You don’t need to wait until the renewal to make adjustments to your coverage. There are a few reasons why policyholders may want to make changes to their policies while it is still active like adding or removing a driver, changing the car or address and premiums may need to be adjusted up or down as a result. Nonetheless, automobile insurance companies cannot increase or reduce your premium in the middle of a policy term. They have to wait for renewals to make modifications to their prices.
Only on rare occasions and in case of brand-new policies, they may be able to ask additional premium if they discover new information requiring them to charge more and they have to do it within 60 days of accepting a new risk. This rule doesn’t apply to renewals and after this binding period. For example, you bought a new policy and the company discovered a new piece of information different from what was declared on the quote from. Then, they can cancel the policy or ask for an additional premium. Even if the agent made a mistake in calculating premiums, they can ask you to make up the difference, as long as it is a new policy and within the first 60 days.
Car insurers cannot raise rates in the middle of a policy contract, except for the above-described binding period and following policyholder-initiated changes to the policy. They have to wait for the renewal to make inflationary adjustments or raise rates due to events that happened during the policy period. For example, they cannot raise your rates after an accident, claim, a recent traffic violation conviction or deteriorating credit scores.
This works both ways as auto insurance companies cannot reduce premiums for similar reasons like improving credit score or traffic tickets coming off your record since the start of the policy. If you feel you can now get better rates thanks to improvements in your circumstances, you need to shop around and switch when you find a better deal.
On the other hand, policyholders have flexibility to make changes to coverage. Life goes on and important events requiring you to inform your carrier don’t fall at renewal periods. Here are some of the most common reasons for mid-policy car insurance premium changes;
- You can add or remove a driver from your policy any time.
- You can replace the car on the policy or even add another vehicle to it in most cases.
- You can change your address if you moved
- You can buy additional coverage but you may not be able to buy certain coverage like Accident Forgiveness mid policy and have to wait until renewal
- You can change coverage limits in most cases.
- You need to notify the insurer of any vehicle modifications
- You can make changes to vehicle usage or yearly mileage
These changes can negatively or positively affect your premium. Then, your car insurance provider will recalculate the premium and let you know if you are getting a refund (or credit) or need to pay a little bit more. These are pretty common for carriers and they have no problem accommodating the requests.
All policyholders need to do is either contact their vehicle insurers or agents by phone or make the changes themselves if they have access to their account on the insurer’s website or app. Usually, changes take place with immediate effect and you get a confirmation.
However, you may have to change your policy or even your vehicle insurer in some cases. For example, if you move to another state you will have to cancel your old policy and buy a new policy that meets the requirements of your new state, even if you stay with your current carrier.
Auto insurers cannot cancel your policy unless you have done something serious like being involved in insurance fraud or missed your premium. However, policyholders can switch anytime, even in mid-term and most companies don’t even charge cancellation fees.
So, you should always shop around and don’t wait until renewal if there is a serious change in your particulars like your new partner has a terrible driving record. Your current insurer may be very competitive for good drivers but very expensive with a bad driving record.