Items you will need
- Driving history
- Distance to work
- Miles driven annually
- Present coverage
- Quotes from new companies
- State insurance department website
- Report on the company's financial strength like Moody rating
The two primary reasons for changing auto insurance companies are increasing rates and poor service. If your premium starts to skyrocket, consider changing companies. Occasionally you must change insurance companies because you've been dropped by the company or they're no longer doing business in your location.
Save the communication from your present company if they dropped you. This is particularly important because they no longer write insurance in your area. The letter is proof that your driving record isn't bad and their refusal to renew is for the entire area. It will list claims and accidents. Make a copy and include it with any insurance application.
Pull all your records from the past 5 years -- claims, accidents and tickets. Include your driving history, distance to work, approximate annual mileage and present coverage.
Compare the rates with the same coverage. If you want to modify your coverage, do it later. Check with your state insurance department to find out if any complaints have been filed against them.
Find all discounts. If you have a different homeowner insurance company, ask if they give policy discounts for having two types of policies. Some companies offer discounts to teens for good grades and a completed driver's education course. Inquire if there's a good-driver discount or a multi-car discount.
Give your insurance company a chance to match any rates if you lower your coverage. Some changes make all policies more inexpensive, like increasing the deductible or lowering the liability coverage. See if you're missing any discounts that might have started after you took out the policy.
Fill out the application at least a month in advance of your policy premium due date and ask for the policy to begin on that date. You'll want the policy in hand before you cancel the old one. Sometimes quotes aren't the price the company ends up charging. People often forget a ticket or accident or think it was longer than 5 years, if it occurred just short of that time. Sometimes representatives accidentally factored the quote improperly. If you pay your insurance premium and then cancel it, you'll be short-rated. This means that you pay a much higher price for the days you had coverage.
Notify your insurance company that you wish to cancel your policy on the anniversary. All companies give a short period of time to avoid lapse. If you don't cancel, they'll charge you for the coverage.