When to switch your car insurance

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When to switch
Auto-renewals
Cancelling
No-claims bonuses
Named drivers
Documents
Claims

Switching your car insurance could save you money. But there are a few things to be aware of before making the move – like the best time to do it, how to do it, and whether you’ll have to pay any fees.

If you don't switch, your insurance will probably renew

Most car insurance policies auto-renew after 12 months. If you’re happy with your current provider then you can stick with them for another year without lifting a finger.

But the cost of your insurance will probably go up when it renews (and often by a pretty unfair amount). ‘Dual pricing’ is when insurance companies offer great deals to new customers and then hit them with big price hikes after the first year.

It’s worth double-checking that your policy auto-renews too, if you don’t want to switch. Some policies don’t, which means you could be left without cover when your policy runs out (which is illegal).

It's best to switch when your car insurance is up for renewal

If you switch before your current policy comes up for renewal you’ll probably have to pay a cancellation fee, so it’s usually cheaper to wait so you can switch for free.

Sometimes it does work out better to pay the cancellation fee and switch anyway. If you move to a new area or change jobs, you might have to pay an admin fee to update your insurance details.

Your insurer can also increase the price of your cover if they think the changes make you riskier to insure. The same goes if you buy a new car. You could find a better deal by shopping around – but make sure the saving is bigger than the cancellation fee.

How to cancel your current policy

You can’t just cancel your direct debit to stop your cover. You need to tell your provider and they might even want it in writing. It’s a good idea to read your policy documents or ring them up to check their cancellation process.

If your insurance is coming to an end and you’re in your auto-renewal window, you’ll just have to let your provider know – quick and easy (and free).

You will have to pay the cancellation fee if you cancel midway through your policy. You’ll be refunded for the cover you haven’t used, minus any fees and charges, though.

If you pay monthly for your insurance and you’ve made a claim, you’ll may still have to pay for the rest of the policy when you cancel. In this case it’s better to switch when your policy comes up for renewal.

If you have optional extras with your car insurance, like breakdown cover, you’ll have to pay to cancel these too – though usually less than your main cancellation fee. You’ll be able to take out new breakdown cover when you take out your new policy. If you’re covered for breakdowns by a different company, you can keep that cover running when you switch.

You’ll lose your no-claims bonus for the year if you cancel mid-policy

You can take your bonus with you when you switch. But if you cancel midway through your policy, you’ll lose any no-claims bonus you’ve been building up over the past few months.

If you’ve built up more than a couple of months, It might be best to stick it out and switch during your auto-renewal window so you earn another year’s bonus.

Named drivers can (usually) switch too

Most car insurance companies charge extra to add named drivers. If you have a named driver (or drivers) on your existing car insurance, make sure it still makes financial sense to switch if you bring them with you.

Check if your new insurance company accepts named drivers – and how they will impact your quote – before you make the move.

You’ll need a few documents to make the switch

Car insurance companies can ask for a ton of information when you sign up, and it might take a while to pull it all together.

As well as details about you and your car, you’ll need to have information about your claims history and proof of your no-claims bonus (which you get from your current insurance provider).

Make sure you find all these documents before you go to switch so there’s no delay when you take out your new policy that leaves you uninsured.

Switching when you’ve got an ongoing claim

If you’ve been in an accident, it might take a while for your insurance company to settle the claim – especially if they have to investigate who’s at fault.

Until they work that out, you and the other driver will have ‘joint liability’. This can make the cost of insurance higher when you’re shopping around for a new deal.

If you’ve got an outstanding claim your insurer’s looking into, it can make the whole process more difficult. If you do switch, your old insurance company will still be the one to settle the claim.

And if the claim is settled in your favour, then you can get updated proof of your no-claims bonus, and use this to ask for a refund from your new insurer.

Cancelling before you switch insurance

The UK’s Continuous Insurance Enforcement (CIE) laws are designed to make sure your cover is just that – continuous. If your car isn’t declared SORN it’s illegal to keep it uninsured, even if it’s just for a day or two while you’re sorting your new policy.

We know that getting everything lined up so your new policy starts when your old one ends can be tricky. Temporary car insurance (like ours) is a handy way to plug any gaps between policies.

Updated on 17th July 2020

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