When you switch auto insurance companies, it’s important to have a new policy in place or a plan for a new policy. There’s no obligation to show your new insurance company proof that you have had insurance in the past, but it could be a good idea for discount reasons. If you don’t show proof to insurance companies that you have continuous coverage, then they could assume you have a lapse in coverage meaning you would have to pay more. A lot of insurance companies offer a discount for people that have continuous coverage no matter what company you are with. When you have a lapse in coverage you may lose the opportunity for that type of discount.

Having a lapse in coverage will usually leave your insurance company charging you more depending on how long you go without insurance. If it is for a short time like a few days, it might not be a big deal, but your rates could still go up. If you let your insurance lapse over 30 days, it could be difficult for you to get affordable auto insurance with any auto insurance company. Your new insurance company wants to see that you had a previous policy, so they know that you had legitimate coverage in the past. If you don’t show your new insurance company your old policy, you could be charged more for future coverage.

If you are planning on switching your auto insurance companies, you would have to notify your current auto insurance company about the change. They would provide coverage until the end of the current month, or until the time period runs out for the premiums you already paid. If you pay a monthly premium you would be charged just for the whole month, and nothing more. If you pay your premiums in advance, you would get a refund for all the extra months you paid for, except the current month you are on.

The reason the insurance company keeps you on for the whole rest of the month, is because if you had to file a claim you would still have insurance to cover it. So while your old insurance is ending you have time to look and get set up with a new insurance company all while having legal coverage. Every insurance company is different, and some companies may require you to give them notice of cancellation more than a month in advance. Every situation may be different, so contact your agent to see how to switch your insurance the right and legal way.