You are allowed to switch car insurance providers at any time and not only when renewals are due. Among many reasons to switch insurance providers, cost-saving is probably the most attractive benefit. After making an annual payment, you can receive a prorated refund from your current insurance provider if you change to another insurance company midyear. Note that some insurance companies will charge a cancellation fee for this.
If you have been in an accident, switching car insurance companies might not seem so straightforward. This is especially true if you caused the accident. Do you want to know if you can switch providers in this case or if you should stay with your current car insurance company? We made this post to answer all your questions, so keep reading.
You Can Switch Car Insurance Companies At Any Time
Whether you’ve been in an accident or not, you can switch car insurance agencies whenever you want. The crash will be handled by your former insurance provider, and you are expected to provide full cooperation. The new vehicle insurance company you change to will cover your car from there on out.
Generally, you can change car insurance providers whenever it suits you without suffering penalties. The irregularity to this rule is when you make monthly premium payments. In such a case, you will be responsible for any lingering payments. Your old insurance provider may refund some of your payments under certain conditions.
Is It A Good Time To Switch To A New Car Insurance Company?
If you have caused an accident, you are allowed to change insurance companies without any legal backlash. However, this move might not be a clever idea immediately after the crash.
You don’t want to switch insurance providers if you are liable for considerable premium rate increment.
Your new insurance provider may have no room for accident forgiveness, and you may end up with up to an 80% increase in your new premium rates. In the off chance that you can discover a new car insurance provider that knows about the accident you caused and still offers lower prices, it makes a lot of sense to change providers at this time. Keep in mind that you may have to pay cancelation fees and penalties. In some cases the cost may be a flat rate of up to $50, sometimes it could be up to 10% of your remaining premium, and still, some car insurance providers don’t charge a cancelation fee when you leave abruptly.
It May Not Be In Your Best Interest To Switch Insurance Companies After An At-Fault Collision
There is no time when switching car insurance providers are forbidden. However, you’re not likely to save money if you make this move after you caused a collision. If you were convicted for a traffic violation after your last renewal, you might also lose some money during the switch. Just like getting a ticket, getting in an accident will increase your insurance premium rates. But your premium rates will only be recalculated when a renewal is due.
If you were at fault in an accident today and your car insurance policy will not be renewed for another five months, that’s over a hundred days of paying the same rate as before the accident. On the other hand, moving to a new car insurance provider right after an accident will mean new rates will be calculated, and the effect of your accident will reflect straight away.
Avoid Committing Insurance Fraud
It isn’t uncommon for drivers to get tricky with insurance policies. Some drivers try to change insurance providers immediately after they caused an accident to avoid the accident from reflecting on their records with the state’s Department of Motor Vehicles.
If this is your reason for suddenly switching auto insurance providers, beware that you are intentionally deceiving your new provider and enacting insurance fraud. If you are running to a new insurance provider because they have no knowledge of your collision, it is a wrong move you should stop immediately.
Generally, many car insurance agencies let you end your policy whenever you want, even after you have just been in an accident which you caused. Your former provider will handle the accident while your new provider covers you going forward.
If you decide to switch providers after comparing premium rates between Allstate vs State Farm, you will face no penalties as neither of these auto insurance companies charges a cancelation fee.
Nevertheless, changing auto insurance providers right after causing an accident does not work in your favour. It doesn’t matter which insurance company you move to; you will pay higher premium fees because of the stain on your driving record. Unless you happen on an insurance company that forgives accidents, it is highly unlikely you will save any money by changing providers.