Switching car insurance might not always be high on your list of priorities, but there are some compelling reasons to consider a switch. Perhaps you’re seeking a lower rate, more comprehensive coverage, or better customer service. Or maybe you’ve moved to a new state and your needs have changed.

Whatever the reason, it’s important to shop around. Comparing car insurance quotes from multiple companies ensures you get the coverage you need at a cheaper rate.

If you want to know how to switch car insurance, these six steps will guide you from initial consideration to the final transaction.

Step 1: Decide what coverage you need

The first step is to nail down what type of coverage you actually need. Car insurance isn’t a one-size-fits-all situation — you need to customize it to fit your needs and risk tolerance.

Consider the following when deciding on your coverage amount:

• Coverage limits: Liability insurance is mandatory in nearly every state.1 But it only covers injuries and damages to the other driver if you’re at fault in an accident; it won’t cover your injuries or damages to your vehicle.

• Coverage types: Beyond liability, you have several optional coverages to consider, including collision insurance, comprehensive insurance, full glass coverage, and rental reimbursement.

• Unique coverage needs: You may have specific needs, such as rideshare coverage for driving for Uber or Lyft or gap insurance to protect you in case your financed vehicle is stolen or totaled in an accident.

• Deductibles: A higher collision or comprehensive deductible can lower your premium, but make sure it’s an amount you can afford if you file a claim.2

If you’re unsure what coverages are right for you, you can speak with an insurance agent. They can provide personalized advice based on your specific situation.

Step 2: Check for potential cancellation penalties

The next step is to examine your current policy for any potential cancellation penalties.

Car insurance policies are normally pretty flexible, allowing policyholders to cancel their coverage at any time. But this doesn’t always mean you can walk away without incurring some costs.

While many insurance companies offer prorated refunds if you’ve paid your premium in advance, some may charge a flat cancellation fee or calculate your refund on a “short-rate” basis. “Short rate” means the insurance company keeps more of your premium to cover the administrative cost of writing a policy that doesn’t run its full term. Be sure to read your insurance policy details, looking for sections that discuss termination.

Step 3: Shop around for quotes from multiple insurers

The next step is to shop around for quotes from several different insurance companies. Here are some reasons why you shouldn’t just go with the first company that fits your budget:

• Cost savings: Car insurance rates can vary greatly from one company to another, even for the same coverages. By shopping around, you can find the most competitive rates, potentially saving hundreds of dollars annually.

• Coverage options: Different insurance companies offer varying coverage options, endorsements, and discounts. Comparing quotes allows you to find a policy that provides the coverage enhancements and benefits that are most important to you.

• Customer service and satisfaction: The quality of service from an insurance company is just as important as the cost and coverage. Reading reviews and checking ratings from the Better Business Bureau can help you gauge their customer service and claims handling.

Step 4: Purchase a new policy and avoid a lapse in coverage

After evaluating your options, choose the quote with the best combination of price, coverage, and service for your needs. Before finalizing your purchase, review the quote details carefully to ensure they match your expectations. Pay special attention to the coverage limits, deductibles, and any exclusions or conditions.

You can usually purchase a policy online, over the phone, or in person if the company has local agents. Be prepared to provide detailed information about yourself, your vehicle, and your driving history.

Coordinate the start date of your new policy to ensure it begins before your current policy expires. This is crucial to avoid a lapse in coverage and potential penalties or suspensions from your state.

You’ll typically need to make the first month’s premium payment to activate the policy. Most insurance companies offer monthly installments, but paying in full could come with a discount.

Step 5: Cancel your previous insurance policy

Once your new car insurance policy is in effect, the next step is to formally cancel your previous policy. This is generally a straightforward process, but the method can depend on the insurance company. You can typically cancel over the phone or by visiting your local agent’s office.

Some companies may allow you to cancel your coverage online or through the mobile app. In any case, you may need to put the request in writing or electronically sign a cancellation request form.

Step 6: Swap your insurance ID cards

The final step in switching your car insurance is to swap out your old insurance ID cards for the new ones. Ensuring you have the right insurance ID cards in your vehicle isn’t just a matter of organization — it’s a legal requirement in most states.

Once you purchase your new policy, the insurance company should provide you with new ID cards. It may make digital ID cards available through its website or mobile app or through email, and you can print them out. Your insurer might also mail a physical copy, but that could take a few days to arrive, so a printed option is best if you need proof of insurance immediately.

To protect your personal information, be sure to shred or dispose of your old ID cards securely.

When you should switch insurers

Here are several scenarios where switching car insurance companies might be a smart move:

• You’ve moved. Relocating to a new area can affect your insurance premiums due to changes in risk factors, such as crime rates, traffic patterns, and weather conditions.3

• Your premiums have increased. If your current car insurance company just sent you a rate increase without any changes to your driving record, it might be a good time to look for better rates elsewhere.

• You need to add a new car or driver. Major changes to your policy, like adding a new car or a teen driver, can be an ideal time to compare offers from different insurance companies to ensure you’re getting the best deal.

• Your circumstances have changed. Certain life changes, such as buying a new home, getting married, improving your credit score, or changing jobs, can alter your insurance needs or allow you to qualify for new discounts.

• You’re unhappy with your current insurer. If you’re dissatisfied with your current insurer’s customer service or claim handling, switching to a company with a better reputation for customer satisfaction can improve your peace of mind.