Switching auto insurers is one of the simplest ways to save money, but it’s also a process where small missteps can create big headaches. A missed date, an overlooked document, or a misunderstanding about coverage can lead to higher premiums or worse, a lapse that affects your driving record.
Before you make the move, here are the most common mistakes drivers make when changing carriers and how to avoid them.
1. Cancelling the Old Policy Before the New One Starts
This is the number-one mistake drivers make.
A policy must be active every minute you own and drive your car. Even a short lapse hours, not days can:
- Increase your insurance rates
- Trigger penalty fees in certain states
- Cause problems with your lender
- Leave you unprotected if an accident occurs
Always secure the new policy first, get written confirmation, then cancel the old one with a specific end date.
2. Failing to Match Coverage Limits Accurately
Some drivers accept the lowest quote without checking the fine print. Lower prices often come from:
- Reduced liability limits
- Higher deductibles
- Removal of optional coverage (rental, roadside, UM/UIM, etc.)
Before switching, make sure your coverage levels match your needs, not just your budget. A slightly cheaper policy that underinsures you isn’t a smart trade-off.
3. Forgetting to Notify Your Lender or Leasing Company
If your vehicle is financed or leased, your lender must remain listed on your policy.
Many drivers switch insurers and assume everything updates automatically it doesn’t.
Failing to notify your lender can lead to:
- Repeated letters demanding proof
- Delays in processing your paperwork
- Forced-placed insurance (very expensive)
A simple email with your new declarations page avoids all of this.
4. Overlapping Policies and Double Billing
Another common issue happens when drivers forget to formally cancel their old policy. You could end up paying for coverage with two insurers at once.
The fix is simple:
- Cancel your old policy only after the new one is confirmed
- Request the cancellation date in writing
- Ask for a refund for any unused premium
Most insurers send refunds promptly once dates are verified.
5. Not Checking for Early Cancellation Fees
Some insurers charge a small fee if you cancel mid-term.
It’s usually minor, but it’s still something to factor in especially if it affects your total savings.
Before switching, ask your current insurer:
- Is there a cancellation fee?
- How much is the prorated refund after cancellation?
This helps you calculate the true cost of switching.
6. Forgetting to Swap Out Insurance ID Cards
It sounds small, but it’s a big deal during traffic stops or accidents.
Drivers often overlook updating:
- Physical ID cards in the glove box
- Digital cards in their phone apps
- Proof-of-insurance documents for employers (if required)
Keeping outdated cards can complicate claims or police reports if something happens.
7. Assuming Discounts Will Transfer Automatically
Discounts vary widely between insurers.
A clean driving record won’t always guarantee the same savings.
Before switching, confirm:
- Multi-car discounts
- Bundling options (home + auto)
- Safe driver or telematics programs
- Student, military, or occupation-based savings
A quick review can uncover discounts you didn’t know you qualified for.
8. Overlooking State Specific Requirements
Every state has different minimum liability laws.
Drivers moving from one state to another or even purchasing coverage online sometimes mismatch their coverage.
Make sure your new policy:
- Meets state minimums
- Has the required uninsured/underinsured motorist levels
- Includes any mandated benefits
If you rely on your agent or app to do it automatically, you might miss something.
Switching auto insurers can absolutely save you money, but only if you do it the right way.
The biggest issues are coverage gaps, mismatched limits, and lender problems are easy to avoid with a little preparation.
The best approach is simple:
Shop smart, overlap policies properly, keep documentation, and verify every detail before you finalize the switch.
In another related article, How to Switch Auto Insurers Without a Coverage Gap
