Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 14, 2021

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In a nutshell...

  • When you’re shopping for a car insurance policy, you can request that the policy take effect at a future date
  • If you have a renewal coming up, it’s most convenient for you to choose your expiration date as your effective date
  • After you submit your application, the insurer will then send the information to an underwriter for review
  • If you find another policy or you decide not to switch, you can request that the application be terminated
  • Any money that you paid down to start your policy will be refunded to you in full

If you’re a planner, you like to know where you’re going to buy insurance before your existing policy even comes up for renewal. You know that you’re not satisfied with the carrier you have now but you aren’t quite sure where you should buy coverage.

Shopping around is the only way that you can achieve your mission to find affordable protection.

When you shop around, you’ll have to consider your mission. If you want to find the lowest coverage, the price might be the focus.

If you’re more concerned with a combination of pricing and service, you’ll have to research the carriers first to make a decision. If you’ve already applied through a carrier and you’ve decided to proceed with coverage elsewhere, let’s discuss what you should know.

Looking for better auto insurance rates? Start comparison shopping by entering your ZIP code above!

Shopping Around For Auto Insurance


You don’t have to keep paying too much for auto insurance. While there isn’t any way that you can avoid paying premiums entirely, there is a way to save money by shopping the market to find out which companies charge their clients the least amount of money.

When you’ve decided that you can no longer pay the high rates you’re paying, start getting quotes.

Every company charges their own rates, and some of these carriers target drivers in a certain demographic by keeping their rates in that class low.

The only way to pinpoint which one of the carriers that advertise their policies in your area as the best is to solicit quotes from leading companies all across the marketplace.

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Timing Your Mission to Find New Coverage


You’re allowed to cancel your auto insurance whenever you want to.

If you’re dissatisfied with your insurance carrier, unhappy with your premiums, or you’ve had a bad claims experience, you’re entitled to cancel your insurance at the beginning, middle, or end of the term.

You have to decide how timing your switch to a new carrier could affect you.

If you’re approaching your renewal and you’ve recently received new policy documents, it might just be best for you to pay your last payment and switch when the renewal term would have taken effect.

If you’re still in the middle of the term, it could be more convenient for you to wait until the payment period you’re in ends so that you can cancel your coverage without having to wait to receive a refund.

You Can Apply and Select a Future Effective Date

When you find the quote that you’re happy with, the next step would be to fill out an application for coverage. The application is a lot like the quote except the carrier asks for all of the details that the underwriting department needs to verify information.

You’ll have to enter your license number, your VIN number, and some other pertinent details in the application fields to complete it. You’ll also have to select the date that you want the coverage to start.

You can’t select a past date and you don’t automatically have to choose the date that you’re applying.

If you want to wait until your existing policy cancels, you should choose that policy’s expiration date in the future.

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Submit Your First Payment to Bind Coverage

Virtually all auto insurance companies will ask that you submit a payment with your application.

When you choose for the policy to take effect right away, the payment will ensure that your coverage is active.

If the date is in the future, the carrier might still ask for money with the application just to see that you’re serious about buying the policy.

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What is the 30-day binding period?


Applications must be reviewed by underwriters. These are the representatives employed through the insurance company that assess an application and assign a final rate quote.

When the application goes to the underwriter it will start to go through the binding. The binding period can last between 30 and 60 days in length.

Your coverage will be afforded during the binding period if the policy isn’t done being underwritten by the time that your effective date comes.

You’ll get a temporary binder in the mail that says you’re covered and then the final paperwork will be sent once everything has been run.

Can your premiums change after the binding period is over?

There aren’t very many scenarios where you’d even be interested in canceling a policy before it starts. Probably the most common scenario is when you select an effective date a month or two in the future and the policy is fully underwritten before the policy takes effect.

If the company finds out that you’ve had a ticket in another state or you’ve had a fender bender that you didn’t think was reported, your final documents will show a higher rate than you were quoted.

You may have felt like your rates on your older policy were too high just to find that the new rates will be even higher.

Always be honest in your application to prevent this.

Can you cancel the policy before it even starts if you find a better deal?

If you were too hasty in your decision to apply to a carrier, you do always have the option to cancel the coverage that you applied for before the effective date.

Any money that you put down while applying for a new policy should be fully refunded to you.

Another advantage of realizing your oversight early on is that you won’t pay a cancellation fee if you’re canceling an application as opposed to canceling an active policy.

Many carriers charge to cancel policies in the middle of the term.

If you’re paying too much for the final rate quote, you might be better off shopping around the market for new quotes. You’re able to get auto insurance quotes by using an online quoting system rather quickly.

Once you get a final rate back, enter all of this information into a quoting tool to get new quotes and see if the rate is really competitive.

Start comparison shopping today by using our FREE online quote tool! Enter your ZIP code below to get the best auto insurance rates!