So you made the smart decision to compare auto insurance quotes, and you’ve found a better rate than what you’re paying with your current insurance provider. It’s time to officially switch insurance companies, and that means cancelling your current policy.
There are a few ways you can part ways with your insurance provider: You can call and request a cancellation, fax or mail in a cancellation request, or even go old-school and stop by a branch of your insurance company to give them the news in-person. Sometimes, your new provider will even help you make the switch. Whatever your approach, you’ll likely need to sign a document to make the cancellation official. You should have your new policy set up before that happens in order to avoid any lapses in coverage.
Be prepared for your current insurance company to try to woo you back, and know that this could work in your favor. They may be willing to offer discounts or lower your rate to keep you as a customer. It’s up to you to decide whether you want to stick with them or continue making the move to a new provider.
Be prepared for your current insurance company to try to woo you back, and know that this could work in your favor.
Also consider that you may be hit with a penalty for cancelling early, which could be anywhere from $25-$500. Many providers won’t charge a penalty at all. Be sure to check your policy to decide if you’re OK with any fees.
Most insurance providers will issue a refund for any unused premium, but check your policy to make sure. It will usually take at least two weeks for the company to process your refund.
Whatever you do, don’t make the mistake of thinking your old policy will automatically cease when you purchase a new one, even if you’ve reached the end of your current policy period. Your old insurance provider may continue billing you or even withdrawing from your account if you have auto-pay set up. Or they could report you for nonpayment, which could influence your credit score — and that will influence your future rates.
Breaking up is never easy, but switching from one auto insurance company to another is a fairly painless process. Just be sure to follow the correct protocol to avoid any awkwardness with your ex-insurer.