Can I Switch Insurance Companies in the Middle of a Claim?

Policyholders often consider changing insurance companies, even with an active claim. This raises questions about how such a change affects an ongoing claim and what responsibilities remain with the original insurer. Understanding these complexities helps in making informed decisions about insurance coverage during a claim.

Ability to Change Insurers During a Claim

You can switch insurance companies even with an active claim. However, a new policy only covers incidents occurring after its start date. Any claim related to an incident that happened before the new policy’s effective date remains the responsibility of the insurance company that provided coverage at the time.

The previous insurer must process and resolve claims that occurred under their policy, regardless of whether you renew or switch. Your new insurer will not handle your old claim, nor will your new policy’s limits, deductibles, or coverages apply to a past accident. Switching providers during an ongoing claim can add complexity.

Impact on Your Active Claim

Despite switching, the original insurer remains responsible for processing, investigating, and settling the claim that occurred during their policy period. The claim process continues to unfold with the original insurer, who must see the claim through to its conclusion. This includes investigating the incident, assessing damages, and negotiating settlements.

As a policyholder, you retain certain responsibilities with the original insurer for the ongoing claim. You must continue to cooperate with their adjusters and provide any requested documentation, such as police reports, photos, medical bills, or repair estimates. Promptly reporting any new information or developments related to the claim is important. Failing to cooperate or provide necessary information can complicate the claims process and potentially jeopardize the outcome.

Insurance companies are required to process claims promptly. While specific deadlines vary by state, many states require insurers to acknowledge a claim within 10-15 business days of receiving notice. They must also decide on acceptance or rejection within 15-40 days after receiving all necessary proof of loss forms. Once a settlement is agreed upon, payment is mandated within 30 days. Keep all documentation related to your claim and maintain open communication with your old insurer for a smooth process.

Key Factors to Evaluate

Before switching insurance companies with an active claim, evaluate several factors. Review your current insurance policy’s terms and conditions. Pay close attention to the declarations page, which summarizes coverage limits, deductibles, and the policy period. Understand any specific clauses or endorsements related to claims and cancellations.

Assess the current status of your ongoing claim with your original insurer. Confirm what stage the claim is in, whether it is still under investigation, or if a settlement offer is pending. Maintain clear communication with your previous insurer’s claims department, as they remain the point of contact for the existing claim. You can check the status of your claim online or by contacting their claims center.

When considering a new policy, compare its coverage, premiums, and benefits to ensure it meets your future needs. Be aware that having a recent claim, even if not your fault, may result in higher quotes or fewer options from new insurers. It is important to ensure there is no gap in coverage between your old policy ending and your new one starting to avoid potential legal or financial penalties. Your new insurer will also inquire about your claims history, so transparency is necessary.