Dave Ramsey’s 3 tips for switching car insurance the easy way

Image source: Getty Images

Don’t look for new car insurance without checking out these tips.


Key points

  • Switching car insurance can sometimes help drivers save money.
  • Switching to another insurer can be a hassle, but Dave Ramsey has tips to make the process easier.
  • Drivers should assess their coverage needs and make sure the new policy is in effect before canceling the old one.

Switching car insurance can be unpleasant, but it doesn’t have to be. Dave Ramsey has some tips on how to switch policies easily – which can potentially provide significant financial savings if a different insurer offers cheaper premiums for the same or better cover.

Drivers considering making the switch should check out these tips from Ramsey, which he says can make getting a new policy “as easy as waving a magic wand”.

1. Find out what types of coverage are needed

There’s a simple reason why Ramsey explains that researching the types of coverage needed should be the first step drivers take if they want to make the process of switching insurers easy.

“A lot of people don’t know how to change car insurance because they don’t really know what they should be buying,” he explained. To figure this out, he suggested drivers first look at the current coverage they have and then research what each type of protection is so they can decide if it’s needed.

For most people, Ramsey believes it’s important to have $500,000 in liability coverage to pay for damages caused to others. It also recommends collision insurance to pay for the repair or replacement of the driver’s own vehicle, as well as comprehensive coverage to pay for any non-accident issues affecting the policyholder’s car.

Ramsey also suggests considering the amount of the insurance deductible, which is what the policyholder must pay out of pocket when a covered loss occurs before the insurer starts collecting the tab.

“A high deductible means you pay more upfront for repairs if something happens to your car, but you’ll pay lower monthly premiums. Unless you’re extremely accident-prone, it pays to have a high deductible to save a little money each month,” Ramsey said.

2. Consider working with an independent insurance agent

Once you’ve decided how much coverage to buy, the next step to switching insurance is to compare policy offers from many different providers. Ramsey recommends checking six or even 10 different insurers to see who offers the best price.

While this can be done online, Ramsey believes it’s best to work with an independent insurance agent. He says they are “experts on how to switch car insurance” and can make the process of comparing quotes easier for consumers.

Finding an independent agent who can get quotes from multiple insurers isn’t a bad idea – especially for people who are busy or who just don’t enjoy the shopping process. Of course, this is not strictly necessary as it is also quite easy to get quotes from insurers online.

3. Enter the new policy before canceling the old one

Finally, Ramsey has some other important tips for simplifying the process of switching car insurance. “Before you go to cancel your old insurance policy, make sure your new policy is effective,” says Ramsey. And it also urges drivers to make sure they “print your new ID cards on the vehicle and put them in the glove box in case you need them!”

This can help drivers avoid legal issues that could arise if there is a gap in coverage between canceling the old policy and purchasing a new one.

Following this advice makes it easy to switch insurers — which opens the door to savings on coverage when a new company offers a cheaper policy than what your current insurer offers.

The Ascent’s Best Car Insurance Companies for 2022

Ready to shop for auto insurance? Whether you’re focused on price, claims handling or customer service, we’ve researched insurers across the country to provide our best-in-class picks for auto insurance coverage. Read our free expert review today to get started.

Leave a Comment