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Switching car insurers? Get a transfer discount

Des Toups



Angry consumerAlmost all car insurance companies reward you with loyalty or persistence discounts for renewing your policy year after year.

But many also will offer you a discount for moving your business to them.

A typical transfer discount is between 5 percent and 10 percent.

Available to: Drivers who start a policy with a new auto insurance provider.

Caveats: Usually to obtain this discount a driver must switch to a new auto carrier before the next premium is due with their current insurer.  Generally, you will need to start shopping around two weeks or more in advance of the end of your current auto policy in order purchase a new policy to take advantage of this “early shopper” discount.

Length: One-time only discount usually. If you continue with the new insurer, you may then be eligible for a renewal discount at the next policy period.

How to switch car insurance companies

Make sure you have a new policy in place before you cancel your old one. A lapse in coverage is a huge black mark on your record, even if it’s just for a few days. If you want to see what to expect when shopping for a new policy, visit our car insurance estimator page for details on what makes rates go up and down.

You don’t have to wait for a renewal notice from your current car insurance company to begin shopping. If you switch in the middle of a policy period, the insurance company will prorate your premium to the cancellation date and return the balance to you.

It’s easier, though, to time a change to renewal time. You should get a renewal notice about a month before your policy lapses. The notice should also list your current coverage levels and discounts, making it much easier to comparison shop.

Take note of any discounts or benefits you may have accrued with your old company over time, such as accident forgiveness or loyalty discounts. Your new insurer may offer them, but not right away.

A transfer discount is meant to help ease the transition.

How to cancel your old auto insurance

Don’t just let your old policy lapse. Cancel it.

If you don’t cancel it officially, you’ll continue to be billed and eventually get canceled for failure to pay. That can lead to a slew of complications.

To cancel your auto insurance policy, tell your insurance company in writing, specifying the date you want the policy canceled and the reason for the cancellation.

Your old insurance company may ask you for a policy number. Many states require insurance companies to report cancellations. If you don’t supply a new policy, you could be reported as uninsured. You don’t want that.

The process ends when you get a notice from your old insurance company giving you the exact date and time your coverage ends.

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