Can I switch auto insurance companies if I have an open claim?

If you have an open claim with a car insurance company, then you might be wondering if you can switch to a new provider.

Can you switch car insurance companies if you have an open claim? What happens if you switch car insurance companies mid-claim? Today, we’re answering all your questions about moving to a new car insurance company in the middle of an open claim.

You Can Switch to a New Provider If You Have an Open Claim

First, let’s make one thing clear. There’s nothing preventing you from switching to a new insurance company if you have an open claim. You can typically switch to a new insurance company at any point. If you prepaid for a 6 month or 12 month policy, then you might even get a refund on the money you’ve paid – although you’re unlikely to get a refund if you’re on a month to month policy.

If you have an open claim with your old insurance company, then it’s still the responsibility of your old insurance company to deal with that claim. Switching to a new insurance company does not affect the validity of your claim with your old insurance company.

When you purchased a car insurance policy from your old insurance company, you entered into a contract. That contract states that the old insurance company is required to cover certain damages to your vehicle in certain situations. If you have an open claim, then your insurance company is required to process that claim regardless of whether you switch to a new company.

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Why Should You Switch Companies with an Open Claim?

We’ve established that you can switch to a new car insurance company in the middle of a claim. The next question is: why would you want to switch to a new car insurance company when you have an open claim?

Switching insurance companies mid-claim isn’t as uncommon as you may think.

The reason is simple: many people don’t realize how bad their current insurance company is until they make a claim. You might have received a great deal on car insurance from a little-known company. That car insurance company works great for you for months – until you get into an accident and you realize how difficult the claims process can be. Some car insurance companies are able to offer cheaper rates because they have low claims satisfaction.

If you’re unsatisfied with your current insurance company after a recent claim, then you might consider switching to a new provider – even if you have an open claim with your old provider.

Your New Insurance Company Will Not Handle your Old Claim

There’s another, less honest reason why someone might switch to a new insurance company in the middle of an open claim: some people try to “double claim” an incident. They might make a claim with their old insurance company, then switch to a new company and try to make a claim for the same incident.

Your car might have been damaged in an accident one week, for example. You make a claim with your old insurance company, then switch to a new insurance company and make a separate claim for a separate, fictitious accident.

Obviously, this is insurance fraud. “Double dipping”, or attempting to file the same claim with multiple insurance companies, is considered insurance fraud according to the Criminal Code.

There’s nothing wrong with moving to a new insurance company when you have an open claim, but it’s unlikely that your new insurance company will handle any incidents that occurred when you were covered by your old provider.

Will an Open Claim Affect Premiums with a New Insurance Company?

If you have an open claim with your old insurance company, then will that claim affect your new car insurance moving forward? Will an open claim affect premiums with a new insurance company?

The short answer is yes.

Insurance companies share data about customers with each other. If you have an open claim with one insurance company, then your new insurance company might see you as more of a risk – especially if you’re at-fault in the open claim.

If you’ve been involved in an at-fault accident, then your current insurance company might raise your rates. Most insurance companies will raise rates significantly after a single at-fault accident. You might be tempted to shop around for car insurance after the accident. However, don’t expect to save money. Your new car insurance company might not know about your recent at-fault accident, but they’ll certainly find it during the discovery process.

Ultimately, the likelihood of an open claim affecting your search for a new insurance company depends on the specific circumstances of your claim.

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Conclusion

You can switch car insurance companies in the middle of an open claim. If you do this, then your old car insurance company still needs to handle your old claim. However, there’s nothing preventing you from switching to a new provider.

Many drivers choose to move to a new provider after being unsatisfied with the way their old insurance company is handling the claim. This is perfectly okay.

Compare car insurance quotes today if you’re unsatisfied with your current car insurance company for any reason. If you do switch to a new provider, make sure you avoid any lapses in car insurance coverage.

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