Can I get auto insurance if I owe another company?
If you are asking, can I get auto insurance if I owe another company, the answer is yes. If you want to switch car insurance companies, you can do so whenever you wish. However, you should pay off any outstanding balances with your current company before switching to avoid credit score issues.
Free Car Insurance Comparison
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Sep 12, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Sep 12, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
Wondering can I get auto insurance if I owe another company? You can switch companies while still owing another company, but if you’re shopping for new auto insurance coverage because you don’t think you’re getting the best cheap auto insurance rates for your needs, pay your old company off first.
Not paying off your outstanding balances could result in a poor credit score, which will impact your car insurance rates negatively.
If you’ve paid off your old insurance company and want to find a cheaper option, enter your ZIP code into our FREE online tool to get multiple quotes and start comparing cheap rates.
Switching Insurance Companies When Owing an Insurance Company Money
Nothing stops you from switching providers if you still owe money to your current provider. If you find a better deal with another company, you may want to terminate coverage with your current provider and start to work with the new one. In this case, it should be as simple as calling your current provider as soon as you have formalized arrangements with the new company.
Your first insurance provider will then terminate your current policy, and you should have nothing to pay as most insurance is paid in advance.
Can you owe money to a car insurer?
It’s unusual for anyone to owe money to their insurer. In most cases, you pay for insurance coverage in advance, so you shouldn’t worry about falling behind. However, if you forget to make a payment, your insurance company will typically send you a reminder and give you a grace period to catch up.
Sometimes an insurance company will issue an endorsement causing a material change to the policy, which may trigger an outstanding balance.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
How Auto Insurance Companies Structure Payments
You typically pay insurance payments in advance as the company takes the risk on your behalf when they confirm the policy. Underwriters assess individual policies based on how much risk they represent and then calculate a yearly rate. However, many providers are willing to let you make semi-annual or even monthly payments.
Insurance Company Grace Periods
Many companies will offer a grace period to give you time to submit your payment if you have forgotten to do so. Some organizations will provide you with 10 to 14 days, while others may offer an entire month.
If you fail to pay, they’ll probably send you a formal letter advising you that they will be terminating your coverage due to non-payment.
Learn more: What to Do if You Can’t Pay Your Auto Insurance
How Not Paying an Insurance Company Can Harm Your Credit Score
It’s never a good idea to default on a premium, so if you are switching insurance companies, ensure that you always make the final payment to your first provider. If they cannot recover that money from you, it may show up as a default on your credit report. Also, keep in mind that insurance companies check credit reports when writing a new policy, so this default may cost you more in the future through higher premiums.
Read more: How Credit Scores Affect Auto Insurance Rates
Take a look at the table below to see how your credit score can affect your rates.
Average Annual Auto Insurance Rates by Credit Score
Auto Insurance Company Good Credit Score Fair Credit Score Poor Credit Score
USAA $1,821.20 $2,219.83 $3,690.73
State Farm $2,174.26 $2,853.00 $4,951.20
Geico $2,434.82 $2,986.79 $4,259.50
American Family $2,691.74 $3,169.53 $4,467.98
Nationwide $2,925.94 $3,254.83 $4,083.29
Progressive $3,628.85 $3,956.31 $4,737.64
Farmers $3,677.12 $3,899.41 $4,864.14
Allstate $3,859.66 $4,581.16 $6,490.65
Travelers $4,058.97 $4,344.10 $5,160.22
Liberty Mutual $4,388.18 $5,604.24 $8,802.22
As the data shows, you’ll get the best rates with a good credit score, while with a fair score, your rates can increase by up to an average of 31 percent. With a poor credit score, your rates may increase by as much as 127 percent.
Do auto insurance companies share information?
Remember that insurance companies check driver records when figuring rates. These companies share some of this key data, and if you apply for coverage with a new provider, they will be able to see your history. If they notice that you have a termination for non-payment, they may increase your premiums.
What To Do If You Can’t Pay for Auto Insurance
If you have difficulty paying for insurance, ask your provider about low mileage premiums or see if you qualify for any auto insurance discounts.
Read more: How To Lower Your Auto Insurance
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Bottom Line: Can I get auto insurance if I owe another company?
You can still apply for coverage with another provider, even if you owe some money to your current company. However, you should always pay any outstanding bills as a default could lead to issues with your credit score and higher premiums.
Whether you owe another insurance company money or not, enter your five-digit ZIP code into our FREE quote tool below to find auto insurance quotes so you’re ready to start a new policy as soon as you’ve closed out your old one.
Frequently Asked Questions
Can I get auto insurance if I owe money to another company?
Yes, you can still get auto insurance even if you owe money to another company. The fact that you have an outstanding debt does not typically prevent you from obtaining auto insurance coverage.
Will my outstanding debt affect my ability to get auto insurance?
In most cases, your outstanding debt will not directly affect your ability to obtain auto insurance. Auto insurance companies primarily consider factors such as your driving record, type of vehicle, location, and coverage needs when determining eligibility and premium rates.
Do I need to disclose my outstanding debt when applying for auto insurance?
Generally, auto insurance applications do not require you to disclose information about your outstanding debts. Insurers mainly focus on information directly related to your driving habits and history, vehicle details, and personal information needed for underwriting purposes.
Can an auto insurance company deny coverage based on my debt?
Auto insurance companies typically do not deny coverage solely based on your outstanding debt. As long as you meet their eligibility criteria and have a valid driver’s license, you should be able to obtain auto insurance coverage. However, keep in mind that your credit history can affect your premium rates in some cases.
Will my outstanding debt impact my auto insurance premium rates?
Generally, your outstanding debt itself does not directly impact your auto insurance premium rates. However, some insurance companies may consider credit-based insurance scores as part of their underwriting process. These scores take into account factors such as your credit history, which may indirectly influence your premium rates.
Should I inform my auto insurance company if I have an outstanding debt?
It is generally not necessary to inform your auto insurance company specifically about your outstanding debts unless specifically asked on the application form. However, it’s essential to provide accurate information about your driving record, vehicle, and personal details to ensure proper coverage and avoid potential issues during claims.
Can you go back to an insurance company that dropped you?
It depends on the insurance company, but you can apply for insurance at the company again and see if it will accept you.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.