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If you were involved in an auto accident, chances are your car insurance rates went up.  And the increase could have been substantial. Auto insurance rates increase about 56%, on average, after one at-fault accident with more than $2,000 in damage. If that’s the case, you may be thinking of shopping around and switching insurance carriers. 

But can you change insurance companies after an accident? The answer is yes.

In fact, you can switch insurers at any time. However, before switching, you need to consider a few things. First, if you discontinue your current insurance, you may be charged a cancellation fee. And, after an accident, you may pay a higher rate no matter which company insures your vehicle. Insurers often share information regarding claims and accidents, so switching car insurance after an accident won’t necessarily get you a lower rate.

Besides seeking a cheaper rate, there are plenty of other reasons to switch insurance companies after filing a claim. Switching might be your best choice if you don’t love your existing company’s customer service or claims process.

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.

Key Takeaways

  • While you can switch insurers after a recent accident, you should evaluate if it will cost more in the long term.
  • Ask your current insurer if they can match the new insurance company’s rate before you switch.
  • Before you switch carriers, make sure you settle all the open claims with your old insurer. Otherwise, you’ll have to work with two insurers until your claim is settled.
  • Choosing to switch car insurance companies can result in losing several discounts, including loyalty or bundling discounts.

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 necessary.

Rate increases are a significant factor in why people switch insurance companies. The table below looks at how rates can increase after an accident.

StateRate before accidentAt-faultAt-fault bodily injuryTwo at-fault accidents
Alaska$1,288 $1,880 $1,880 $2,525
Alabama$1,517 $2,242 $2,250 $3,094
Arkansas$1,483 $2,310 $2,318 $3,174
Arizona$1,661 $2,505 $2,599 $3,451
California$2,206 $3,692 $4,416 $5,664
Colorado$1,977 $2,757 $2,757 $3,678
Connecticut$1,455 $2,191 $2,210 $3,123
Washington, D.C.$1,904 $2,784 $2,810 $3,786
Delaware$1,751 $2,398 $2,442 $3,471
Florida$3,008 $4,384 $4,402 $5,718
Georgia$1,618 $2,576 $2,576 $3,487
Hawaii$1,309 $1,841 $1,841 $2,628
Iowa$1,241 $1,732 $1,737 $2,307
Idaho$1,011 $1,376 $1,419 $1,816
Illinois$1,364 $2,081 $2,086 $2,958
Indiana$1,282 $2,000 $2,007 $2,947
Kansas$1,493 $2,013 $2,049 $2,751
Kentucky$1,865 $2,801 $2,812 $3,954
Louisiana$3,197 $5,164 $5,164 $6,911
Massachusetts$1,760 $2,694 $2,706 $3,747
Maryland$1,966 $3,069 $3,079 $4,001
Maine$1,049 $1,557 $1,563 $2,099
Michigan$4,013 $5,767 $5,767 $10,372
Minnesota$1,686 $2,358 $2,369 $3,400
Missouri$2,372 $3,767 $3,773 $4,949
Mississippi$1,405 $2,081 $2,110 $2,781
Montana$1,766 $2,544 $2,544 $3,324
North Carolina$1,396 $2,194 $2,696 $2,851
North Dakota$1,232 $1,671 $1,701 $2,364
Nebraska$1,847 $2,623 $2,623 $3,501
New Hampshire$952 $1,367 $1,445 $1,995
New Jersey$2,262 $4,041 $4,060 $5,631
New Mexico$1,695 $2,328 $2,328 $3,047
Nevada$2,389 $3,561 $3,660 $4,845
New York$1,867 $2,288 $2,583 $3,330
Ohio$1,114 $1,674 $1,680 $2,307
Oklahoma$1,852 $2,812 $2,812 $3,786
Oregon$1,502 $2,281 $2,298 $3,103
Pennsylvania$1,297 $1,610 $1,874 $2,538
Rhode Island$1,792 $1,880 $2,372 $1,930
South Carolina$1,811 $2,588 $2,603 $3,360
South Dakota$1,558 $2,159 $2,349 $3,227
Tennessee$1,311 $2,033 $2,041 $2,770
Texas$1,981 $3,261 $3,239 $4,582
Utah$1,601 $2,373 $2,373 $3,475
Virginia$1,228 $1,841 $1,852 $2,670
Vermont$1,057 $1,521 $1,521 $1,967
Washington$1,351 $1,906 $1,920 $3,004
Wisconsin$1,573 $2,399 $2,404 $3,447
West Virginia$1,424 $2,090 $2,090 $2,817
Wyoming$1,763 $2,318 $2,318 $3,030

While a claim will almost always result in a higher rate, other factors can also push up insurance costs. In the spring of 2023, CarInsurance.com, which, like Insure.com, is published by QuinStreet, surveyed 2,300 drivers nationwide to determine their attitudes about car insurance, inflation, driving habits and more.

Many survey respondents (43%) blamed inflation for rising rates and half (49%) said they shopped around and bought insurance from another carrier in the past 12 months. Of those who switched, 31% moved to Allstate, 22% to Progressive, 19% to Geico, 17% to State Farm and 12% to USAA.

Our recommendations:

  • Don’t switch if you just started a new policy term. Your current insurer cannot raise your rates until policy renewal, so for the time being, they will often be your cheapest option. When your policy term is up, shop for new coverage. 
  • Do switch if you are near the end of your policy term and find a cheaper rate from another insurer. If you switch insurance companies after an accident, timing should be considered. In most cases, 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 or in the middle of a 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.

Suppose you switch car insurance companies after the accident. In that case, 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 or not you’re still a customer. If you are sued due to the accident, your former insurer must 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 and pays the claim if you were at fault for the accident.

You also cannot switch your coverage limit or deductible after an accident to help pay for an incident that already happened. The coverage, limits and deductible at the time of the accident will be in place for any claims. Attempting to make policy changes and then falsifying the date of the accident is considered insurance fraud. It will usually end in a void policy, 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 or that it will lower what you’ve been paying.

“Motor vehicle records are used by insurers to determine risk and those generally stay on your record for up to three years. So, before you switch insurance companies after a crash or claim of any kind, determine if that will actually save you any money and provide you the same level of coverage,” says Carole Walker, executive director at the Rocky Mountain Insurance Association, a nonprofit organization that represents property and casualty insurers in Colorado, New Mexico, Utah and Wyoming.

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 may charge a cancellation fee if you drop your coverage mid-policy.

When does it make 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 will still have some time before you pay higher rates. 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 switch, 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. A vanishing deductible is another perk that insurers offer long-term policyholders, and eligibility typically takes a few years.

Insight:

After an accident, knowing higher rates might be coming, you might be thinking about quickly switching to a new insurer. But don’t be too hasty. Consider staying with your current insurer at least until your renewal period. Your current insurer cannot up your rate until your renewal period, while a new insurer will consider your accident.

When doesn’t it make sense to stay with your current insurer?

  • If you are near the end of your policy term, there is a good chance your premium will increase as your current insurance company can reprice your policy. And, if you have a claim, there’s a chance the insurance company will raise your rates significantly. That’s an excellent signal to shop around. 
  • If you have lost major discounts and perks such as safe driver, accident forgiveness and a vanishing deductible, it may make sense to switch to another insurer, particularly one that offers a better rate. 
  •  If you were unhappy with the customer service you received during the claims process or were not compensated fairly, you may consider moving to a new insurer.

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. You can learn more about different coverage levels here

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 compare similar coverage levels and deductibles. And check out insurers’ reviews and claims-paying ability. You don’t want to wind up with a financially unstable company or one with poor service should you need them.

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. Be sure to buy a new policy before canceling an existing policy: 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 cheap car insurance after an accident

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

“Ask about accident forgiveness, longevity discounts, bundling coverage or any other discounts that may help you offset higher insurance costs,” Walker says.

Here are a few tips to help keep your insurance affordable:

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 every 6-12 months: When it’s time to find a new policy, always shop around. Insurers rate risk differently, which can result in dramatic differences in premiums. Get quotes from at least three insurance companies and make sure you are comparing apples to apples regarding coverage levels and deductibles.

Take advantage of 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 you can easily afford if you have to make a claim.

Take a defensive driving course: Many insurance companies will offer a discount to drivers who take a defensive driving course after a ticket or accident. Check with your insurance company to verify they offer a discount and get a list of qualifying courses.

Adjust your coverage: One way to lower your premium is to adjust your coverage or coverage levels. If your vehicle is old and you would replace it after an accident instead of repairing it, you may be able to drop collision and comprehensive and just carry liability. You can also consider lowering your liability coverage levels — but insurance experts warn against this. Remember, once your coverage levels are exceeded after an accident, you are on the hook for any additional expenses.

Think about pay-as-you-drive or usage-based insurance (UBI): These types of policies are based on when you drive, how much you drive and how well you drive. Insurers measure your activity with tracking devices to gather driver-behavior metrics. Low mileage discounts and UBI are easy ways to get a lower rate.

What are the risks of changing insurance companies?

There could be a downside to switching carriers. If you change insurance companies, you’ll lose any loyalty discounts. If you bundle auto and home with your current insurer, you may not see the same discount with your new insurer. You could also lose accident forgiveness. 

expert

What our expert says

Q: What should drivers who’ve been in an accident think about before switching?

expert-image
Carole WalkerExecutive director of the Rocky Mountain Insurance Information Association.
“Motor vehicle records are used by insurers to determine risk and those generally stay on your record for up to three years. So, before you switch insurance companies after a crash or claim of any kind, determine if that will actually save you any money and provide you the same level of coverage.”

Frequently asked questions

Can I change my deductible after an accident? 

You can’t change your deductible amount after an accident. This is usually decided at the beginning of a policy, and it will remain unchanged until the policy expires. 

Can you change car insurance during a claim?

You can always switch car insurance companies, even if you have an open claim. However, make sure not to cancel your old policy until the day your new policy starts. Otherwise, there could be a lapse in your insurance coverage. 

Even if you switch insurance companies, your open claim will not transfer. You will have to contact the old insurer until the claim is paid out. 

Is there a fee for switching car insurance companies?

Some insurers do charge a small cancellation fee, so check your policy wording for details on cancellation fees. Most policies allow you to cancel without penalty, but you may have to notify your insurance company in writing.

Can you get a refund from your current insurer if you switch companies?

If you have paid in full for the term of a policy but are switching before your renewal, your insurance company should refund any unused premiums. You may need to pay a cancellation fee, depending on your policy details.

Can I switch to full coverage after an accident? 

Yes, but any new coverage cannot be used retroactively. It will only apply to accidents that happen after the date you added the extra coverage.

author image
Mark Vallet
Contributing Researcher

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