How and When Can You Change Car Insurance Coverage or Limits?

Last Updated on January 26, 2026

People often hesitate to make changes to their car insurance because they assume it’s a hassle or that they’re “stuck” until the policy renews. Others worry they’ll lose money or pay penalties if they adjust coverage mid-term or switch auto insurance providers before their current policy ends.

The truth is, you usually have more flexibility than you think. You can often change coverage and limits during your policy term—and in many cases switch companies—without major problems, as long as you do it carefully. Let’s demystify when you can and cannot change coverage or limits on your car insurance policy.

Quick answer: Most insurers let you change limits, deductibles, and optional coverages mid-policy. Changes apply going forward (not retroactively).

Usually easy: raise/lower liability limits, adjust deductibles, add/remove roadside or rental coverage.
Usually not allowed: adding coverage after an accident, dropping below state minimums, or violating lender/lease requirements.
Best practice: if switching insurers, make sure the new policy is active before canceling the old one.

See the no-lapse checklist

Key Takeaways

You can usually change your coverage, limits, deductibles, and even your insurance company mid-term—changes apply going forward, not retroactively.
You cannot backdate coverage to cover an accident that already happened, drop below state minimum liability limits, or ignore lender requirements.
Always make sure your new policy is active before canceling your old one to avoid coverage gaps, penalties, and future rate hikes.
Calling your insurer to review options and shopping around periodically can help you align your coverage with your needs and potentially save significant money.

Table Of Contents

Quick Rules: What You Can Change (and When It Takes Effect)
When You Cannot Change Your Auto Insurance Coverage
You Can Make Mid-Term Changes More Often Than You Think
Do Not Terminate Your Policy Until New Insurance Is Active
No-Lapse Checklist: Change Coverage or Switch Companies Safely
Consider the Cancellation Fees
Common Mid-Policy Change Scenarios (and What to Do)
It’s Worth Calling Your Insurer to See If You Can Reduce Your Rate
FAQs on When You Can Change Coverage

Quick Rules: What You Can Change (and When It Takes Effect)

Change you want to make	Usually allowed mid-term?	Common restrictions	When it affects coverage/premium
Raise liability limits	Yes	May require updated proof of insurance; lender rules if financed	Effective date forward
Lower liability limits	Usually	Can’t go below your state minimum limits	Effective date forward
Change deductibles	Usually	Lenders/leases often cap deductibles (commonly $500–$1,000)	Effective date forward
Add comprehensive/collision	Usually	Not retroactive; insurer may require photos/inspection	Effective date forward
Remove comprehensive/collision	Sometimes	If financed/leased, lender typically won’t allow removal	Effective date forward
Switch insurance companies	Yes	Don’t cancel old policy until new policy is active	New premium starts on new policy effective date

Note: Exact rules vary by insurer/state. Your declarations page and lender agreement are the final say.

When You Cannot Change Your Auto Insurance Coverage

While you can change your policy in many ways, there are some important limits:

No backdating coverage: You cannot add new physical damage coverage (like comprehensive or collision) after an accident and expect it to cover that loss. If you didn’t have that coverage in place when the accident happened, it won’t apply retroactively. Trying to add coverage after the fact is considered misrepresentation and can lead to denied claims or even policy cancellation. See more about this in our guide on backdated car insurance after an accident.
No deductibles below or above what’s allowed by your lender: If your vehicle is financed or leased, your lender usually requires certain coverage types and maximum deductibles. You cannot raise your deductibles beyond what your finance or lease agreement allows, even if you want to lower your monthly premium.
No dropping below state minimums: You cannot reduce your liability coverage below the minimum limits mandated by your state. Those minimums are required by law to legally drive.

Beyond these restrictions (and any lender requirements), most changes you make will only affect future claims—not past ones.

You Can Make Mid-Term Changes More Often Than You Think

Just because your auto insurance policy is in the middle of a 6-month or 12-month term doesn’t mean you are locked into your current premium, coverages, and deductibles. In most cases, you can:

Increase or decrease certain coverage limits mid-term
Add or remove optional coverages (like roadside assistance, rental reimbursement, etc.)
Raise or lower deductibles (as long as you still meet lender and state requirements)
Switch auto insurance companies mid-policy

These changes are usually done through an endorsement to your existing policy. Your price will be adjusted based on the date the change takes effect. In other words, you don’t have to wait for your renewal date to fine-tune your coverages or limits.

Do Not Terminate Your Policy Until New Insurance Is Active

If you obtain a quote for new auto insurance and decide it’s a better fit, don’t rush to cancel your current policy immediately. Instead:

Confirm that the quote is accurate and that the coverage meets your needs and lender/state requirements.
Finish the application and confirm the exact policy start date with the new insurer.
Only then, arrange to cancel your other coverage, effective the same day your new policy begins.

The last thing you want is a lapse in auto insurance coverage. Even a short gap can cause your rates to spike later, and in many states it can also lead to fines or license issues. Insurers are often required to report cancellations to your state’s motor vehicle department, so it’s important to keep continuous coverage.

When in doubt, call your agent or customer service representative and have both policies’ effective dates in front of you so there’s no confusion.

No-Lapse Checklist: Change Coverage or Switch Companies Safely

Use this checklist any time you’re changing limits, adding/removing comp & collision, or switching insurers.

Pull your declarations page (limits, deductibles, drivers, vehicles, term dates).
Confirm state + lender requirements (state minimum limits and any loan/lease coverage rules).
Request the change and ask for the effective date/time in writing (endorsement or updated declarations page).
If switching insurers: bind the new policy first and verify the policy number and start date.
Cancel the old policy effective the same day the new policy begins (not earlier).
Save proof: updated ID cards, endorsement/declarations page, and written cancellation confirmation.

What to have in front of you

Policy number + current term dates
VIN(s) + estimated annual mileage
Lienholder/lessor info (if financed/leased)
Your target limits/deductibles (and budget range)

Simple phone script

Hi — I’d like to make a mid-term change to my auto policy.

1) Please confirm my current limits, deductibles, and optional coverages.
2) I want to change: [limits/deductibles/coverages] to: [new amounts].
3) What is the earliest effective date/time for this change, and will you issue an endorsement or updated declarations page?
4) Are there any lender/state restrictions I should know about?
5) If I cancel/switch, are there cancellation fees and how is any refund calculated (pro-rated vs short-rate)?

Consider the Cancellation Fees

If you decide to switch your auto insurance coverage to another company, ask about cancellation fees before you pull the plug on your current policy.

Key points to keep in mind:

Near renewal = few or no fees: If you’re close to the end of your term, you may be able to cancel with little or no penalty.
Mid-term cancellations may cost money: Some companies charge a flat fee; others use a “short-rate” method that keeps a small portion of your unearned premium as a penalty. In many cases, you’ll get a pro-rated refund of any unused premium once the policy is canceled.
Coordinate dates carefully: Try to schedule your cancellation date to match the effective start date of your new policy so there’s no gap in coverage.
Confirm cancellation and renewal status: Make sure your old policy is actually canceled and not set to renew automatically.

Depending on how far into the term you are and how you pay, switching mid-term could result in a credit or premium refund. Ask your insurer how they calculate refunds and fees so there are no surprises.

Cancellation Fees by Insurance Company:

Common Mid-Policy Change Scenarios (and What to Do)

You paid off your car loan

You may be able to raise deductibles or remove comp/collision if you own the car outright (but weigh the risk of paying out of pocket).

You moved or changed where the car is garaged

Update the garaging address promptly—rates and required coverages can change by ZIP code or state.

You’re driving a lot more (or less)

Ask about updating annual mileage, low-mileage programs, or telematics discounts so your policy matches real-world driving.

You added a household driver

Many insurers require you to list household drivers. Leaving someone off can cause claim disputes later.

You bought or sold a vehicle

Don’t rely on assumptions—add/remove the vehicle and confirm the exact effective date of the change.

You want to reduce your bill fast

Start with deductibles and optional coverages, then compare quotes if your insurer can’t get you where you want to be.

Tip: Changes to drivers, vehicles, address, or mileage can trigger re-rating. Ask if the insurer needs documentation (photos, odometer reading, lienholder info, etc.).

It’s Worth Calling Your Insurer to See If You Can Reduce Your Rate

If you’re looking to save money or feel that your current coverage no longer matches your needs, it’s smart to be proactive. Don’t assume your good driving record will automatically reduce your rates over time.

Even safe drivers often see higher auto insurance bills over the years due to:

More accidents and claims in their state or ZIP code
Rising repair and medical costs
Inflation and overall price increases

The good news is that you’re not powerless. You can:

Call your current insurer and ask what changes you can make to reduce your premium
Review your coverage and limits to make sure you aren’t over-insured—or under-insured
Shop around and compare quotes with other insurers if your current company can’t offer better pricing

A quick conversation could uncover discounts or coverage adjustments that save you hundreds of dollars per year without sacrificing the protection you actually need.

Sources and further reading

Rules can vary by insurer and state. For official consumer guidance, see:

FAQs on When You Can Change Coverage

Can I change my car insurance coverage or limits in the middle of my policy term?

Yes. In most cases, you can change your car insurance coverage or limits mid-term. You can raise or lower certain limits, add or remove optional coverages, and even adjust your deductibles (subject to state and lender rules). The insurer will usually issue an endorsement and adjust your premium from the effective date of the change forward.

Can I switch car insurance companies before my current policy ends?

Generally, yes. You can usually switch insurers mid-policy if you find better coverage or a lower rate. Before canceling, make sure your new policy is fully issued and has a confirmed start date. Then, schedule your old policy to end on the same day your new one begins to avoid any lapse in coverage, which can hurt your rates later.

Are there any changes I’m not allowed to make?

You cannot add new coverage after an accident and expect it to cover that past loss—for example, you can’t add collision coverage after a crash and have it pay for that damage. You also can’t reduce your liability limits below your state’s minimum coverage requirements, and if your car is financed or leased, your lender might forbid deductibles above a certain amount.

Will I be charged a fee if I cancel my car insurance early?

Possibly. Some insurers charge a cancellation fee or use a short-rate calculation if you cancel before the end of the term. Others allow you to cancel at any time with no penalty. Before switching, ask your current company about any cancellation fees and whether you’ll receive a pro-rated refund for the unused portion of your premium.

What happens if I let my policy lapse while changing coverage or companies?

A lapse in coverage—even for a short time—can cause problems. It may trigger notices to your state DMV, lead to fines or license issues, and make you look riskier to future insurers, which can raise your rates. When changing coverage or switching companies, always arrange for the new policy to start on or before the date the old policy ends to avoid a coverage gap.

How often can I change my coverage or limits?

Most insurers allow you to adjust your coverage and limits whenever your needs change—for example, when you buy a new car, pay off a loan, or change how much you drive. Some companies may limit how frequently you can make changes within a billing period, so it’s a good idea to call your insurer and ask if they have any specific rules or restrictions.

Can changing my coverage help lower my premium?

Yes, but it has to be done carefully. Raising deductibles, removing unnecessary optional coverages, or adjusting limits to better match your risk can lower your premium. However, you don’t want to leave yourself underinsured just to save a few dollars. Talk with your insurer or agent about which changes make sense for your budget and risk tolerance.

Should I call my insurer before shopping around with other companies?

It’s often smart to start with your current insurer. Ask if they can re-rate your policy, apply new discounts, or adjust your coverage to lower your bill. If they can’t get your rate where you want it, then it makes sense to compare quotes from other insurers. When you do shop, remember not to cancel your old policy until you know your new coverage is active.