deductible
If you have full-coverage car insurance, raising your deductible can be an easy way to lower your rates. But raising your deductible means paying more out-of-pocket after an accident, so make sure you have enough in savings to cover the added cost before increasing your deductible.
3. Check for other available discounts
Many insurance companies offer a wide variety of discounts, some of which you may not have realized were available when you first bought your policy. If you need to lower your insurance rates after an accident, call your insurance company to find out what discounts you might qualify for that aren’t already applied to your policy.
4. Shop for a new policy
Switching to a new policy through a different auto insurance company can potentially save you hundreds of dollars (or more) each year, especially if you find a car insurance company that offers cheap rates even with an accident on your record, so reach out to your agent or work with an online marketplace like Policygenius to compare quotes from multiple car insurance companies at once.
Frequently asked questions
Can I switch auto insurance with an open claim?
Yes, you can switch auto insurance policies with an open claim. Switching to a new policy should not impact your claim status, but check with your insurer to see if you’ll be charged a cancellation fee.
Can I switch car insurance companies at any time?
Yes, you can switch insurance policies at any time, but you may be asked to pay a cancellation fee in some instances. Also, make sure you don’t have a gap in coverage between canceling your previous policy and buying your new one.
Can I cancel my insurance policy after filing a claim?
Yes, you can cancel your insurance policy after filing a claim without impacting how your claim is processed. However, be careful not to backdate your cancellation to before the accident or you may end up with a denied claim.
Is there a fee for switching car insurance companies?
No, but some companies charge cancellation fees in certain states. Check your policy details to determine whether or not you’ll be charged a fee before canceling your policy.
