Things to Remember
- Throughout the year, you can adjust your insurance coverage
- Tell your insurer if you buy another car, which could impact rates
- Only fraud, late bills, or a revoked license can prompt mid-contract changes
Can car insurance go up mid-policy? Yes, if you have filed multiple claims or received a traffic violation, your car insurance can go up mid-policy due to the increased risk you pose to the insurance company.
The best auto insurance companies are bound by the terms of their policyholders’ contracts. Legally, they can only adjust coverages for certain reasons. However, as the purchaser, you have more flexibility to modify the contract if you understand any conditions that might restrict revisions in specific instances.
Do mid-contract changes affect auto insurance rates? Yes, changes to your address or vehicle may change rates significantly. Read more about the factors that affect auto insurance rates.
So, what are some reasons your rates may change mid-contract? Our guide explains whether insurance companies can raise rates without notice and if car insurance can go up mid-policy.
Read More: Factors That Affect Auto Insurance Rates
Table of Contents
How Mid-Contract Changes Impact Your Auto Insurance Rates
Can insurance raise rates in the middle of a policy? Yes, there are multiple situations that may cause your insurance premium to change before your contract term is over. Some of the most common reasons for insurance rate changes include:
- Changing your vehicle usage – such as increasing the mileage
- Removing an existing driver or adding a new one
- Changing your home address
- Adding a new car or removing an existing one
- Changing your coverage limits
- Modifying your car causing a change in its value
Fortunately, changing car insurance mid-term is rarely an issue with insurance companies.
Insurers know customer needs can shift rapidly and that these adjustments don't often occur at the exact moment when a car insurance policy is up for renewal.Scott W. JohnsonLicensed Insurance Agent
Most of the time, all it takes to change your insurance policy is a quick phone call or visit your auto insurance company’s website. You may even need to start over with a fresh policy at some point. That being said, moving from one state to another may cause you to have to purchase a new policy, even if you continue to use the same auto insurance company.
Learn more here: How Changing Your Address Affects Auto Insurance
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Restrictions to Changing Insurance Premiums Mid-Contract
Car insurance companies will want to retain your business, so they make it as easy as possible to update your coverage. That being said, while most insurance providers allow customers to manage their auto insurance policies, you might find some who only allow changes during contract renewal.
Moreover, some changes cannot be made in the middle of your contract, and you’ll have to wait until the contract is renewed. These changes are usually associated with any types of auto insurance coverage you can add on to your policy, such as:
- Accident Forgiveness
- New Car Replacement
- Rental Car Coverage
If you have any questions about how changes in your policymay affect you and your rates, contact your insurance company.
Factors That Affect Your Insurance Premiums
In most areas, auto insurance providers cannot reduce or raise your premiums until you renew your coverage. For example, if you have an at-fault accident, your insurance company typically can’t change your rate throughout the remaining term of the contract. The same is true for a DUI. However this does vary by state and your specific insurance policy agreement.
Read More: Cheap Auto Insurance After a DUI
Unless you commit fraud, lose your license, or stop making payments, your insurance prices should not increase during your contract, even if you are involved in more than one incident.
However, your renewed contract will likely reflect higher rates. Moreover, if you are involved in multiple incidents, they might refuse to renew your policy. If you’re not happy with the increased premium, you can cancel your auto insurance and consider switching to another auto insurance company.
Auto insurance companies consider a lapse in insurance coverage an indication of risk, and you won’t get an auto insurance discount for having prior coverage. Can insurance companies raise rates without notice? Usually, yes, they have the ability to, but all of the best providers in the U.S. work to keep their policyholders informed of any rate increases with plenty of warning.
You can see in the table below how your rates can increase after a lapse in coverage.
Auto Insurance Rates: Coverage Lapse Increase by Provider
| Insurance Company | California | Florida | South Carolina |
|---|---|---|---|
| Allstate | 10% | 20% | 15% |
| American Family | 14% | 18% | 10% |
| Auto-Owners | 12% | 10% | 8% |
| Erie | 9% | 13% | 11% |
| Farmers | 7% | 15% | 12% |
| Geico | 8% | 125% | 3% |
| Liberty Mutual | 16% | 22% | 18% |
| Nationwide | 13% | 17% | 14% |
| Progressive | 2% | 61% | 69% |
| State Farm | 11% | 19% | 7% |
| The General | 15% | 30% | 20% |
| Travelers | 14% | 12% | 9% |
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A lapse in coverage can more than double your auto insurance rates. However, you could shop with the best auto insurance companies that don’t penalize for a lapse in coverage to find the ideal rates and coverage for you.
More About Changing Auto Insurance Premiums Mid-Contract
If you are wondering, “Can I change my car insurance plan mid-year?” The answer is yes. You can, but there might be risks. Life happens, and you may get to a point where you need to make last-minute changes to your insurance policy. Most providers understand that these changes don’t always sync with the contract renewal period. For example, if you move, your rates may change significantly.
Find our more: Why did my auto insurance rates increase when I moved?
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— AutoInsurance.org (@AutoInsurance) April 7, 2023
There are several reasons you might want to change your coverage, and most likely your provider will allow you to do so. When your existing auto insurance coverage expires, you can change companies.
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Switching Auto Insurance Mid-Policy: What You Should Know
If your question wasn’t fully answered above, you might still be wondering, “Can I switch car insurance mid-policy?” Yes, you can. In fact, switching car insurance mid-policy is sometimes a strategic move to find better coverage and lower rates.
Here are 10 key tips and warnings for you to know before making any changes to your coverage:
- Review Your Current Policy: Before switching, review your current policy to understand your coverage, deductibles, limits, and any penalties for early cancellation.
- Compare Insurance Quotes: Obtain quotes from multiple insurance companies to compare coverage options and premiums. Consider factors like deductibles, coverage limits, discounts, and customer service reputation. Try our free quote generator to get started today.
- Check for Penalties: Some insurance companies may charge a fee for canceling your policy mid-term. Make sure to ask about any penalties before making a switch.
- Timing of Your Switch: Coordinate the start date of your new policy with the cancellation date of your current policy to avoid any coverage gaps. Ensure continuous coverage to comply with legal requirements. Remember a lapse in coverage often results in higher insurance rates.
- Transfer No Claim Bonus (NCB): If applicable, inquire about transferring your No Claim Bonus (NCB) from your old policy to your new one. This can help reduce your premiums. Learn more: How to Get a No-Claim Bonus (NCB) Auto Insurance Discount
- Notify Your Current Insurer: Inform your current insurance provider about your decision to switch. Follow their cancellation procedures and request a confirmation of cancellation in writing.
- Avoid Coverage Gaps: Ensure that there is no gap in coverage between the cancellation of your old policy and the start of your new policy. A lapse in coverage can lead to legal and financial consequences. If you find yourself with a lapse in coverage, check out our ranking of the 8 Best Companies That Don’t Penalize for a Lapse in Coverage.
- Update Information: Provide accurate information to your new insurance company, including details about your vehicle, driving history, and any changes in your circ*mstances that may affect your premium.
- Monitor Payments: Before canceling your old policy, make sure your premium payments are up-to-date and that your new policy is active. Keep copies of all communications and documents related to the switch for your records.
- Review New Policy Carefully: Before finalizing the switch, thoroughly review the terms and conditions of your new policy. Ensure that it meets your coverage needs and that there are no surprises in terms of deductibles, exclusions, or limitations. Get more advice in our article: What to Ask When Calling an Auto Insurance Company.
By following these tips and being diligent throughout the switching process, you can effectively transition to a new car insurance policy without major complications, increased insurance rates, or negative effects to your credit score.
Frequently Asked Questions
Can I switch insurance companies during my contract term?
Yes, you have the option to switch insurance companies even if your contract hasn’t expired. However, consider factors such as cancellation fees, potential rate changes with a new insurer, and any coverage gaps when deciding to switch mid-contract.
Get more helpful advice about switching insurance companies in our article: How to Switch Auto Insurance Companies
Can I change my insurance policy at any time?
Yes, you have the flexibility to make changes to your insurance policy at any time, even outside of the contract renewal period. However, it’s important to check with your insurance provider to understand their specific policies and procedures for making changes.
Can I make changes to my auto insurance coverage during the policy term without affecting my rates?
It depends on the specific changes you make. Some adjustments, such as updating your contact information or adding a safety feature to your vehicle, may not have an immediate impact on your rates. However, significant changes like increasing coverage limits or adding a high-risk driver could result in rate adjustments.
Will my auto insurance rates go down if I remove coverage mid-contract?
Removing coverage mid-contract may result in a reduction in your premium, depending on the type and extent of the coverage you remove. However, it’s important to consider the potential risks and consequences of reducing your coverage.
Will a lapse in coverage affect my auto insurance rates?
Yes, a lapse in coverage can lead to increased auto insurance rates. Auto insurance companies consider a lapse in coverage as an indication of risk, and you may not receive discounts for having prior coverage.
There are some providers that are more forgiving than others. Check our our top provider ranking: 8 Best Auto Insurance Companies That Don’t Penalize for a Lapse in Coverage.
Can I negotiate my auto insurance rates if I make mid-contract changes?
While you can discuss your rates with your insurance company, the flexibility for negotiation may vary. Factors such as your driving history, risk profile, and the specific changes you’re making will influence the potential for rate adjustments. It’s worth having a conversation with your insurer to explore your options.
Can car insurance companies change your coverage?
Legally, auto insurance providers are required to inform you of any changes to your policy within 60 days from the time your contract begins. After this duration, they can make changes only if you are convicted of fraud, you cease making timely payments, or your license is suspended or revoked.
What are at least three factors that affect the cost of insurance?
Some of the most common factors that impact auto insurance rates are driving record, coverage level, and vehicle type.
Read our guide for a complete list: Factors That Affect Auto Insurance Rates.
Is it okay to change car insurance every year?
You should always shop around for car insurance quotes on an annual basis to see if you can find better rates, discounts, and coverage options.
What happens if you cancel insurance mid-policy?
Most top providers send policyholders a refund for any unused portion of their policy if they cancel coverage, though some may charge a cancellation fee.
How much can an insurance company raise your rates?
Insurance companies can typically raise your rates by 5% to 20%, but these percentages will vary significantly based on your location and the insurance company’s policies.
There are laws that govern insurance company rate increases. Here are 4 that you should know:
- Rate Increase Notifications: Insurance companies are often required to provide policyholders with advance notice of rate increases. The notice period can vary by state and type of insurance but is typically at least 30 days before the proposed rate change takes effect.
- Anti-Discrimination Laws: State laws and regulations prohibit insurance companies from unfairly discriminating against policyholders based on factors such as race, gender, age, or disability. Rate increases must be based on risk factors that are actuarially justified and not discriminatory.
- Appeals and Review Processes: Most states have procedures in place for policyholders to appeal rate increases or file complaints with the state insurance department if they believe a rate increase is unjustified or unfair. These processes may include hearings, investigations, and opportunities for policyholders to present evidence or arguments.
- Rate Stability: Some states have laws or regulations aimed at promoting rate stability and preventing excessive or unpredictable rate increases. These measures may include limits on insurance rate increases and the frequency of those changes.
State laws regarding how much an insurance company can raise your rates can vary significantly.
Here are some examples of state laws and regulations related to rate increases in a few specific states:
- California: Insurance companies are required to justify rate increases and obtain approval from the California Department of Insurance before implementing significant rate changes. The department reviews rate filings to ensure they are based on actuarial principles and do not unfairly discriminate against policyholders. Make sure you know California car insurance minimum coverage requirements.
- New York: Insurance companies must file rate change proposals with the New York Department of Financial Services, and these proposals are subject to review to ensure they are reasonable and comply with state laws. Read more: New York Auto Insurance.
- Texas: State law allows insurance companies to change rates without prior approval from state regulators, but they must notify policyholders of rate increases in advance. Policyholders in Texas have the right to request an explanation of rate increases and file complaints with the Texas Department of Insurance if they believe a rate change is unjustified. Learn the Texas Minimum Auto Insurance Requirements.
- Florida: Requires insurance companies to file rate change proposals with the Florida Office of Insurance Regulation. The office reviews these filings to ensure they are actuarially justified and do not unfairly discriminate. Policyholders in Florida also have the right to request explanations of rate increases and file complaints with the office if necessary. Find the providers with the best deals: Cheapest Auto Insurance Companies in Florida
These examples show how different state laws governing insurance rate increases can be. It’s important for you to be aware of the specific laws in your state. Consult with state insurance departments or legal advisors if you have questions or concerns about your insurance rate changes.
Can car insurance raise rates without notice?
Yes, car insurance can increase without notice. In most areas, insurance companies can raise your premium without notice, but most will give policyholders a warning before implementing rate increases.
The notice period before rate changes varies depending on state regulations and the terms of your insurance policy.
It’s important to review your policy documents and stay informed about your insurance plan and rate changes.
If you have concerns about a rate increase or if you believe it was implemented unfairly, you can contact your insurance company for clarification and, if necessary, consider switching providers.
Think you need to change companies? Our free quote tool makes it easy to compare rates from the best companies in your area.
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Written by:
Michael Leotta
Insurance Operations Specialist
Michael earned a degree in Business Management degree with an insurance focus, which led to a successful 25-year career in insurance claims operations and support. He possesses a high-level of business acumen across multiple areas of the insurance industry. Over the course of his career, he served in multiple roles supporting claims operations including: Claims Specialist, Claims Trainer, Claim Au...
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Written by Michael Leotta
Insurance Operations Specialist
Reviewed by:
Dani Best
Licensed Insurance Producer
Dani Best has been a licensed insurance producer for nearly 10 years. Dani began her insurance career in a sales role with State Farm in 2014. During her time in sales, she graduated with her Bachelors in Psychology from Capella University and is currently earning her Masters in Marriage and Family Therapy. Since 2014, Dani has held and maintains licenses in Life, Disability, Property, and Casualt...
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Reviewed by Dani Best
Licensed Insurance Producer
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