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Can I Change My Car Insurance Coverage Mid-Term?

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: Mar 13, 2020

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Insurance Q&A: Can I change my car insurance coverage mid-term?

This post relates to making changes to your existing car insurance coverage, but staying with your current insurance company.

You’ll want to read our switching insurance companies article if you would like to hear the pros and cons of switching insurers to save some dollars via a lower insurance premium.

With that disclaimer out of the way, let’s get down to business and clarify the “rules” of switching your current coverage, mid-term, while keeping your existing policy in place with your current insurer.

What You Need to Know

That header sounds a little dramatic compared to the reality of the situation. Put simply, you are indeed able to add and drop coverage, as well as increase or decrease your liability coverage and physical damage coverage deductibles on an auto insurance policy at will (for the most part).

There are a few exceptions to this rule:

1. You cannot decrease your auto liability coverage below the mandatory state minimum.

2. You cannot increase your deductibles beyond what your finance company will allow per your finance or lease agreement (many people choose higher deductibles to lower their premium). If you actually own your car, this isn’t applicable.

3. You cannot add physical damage coverage to your policy after you’ve been in an accident – although thousands of people try this trick every year (most get caught).

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Why Would I Make a Mid-Term Change Then?

The reasons to make a mid-term change can technically run into the millions, as they are typically based on an individual’s personal situation.

Here are a few of the top reasons you might make a change to your auto policy mid-term:

1. Your finances have changed and you want to drop physical damage coverage (or some other type of coverage) or increase your deductible(s) to lower your insurance premium.

2. Related to #2; you may have paid off your auto loan mid-term and want to increase deductibles.

3. Perhaps you have a child on the way and want to increase your liability coverage in order to protect your assets.

4. Maybe you lost your job and want to lower your liability coverage limits to the state minimum to avoid driving uninsured because you can no longer afford your existing coverage.

5. Or you may have opted for some fancy coverage shortly after starting a new policy, but realize you no longer need/want it after a few years.

As you can see, this list may can go on forever. And the insurance gurus at TTAI wouldn’t be able to sleep at night if we didn’t point out that reducing liability coverage to save a few bucks is generally not a good idea unless you are at the end of your rope.

In other words, if you cannot afford rent or food…not that you can’t get your hands on the newest iPhone.

Read more: How much car insurance do you need?

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