Switch Car Insurance After Accident

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Jessica Fox 08-07-2021

Can I Switch Car Insurance After Accident?

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If you’ve been involved in an accident and aren’t loving the customer service you’re receiving since the accident, it’s understandable you’d want to look elsewhere for car insurance. 

It’s your right to switch car insurance providers whenever you want, but that doesn’t mean that you should. There are certain instances when changing car insurance wouldn’t be in your best interest. 

Read on, and we’ll go over everything!

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Switching Car Insurance After An Accident

You can legally change your car insurance at any time, even after an at-fault car accident. Most insurance companies would advise you that the worst time to change insurance is the day of an accident. If you absolutely must switch, do so after the accident claim is processed. 

However, if you choose to change up insurance companies on the heels of an accident, there are some things you should know about first:

  • Red Flag: If you decide to switch providers the day of or shortly after a car accident, it raises a red flag to prospective insurers.
  • Dealing With Two Providers: If you jump ship after an at-fault claim, beware that you’ll have to deal with 2 insurance companies while processing your recent claim — this can lead to many headaches down the road.
  • Submit Pre-Existing Claim: If you’ve gone and changed insurance companies already, you can’t submit an at-fault claim regarding your previous accident with your new provider. However, for other non-fault claims, you can file claims against the other driver’s liability — just double-check with your new provider.
  • Make Changes To Your Coverage: If an accident has already occurred, you can’t make changes to your car insurance policy (coverages, deductibles, limits) before reporting your accident, as this would be insurance fraud. Whatever your car insurance plan was at the time of your accident is what your insurance will use to process your claim.

The Importance Of Being Honest

Many reasons could lead someone to leap to another insurer after an accident; just remember when you’re applying for new coverage to be forthcoming about your accident. There is never a good reason to lie to an insurance company because if you’re caught, this could lead to a whole world of bad:

  • Insurance fraud for lying, forgetting or omitting information
  • Losing premium discounts
  • Trouble with your state
  • Policy cancellation
  • Adjusted rates based on new information

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Why Sticking With Your Insurer Could Save You Money?

It may seem counterintuitive that your current provider will save you money after your car accident, but it’s affordable to stay put in most cases. Part of the reason you’ll fare better is that your insurance company has a history with you, so they’ll treat you like a friend versus a stranger that they’ve never associated with before.

Here are some of the benefits to riding out your accident claim with your current insurance company:

  • Escaping Premium Hikes: Since every insurance company uses different ways to calculate premiums, it makes sense that after an accident, you may be fearful of premium hikes, but that doesn’t mean you’ll avoid one by going elsewhere.
  • Affordable Rates: Most insurance companies don’t issue premium adjustments until renewal, whereas new insurance companies armed with your current accident will slap on a more expensive rate off the-hop. Yes, this will still lead to a premium adjustment with your current provider. If this is a concern to you, it’s best to shop around for new insurance during renewal time so you can compare apples to apples.
  • No Cancellation Fee: If you cancel ahead of renewal, you’ll be subject to a cancellation fee. Every insurance company approaches cancellation fees differently; some offer a flat rate while others make you pay 10% of your remaining balance.
  • Loss Of Discounts: If you leave behind your current insurer, you could miss out on discounts and perks. These are some of the cost-saving you could lose out on by going elsewhere:
    • Loyalty: Every year you’re with your provider, you get a small percentage off — between 2%-5%.
    • Bundling: If you bundle multiple insurance products, you’ll lose this discount — roughly 11% if you move your car insurance elsewhere.
    • Accident Forgiveness: If this is your first offense, you can apply your one-time-only accident forgiveness.
    • Vanishing Deductibles: You’ll lose your vanishing deductible if you start with a new car insurance policy with another company.

Switching Car Insurance After An Accident

Legally you can switch car insurance providers at any time, but this doesn’t always mean it’s the best option as you may forgo cost-saving discounts or perks. If you aren’t satisfied with the customer service from your current car insurance company, then make sure you understand all possible outcomes — the good and the bad — before making the switch.

Jessica FoxJessica Fox has been a freelance writer for five years, with a specialty in health, wellness, and insurance. During this time, she’s written for some of the biggest B2B and B2C brands from around the world. Jessica is also the mother of two young daughters and loves coffee, writing, and working out.