How and When Can I Change Car Insurance Coverage or Limits on My Policy?

Last Updated on May 10, 2022

People often hesitate to switch auto insurance providers simply because they assume it will be a pain to change insurance coverage when their current policy is mid-cycle.  There is also a common assumption that there will be a financial loss stemming from the alterations in policy coverage or limits. Let’s demystify this issue once and for all.

When You Cannot Change Your Auto Insurance Coverage

You cannot tack on physical damage to your auto insurance coverage after being involved in an accident.  Though countless people try this roundabout way of saving money every single year, the majority get caught.  You are also barred from hiking your deductibles to a level the finance company does not allow in accordance with your lease or finance agreement.  Though it might sound odd, many drivers desire exorbitantly high deductibles in an effort to decrease their monthly auto insurance premiums. Finally, you are not allowed to reduce your auto insurance liability coverage beneath the minimum as mandated by the state.

You Can Make Mid-term Changes as Often as Desired

Just because your auto insurance policy is mid-term does not mean you are locked into your current monthly premium, coverages, and deductibles.  You can completely change auto insurance providers smack dab in the middle of your current term if so desired. You are also empowered to adjust your coverage and deductibles mid-term to boot.

Do not Terminate Your Policy Until Acquiring new Insurance

If you obtain a quote for new auto insurance, do not immediately cancel your current insurance just because it is comparably expensive.  Take your time, ensure the quote provided by the other insurance company is legitimate and wait until that coverage kicks in before canceling your other coverage.  The last thing you need is for a lapse in auto insurance coverage to cause your insurance rates to spike in the subsequent months and years. So make sure the new auto insurance policy commences on or before the date that the old policy ends.  Do not lose sight of the fact that the auto insurer is forced to report the dropped insurance to the state’s motor vehicle department as soon as that coverage is canceled. When in doubt, pick up the phone and reach out to the insurance company agent for further clarification.

Consider the Cancellation Fees

If you decide to switch your auto insurance coverage altogether, inquire about cancelation fees.  Ideally, the term will be on the verge of expiration so there will not be cancellation charges. However, if you decide to cancel your auto insurance policy prior to the end of the policy term, there will likely be a cancellation charge of some sort.  It should be possible to schedule the date of cancellation to match that of the effective start date of the new auto insurance coverage. This way, there is no lapse in insurance. Be sure to obtain confirmation the auto insurance policy is canceled and will not be renewed automatically.  If you switch to a new auto insurance provider in the middle of the term, you just might be entitled to a considerable premium refund based on the nuances of your payment plan.

Cancellation Fees by Insurance Company:

• AAA
• Allstate
• American Family
• Erie Insurance
• Farmers
• GEICO
• Liberty Mutual
• Mercury Insurance
• MetLife
• Nationwide
• Progressive
• State Farm
• The General
• Travelers
• USAA

You Are Free to Alter Coverages and Limits as Desired

Oftentimes, people simply assume their auto insurance coverages and limits are locked into place for a full year or six months as this is the period during which the insurance is provided.  However, the little-known truth is you can alter your auto insurance policy limits and coverages as often as desired. As long as your auto insurance provider is willing to make the requested adjustments to your policy at the point in time at which you request those adjustments, your policy can be amended.  However, there may be a limit to the number of policy alterations you can make in a given period of time. Check with your auto insurance provider to determine if there are any caps to the number of coverage/limit changes you can make in a certain billing cycle.

It Won’t Hurt to Call the Insurance Provider in an Effort to Reduce Your Rate

If you are looking to save money on your auto insurance coverage or if you are unhappy with your current coverages or limits, it is time to take action.  Do not assume an exemplary driving record will gradually reduce your auto insurance rates. The sad truth is even some of the best drivers in the United States end up with higher-and-higher auto insurance bills simply because there is an increasing number of accidents in their state or zip code.

The fact that money inflates as time progresses will also contribute to hiking your auto insurance premium even though you did not cause any accidents during prior terms.  Do the smart thing by picking up the phone and contacting your current auto insurance provider. Ask what sorts of alterations you can make to your current policy’s limits or coverage.  Make the appropriate changes to your policy and you just might save hundreds of dollars per year.