How to cancel car insurance

How to cancel auto insurance

Follow these steps to cancel your car insurance policy:

Get your new auto insurance ready. If you're switching companies, you should have your new policy ready to go before initiating the cancellation process. Ensure that the start date is on or before the day you plan to cancel.
Contact your car insurance provider and inform them that you plan to cancel. In most cases, you can do this over the phone. If you have an insurance agent, you can visit them in person. A few companies may allow cancellation online, but it's best to reach out first to find out what the company's procedures are. Be prepared to provide your policy number and other identifying details.
Ask about a refund. Find out what is owed back to you, if anything, and how it will be refunded.
Complete any required documentation. In most cases, you don't need to document anything, but some companies do ask for something in writing.
Confirm the cancellation date. It's important to know when your coverage will end so you can avoid a lapse in coverage.

If you are switching to a new company, it may be able to handle the cancellation on your behalf.

"When we switch one of our clients to a new carrierAn insurance carrier is the company that provides your car insurance policy and pays claims., we always have them sign a handle form for the old carrier so that we can cancel their old policy in the most formal way possible, to avoid any issues," says Peter Conte, a licensed insurance broker at Honig Conte Porrino Insurance Agency in New York.

Conte recommends emailing the insurance company if you're canceling on your own. He prefers that form of written notice to texts and phone calls.

"I believe it’s best that you do notify your carrier or agent via email so that there is a paper trail," Conte says.

If you send written notice, include the following:

Your full name
The policy number
The date the cancellation should be effective
The address to which you would like any refund due sent

Can a car insurance company charge a cancellation fee?

Car insurance providers don’t generally charge penalties for switching to a new car insurance policy with a different company. Still, some insurers may charge a car insurance cancellation fee, which varies.

Your policy may also be short-rated if you cancel in the middle of the term. When this happens, the insurance company retains a percentage of the potential refund to compensate for the administrative costs involved in an early cancellation.

Insurance is regulated differently in every state, and companies' policies differ. Make sure you’re aware of any penalties before you cancel.

If you are selling your car, you don’t need to get new coverage; if you still own it, make sure you have a new policy before you cancel.

PEOPLE ASK

Can I cancel my insurance policy and get my money back?

If you have paid insurance premiums in advance, you will get a refund for any unused amount when you cancel. If you’re paying monthly, there may be little to no refund.

Shopping for car insurance before you cancel

You’re required by law in nearly every state to keep an active insurance policy on your car. If you cancel your insurance, it will be reported to the DMV, and you could face penalties that include license suspension and fines.

Additionally, if you have a loan or lease, you’re required by the agreement to keep full coverage car insurance in force.

If you’re planning to switch insurance companies, you need to have that new policy ready to go before you cancel the old one. That way, you’ll avoid a lapseWhen your auto insurance coverage ends because you missed a payment or did not renew it on time. A lapse in auto insurance coverage may result in paying higher premiums for a new policy. in coverage that could lead to serious penalties.

Can you cancel car insurance anytime?

You can cancel your auto insurance policy whenever you want to. However, as mentioned above, your refund may be short-rated if you cancel in the middle of the term. To avoid, this you may want to switch when your policy is renewing. You'll have to inform the insurance provider that you don't plan to renew the policy.

When should you cancel your car insurance?

When to cancel your auto insurance depends on the reason for the cancellation.

You've sold the car. In this case, cancel your insurance as soon as you have transferred ownership of the car. If you wait, you could find yourself responsible if the new owners is involved in an accident.
You're switching insurance companies. If you're switching to a different insurance provider, you should cancel your policy no sooner than the effective date of the new policy. It's a good idea to wait an extra day to be safe.
You no longer drive and don't own a car. If you're no longer driving, don't have a license and don't have a car you can cancel your policy. However, if you still own a car, you are legally required to insure it; if someone else is driving for you, change your policy to make them the primary driver.

PEOPLE ASK

Do I have to cancel my car insurance if I sell my car?

Yes. Once you sell a car you no longer have an insurable interest in it - that means you have no financial stake. Cancel your insurance quickly to avoid liability for something the new owner does.

When should you not cancel your car insurance?

There are several situations in which you should not cancel your car insurance:

You're storing it for a while. Even if your car is in storage, you're still legally required to insure it. In some states, you can put a car in storage by registering it as non-operational and then drop liability coverage. However, if you have no insurance, there will be no coverage for damage to the car while it's stored. Consider carrying at least comprehensive coverage.
You're not driving, but someone else is. Even if it's not you driving your car, if you own it and someone else is driving it, you're responsible for insuring it.
Your driver's license is suspended. If you own a car, you legally have to insure it, even with a suspended license. Furthermore, cancelling could mean that you will pay more for insurance coverage when your license is reinstated due to a lapse in coverage, so it's important to maintain coverage.
You don't have new insurance yet. Don't cancel your existing policy until you're sure you have a new policy to replace it.

How to cancel car insurance: Frequently asked questions

Can I take insurance off my car if I'm not driving it?

No. As long as you own the car, you legally have to insure it. You may be able to register it as non-operational and cancel the insurance, but state laws vary.