Can You Change Your Insurance Policy Midterm? 

Q&A with CIA’s Agency Manager Chris Walton 

Many people assume they must wait until their insurance policy renews before making any changes. But in reality, homeowners and drivers often have more flexibility than they think. 

To clarify how midterm policy changes work, we spoke with Chris Walton, agency manager at Cornerstone Insurance Agency LLC, who explains when you can switch insurance, potential fees, and how to avoid gaps in coverage. 

Can I change my insurance policy in the middle of its term? 

Chris: Yes, in most cases you can change your insurance policy midterm.  

This typically applies to policies such as: 

• Homeowners insurance 

• Renters insurance 

• Auto insurance 

• Umbrella insurance 

However, there may be some carrier-specific conditions or restrictions that your agent will need to review before making changes. 

Because policies and companies differ, it’s always a good idea to consult with your insurance agent first before making any adjustments. 

Will I face penalties if I cancel my midterm policy? 

Chris: Most of the time, no. 

Many standard insurance carriers allow you to cancel your policy without penalties. However, some carriers, particularly those in the excess and surplus market, may charge a cancellation fee. 

These carriers are often used in higher-risk areas, such as states like: 

• Florida 

• Texas 

• California 

In these cases, a carrier may charge a fee, often around $200 if the policy is canceled within the first 90 days. 

Since policies can vary, it’s always best to review your policy documents or speak with your agent to understand any possible fees. 

How does changing insurance midterm affect my coverage? 

Chris:  When switching insurance policies midterm, it’s important to ensure your coverage remains consistent or improves. 

Most of the time, agents recommend keeping at least the same coverage levels, including: 

• Bodily injury liability limits 

• Deductibles 

• Property damage coverage 

In some situations, it may even make sense to increase coverage, especially if your financial situation has changed or you want to protect additional assets. 

For example, adding an umbrella policy can help provide extra liability protection for your savings and other assets. 

Do I get a refund for unused premiums if I switch policies? 

Chris: Yes. If you cancel a policy midterm, you typically receive a refund for the unused portion of your premium, known as the unearned premium. 

For example, if your auto insurance costs $100 per month and you cancel halfway through the month, you may receive roughly $50 back, depending on how the carrier calculates the refund. 

This same concept generally applies to: 

• Auto insurance 

• Homeowners insurance 

• Umbrella insurance 

Can I switch to a different insurance company in the midterm? 

Chris: Yes, you can usually switch insurance carrier’s midterm without any issues for most types of personal insurance. 

This includes: 

• Home insurance 

• Auto insurance 

• Umbrella insurance 

However, there are some exceptions. 

Flood Insurance 

Flood insurance policies, especially those through the National Flood Insurance Program (NFIP), typically cannot be canceled midterm, even if your property has been rezoned into a different flood zone. 

In most cases, you must maintain the policy until renewal, at which point you can explore other options. 

Life Insurance 

Life insurance is another category where switching policies require extra consideration. Depending on the policy type and carrier, it may be possible to move funds into a new policy through something called a 1035 exchange, which allows certain tax-advantaged transfers. 

Does changing insurance midterm affect my claims history? 

Chris: No. Switching insurance companies does not affect your claims history. 

Your claims history follows you regardless of the carrier and is typically recorded in industry databases used by insurance companies. 

However, switching carriers frequently may affect your insurance rating. Many insurers consider how long you have stayed with previous companies when determining your rates. 

For example: 

• Someone who has stayed with the same insurer for five years may receive better pricing. 

• Someone who switches carriers every six months may see fewer discounts. 

Is it possible to upgrade or downgrade coverage midterm? 

Chris: Yes. You can usually adjust your coverage at any time during your policy term. 

For example, you may decide to: 

• Increase your deductible to lower your premium 

• Decrease your deductible for more protection 

• Increase liability limits 

• Add additional coverage 

Before making changes, it’s important to understand both the financial impact on your premium and how the change affects your protection in the event of a claim. 

Your insurance agent can help explain those differences, so you can make an informed decision. 

How can I avoid gaps in coverage when switching insurance? 

Chris: Avoiding gaps in coverage is extremely important when switching policies. 

One of the most important rules is to never cancel your existing policy until your new policy is fully active. 

I recommend confirming you have the following before canceling your current policy: 

• Your new insurance ID cards (for auto policies) 

• Your policy declarations page for homeowners’ insurance 

• Any umbrella policy documentation 

Once you have those documents and your new policy is active, you can safely cancel the old one. 

Are there restrictions on changing insurance during high-risk periods? 

Chris: Yes, sometimes. 

During high-risk weather events, such as hurricanes or wildfires, insurance companies may place temporary restrictions called moratoriums. 

A moratorium means the carrier will temporarily pause issuing new policies until the risk event passes. 

For example, during an approaching hurricane, insurers may stop issuing new policies for several days or until the storm threat has cleared. 

Who should I contact first if I want to change my policy midterm? 

Chris: Your insurance agent should always be your first point of contact. 

Your agent can: 

• Review your current policy 

• Compare options across multiple carriers 

• Find better coverage or pricing 

• Help manage the transition between policies 

Most importantly, your agent will help ensure that there are no gaps in coverage during the switch. 

Thinking about changing your insurance policy? 

Our team can review your current coverage, compare options, and help you determine whether switching carriers makes sense for you. 

Contact our agents at Cornerstone Insurance Agency today to explore your options and make sure you’re getting the coverage you need at the best possible rate. 

This article is for informational purposes only. You should not act based on this information without first consulting with your insurance agent; if you would like a quote from a Cornerstone Insurance Agency licensed agent, contact us. We disclaim all liability for actions taken or not taken by you based on the contents of this article which is provided “as is.” Cornerstone makes no representation that this content is error-free.