Can you switch car insurance after an accident?

Why you can trust Insure.com

Quality Verified

At Insure.com, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts. We maintain strict editorial independence from insurance companies to maintain our editorial integrity, so our recommendations are unbiased and are based on a comprehensive list of criteria.

If you recently got into an accident and saw a rate hike in your car insurance policy, you can switch insurers, but you may have to pay a higher premium. Insurers often share information regarding claims and accidents, so switching car insurance after an accident won’t necessarily get you a lower rate.

However, if you want to switch for another reason — you can. 

There are plenty of reasons to switch insurance companies after filing a claim. If you didn’t love the customer service you received or claims process, switching might be the best choice for you. 

Read on to learn more about when you should and shouldn’t switch insurance companies after an accident and how switching your car insurance works.

Can you switch car insurance companies at any time?

You can change your car insurance provider whenever you want — switching insurers is never prohibited. While most people switch insurers at the end of their policy term, you can switch in the middle of your policy’s term if you need to.

However, you should avoid making any changes on the same day as an accident. This may be a red flag for insurers and could lead them to look more carefully into your driving record and other risk factors. That could eventually lead them to decline to offer you coverage. Additionally, insurers can see your claims and accident history through a CLUE report, so they will be aware of anything that happened within the last seven years.

Most experts recommend waiting until after the claim process is well underway before switching insurers. 

Can I switch insurers during an open claim?

You can change your car insurance company even with an open claim for an accident, though it’s not ideal because you’ll have to work with two insurers until your claim is finally settled.

If you switch car insurance companies after the accident, you’ll need to continue cooperating with your old insurer to settle outstanding claims while also getting a policy with a new insurer.  

Your previous insurer should work the claim with the same speed and professionalism whether you’re still a customer or not. If you are sued due to the accident, your former insurer would be required to defend you in court and pay any settlements or judgments up to your coverage limits. 

Additionally, you won’t be able to change your insurance company and file a claim with your new insurer for the accident. The insurer that you have at the time of the accident is the one that handles the claim if you were at fault for the accident. 

You also cannot switch your coverage limits or deductible after an accident to help pay for an incident that already happened. The coverage, limits and deductibles at the time of the accident are what will be in place for any claims. Attempting to make policy changes and then falsifying the date of the accident is considered insurance fraud and will usually end in a denied claim, being dropped from your insurer and possibly a visit from law enforcement.

What to consider before changing insurance companies after an accident

Just because you can switch car insurance companies anytime doesn’t mean you should. Here are a few things to consider before making a move:

• Discounts: You may lose a few discounts and perks when moving to a new insurer. A loyalty discount takes a few years to qualify for, as does a vanishing deductible perk. Be sure to calculate how much money you’d lose in the long term before switching.
• Rates stay the same: Legally, your current insurance company cannot raise your rates mid-policy term, so your rate will stay the same until your renewal period. But if you switch to a new insurer, it will consider your recent accident and likely charge you a higher premium. If your current insurer raises your rates at renewal, that is a good time to consider switching carriers.
• Cancellation fees: Some insurers will charge a cancellation fee if you drop your coverage mid-policy. 

QuickTake

What to do after a car accident that's not your fault

What happens if someone else crashes your car

You crashed a what?!

Are you entitled to brand-name car repair parts? Know your rights

Why your insurance company has to pay for your illegal acts

How much will my insurance go up after an accident?

What to do after a car accident

Best and worst vehicles for preventing passenger injuries

"Diminished value" car insurance claims get the wrecking ball

It's not your fault that you're to blame

How to make a car insurance claim for a hit-and-run accident

In over your head: What happens if accident damage exceeds your car insurance?

How to avoid problems with salvaged vehicles

Auto direct repair programs reduce headaches

See more >

When it makes sense to stay with your current insurer

Your current insurance company may still be the cheapest option. Even if your insurer raises your rates at renewal, insurers can’t make mid-policy changes to your premium in most states. This means you still will have some time before you pay higher rates and renewal is the best time to find a new insurance company. 

You may qualify for a loyalty discount with your current insurer if you don’t already have one. Some insurers offer a loyalty discount of 3% to 4% for renewing with them year after year. If you bundle your policy, you could lose out on an even higher discount. 

You may lose out on certain perks. For example, if you have accident forgiveness with your current provider, you may want to take advantage of this perk for the accident instead of changing insurance companies. Vanishing deductible is another perk that insurers offer their long-term policyholders, and eligibility typically takes a few years.

How to switch car insurance companies after an accident

If you’re looking for a way to save money on your car insurance, switching providers may be the answer. Here’s how you can switch car insurance:

• Determine the amount of coverage you need: Research what types of coverage insurance companies provide and how much coverage you need. 
• Compare car insurance companies: When looking for a new car insurance company, make sure you get quotes from at least three insurers. Rates vary depending on the type of coverage and limits you choose, so make sure you are comparing similar coverage levels and deductibles.
• Contact your current car insurance company: If you’re thinking about switching insurance companies, talk with your current insurer first to see if they can match the rate offered by another company. 
• Check for cancellation fees and refunds: Check with your current insurer to see if there are any fees for canceling your insurance policy. Usually, you can cancel for free at any time, but some companies might charge a fee if you cancel your policy midterm. Your insurer may also owe you a premium refund if you have already paid for the full policy term. Refunds are typically prorated to the date of cancellation. 
• Always avoid a coverage gap: Switching your car insurance before your policy expires can lead to a lapse in coverage. This means you will not have insurance for a certain amount of time. If you are in an accident during this time, you will need to pay for damages — including any medical bills — out of pocket. Additionally, some insurance companies will charge you a higher premium if you have a coverage gap on your record.
• Don’t forget to cancel your old policy: Once you have your new insurance coverage, it’s time to cancel your old policy. Remember that if you have any open claims, your old company will still handle those claims. 

How to get the most affordable car insurance after an accident

While your rates will go up after an accident, there are a few ways to save money on your next car insurance policy:

• Consider your current insurer: While you may be ready to leave your current insurer, the truth is that they may still be the cheapest option, at least for a while. Your current insurer cannot up your rate until your renewal period while a new insurer will take your accident into account. Consider staying with your current insurer at least until your renewal period. 
• Shop around: When it’s time to find a new policy, always shop around. Insurers rate risk differently which can result in dramatic differences in premium quotes. Get quotes from at least three insurance companies and make sure you are comparing apples to apples in regard to coverage levels and deductibles.
• Discounts: Discounts and perks can help lower your premium. Make sure you are getting all the discounts that you are qualified to receive. Do a discount review on your policy to make sure all available discounts are being applied to your policy. 
• Up your deductible: If you can afford to raise your deductible your insurer should lower your premium. Insurers like it when you have more skin in the game, doubling your deductible can result in significant savings. Always choose a deductible that you can easily afford in the event you have to make a claim on your policy.

Mark Vallet

Contributing Researcher

 

|

 . .

Mark is a freelance journalist and analyst with over 15 years of experience covering the insurance industry.