Switching Car Insurance With an Open Claim: What You Should Know

If you’re thinking of switching to a new insurance company while you have a pending claim, there are a few things you should be aware of. These also apply if you already have a new policy lined up and you’ve needed to file a claim with your current insurer before your plan expires. 

• Your insurer at the time of the accident is responsible for processing your claim. Even if you get into an accident the day before your new policy begins, the claim will need to be filed with your old insurer because that was the policy in force at the time of the incident. Your new policy will not cover any damage that occurred before it began. This may add logistical complications as you’ll have to deal with two insurance companies until the claim is resolved.
• Expect higher premiums: In general, filing a claim — even if the damage was not your fault — is likely to lead to increased premiums. If you are actively seeking quotes from different companies while you have an open claim, you will likely get higher quotes than you otherwise would. If you already have a policy lined up, your premium will probably increase, so be sure to check if you’re still happy with your rate before moving forward.
• You may have fewer options: You may have a harder time finding a new insurer, as certain companies may be hesitant to insure a new policyholder with a recent, unresolved claim. This could limit your options and make switching less appealing.
• Customer service is important: If you’re in the middle of a claim, you can fully evaluate the service and support you receive from your insurer. Another company may offer a better rate, but if your company is managing the claims process swiftly and fairly, it may be worth paying a bit more to stay with them.

Switching car insurance companies with an open claim is the same process as moving to another company under normal circumstances.

1. Determine your coverage needs. You may be happy sticking with the same coverage, or you may decide you want to add or remove coverage. Consider your needs carefully so you know exactly what to get quotes for. 
2. Shop around. Once you know your coverage needs, get quotes from a few different companies. If you’re adjusting your coverage, check how those changes would affect your rate with your current insurer — that way, you can compare the quotes you receive fairly against your current premium. If you get a lower rate elsewhere, you can also try asking your current company if they can offer a more competitive rate. 
3. Purchase your new policy. Depending on the company, you may be able to complete your purchase online, or you may need to go through an agent. Confirm your coverages and your start date, and then make your first payment. Some companies offer a discount if you pay your premium in full upfront, which is a good option if you can afford to. Otherwise, ask about payment options to find a cadence that works for you.
4. Cancel your current policy. Once your new policy is confirmed, contact your current insurer to cancel your policy. Most companies allow you to cancel over the phone. You’ll need to specify your end date, which should be on or after the date your new policy begins. This is key, since avoiding a gap in insurance coverage is crucial. Your new insurer may also be able to cancel your old policy for you.

A recent car insurance claim can impact your auto insurance premiums and options, especially if the reason for the claim was an at-fault accident. Nationally, drivers with an at-fault accident pay around 47 percent more for car insurance than drivers with a good record. However, there are still ways to save money on insurance with violations on your record.

• Compare rates: All drivers should shop around and compare rates from several companies, regardless of their driving history. While rates will be higher for drivers with violations, insurers assess risk differently, and one company may offer you a significantly lower rate than another.
• Look for discounts: While a violation will exclude you from safe driving discounts, there are still many discounts you could be eligible for, such as bundling, safety equipment, low mileage, and multi-vehicle. Make sure you ask about discounts when getting quotes to make sure you’re getting the best possible rates.
• Lower your coverage: If you are struggling to find affordable coverage because of your driving record, you can consider dropping certain add-on coverages or lowering your liability limits. However, be sure to weigh the lower premiums against the potential high out-of-pocket expenses if you need to file a claim. 
• Increase your deductibles: If you have full coverage insurance, you’ll have separate deductibles for your collision and comprehensive coverages. The deductible is the amount you have to pay out of pocket before the insurance starts to pay. The higher your deductible, the lower your premium, since you share more of the cost with the insurance in the event of a claim. Before making changes to your deductible, make sure you can afford the higher amount in case you file a claim. 
• Consider pay-per-mile or usage-based insurance programs: Many insurance companies offer telematics discount programs, which track your driving habits and reward you for safe driving. You can participate in these programs even if you have violations, and they can even help incentivize safer driving. If you drive infrequently, it can be beneficial to look for pay-per-mile options, which charge you based on how much you drive and can save you a lot of money compared to a standard policy.

There is no rule against switching car insurance companies with an open claim, but it’s not always the best idea. Be sure to weigh your options before making a decision. You will still have to communicate with your current insurance company to resolve your open claim, even after you switch. In addition, your claim will be taken into account by other companies, which may quote you higher premiums. That said, if you find a great deal elsewhere and are unhappy with how your insurer has handled your claim, you can easily make the switch — having an open claim does not prevent that.