Ready to break up with your car insurance provider? Not every provider will let you go easily or cheaply. Avoid surprise fees and a lapse in coverage by canceling your car insurance the right way.
To start the cancellation process, you can call your insurance company or mail in a cancellation letter directly, which you can usually download from the company website. Or if you’re switching to a different policy, your new insurer could possible help you cancel instead. Be prepared with the date you want your insurance to end and the reason for canceling.
Cancellations by phone are usually effective immediately, but ask for confirmation and written notice to prevent any fees or complications in the future. You should also provide a written notice so that you have a record in writing.
Call your insurance company. Let your current insurer know you want to cancel. Otherwise, you might keep getting bills in the mail.
Ask about cancellation requirements. Talk to an agent to find out the right steps. You might also need to mail your written notice in addition to calling.
Ask about fees and refunds. Some companies offer a prorated refund on paid up premiums, and a few will charge a fee for cancelling.
Let your bank know. If you have a car loan, you might need to tell your bank or the owner of your loan that you’re switching policies.
Cancel automatic payments. While your insurer should stop automatic premium withdrawals after your cancellation is processed, you can also cancel payments from your account just to be sure you don’t get hit with any extra charges.
Have your new insurance ready. If you intend to continue driving your car, have your new insurance policy lined up before cancelling in order to avoid a lapse in coverage.
What info do I need to cancel my policy?
Personal info including name, date of birth and Social Insurance number
Your new insurance details including provider, policy number and effective date
Proof of plate forfeiture or bill of sale if you’re getting rid of your car
Can I cancel my policy at any time?
Yes. If you want to cancel your car insurance, an insurer can’t say no. But they can make it difficult to cancel by charging a fee for ending you policy early. Calling is usually the easiest way to find out about the best process and avoid fees.
If your insurer offers prorated premiums, you may also get a cancellation refund for unused portions of your premium. Check with your insurer on how they handle prorated charges.
Will I pay cancellation fees?
It depends on the insurer. You can usually skip the fees by waiting to cancel until your renewal time. Cancellation fees can vary from $25 up to a percentage of your overall premium. Most companies that charge a fee will either bill you a flat amount or a percentage of your remaining premium if you need to cancel before your renewal period is up.
One thing to consider is the cost offset of canceling. Let’s say you’re switching from insurance A to insurance B. Insurance A might charge a cancellation fee. If insurance A charges you $30 but you’ll be saving $10 a month by switching to insurance B, it’s probably worth it financially to go ahead and pay the fee to switch now rather than wait for your renewal period.
What’s the best way to cancel my car insurance?
If you want to cancel your car insurance policy, you have options. With most providers, you can call an agent, send a written notice or cancel in person. Most car insurance companies won’t let you cancel online.
Canceling by phone
The quickest way to cancel your insurance is to call your agent. Most providers recommend this method. If you are canceling because you are getting rid of your car, you might be requested to provide proof of plate forfeiture or a bill of sale. If you plan to get behind the wheel, the agent may ask for your new insurance details, including provider, policy number and effective date. Since auto insurance is a legal contract, you might need to also supply a written notice.
Canceling in person
Some people feel more comfortable with a face-to-face meeting to confirm everything is in order. If this is you, head down to your agent’s office to cancel your policy. Bring all of your information and documentation to prevent any delays.
Canceling by mail
If you hate waiting on hold and have a few weeks before you need your new insurance, canceling by mail might be easiest. Sometimes you’ll still need to mail notice even if you call. Your agent will inform you if they require a signed document to cancel your auto insurance policy.
If you have new insurance lined up, your new provider can usually give you a template letter, often called a cancellation letter or cancel previous insurance letter. You can usually print and sign this form online and mail it to your new insurer. Mail your letter at least two weeks before you intended to cancel, leaving time for shipping and processing. If you don’t use a template letter, include your name, policy number and contact info.
How to write an insurance cancellation letter
If your new insurance company doesn’t have a cancellation letter, include this information in your letter to your old insurer.
Current policy number
Note that you would like to cancel your policy
Reason for canceling
Policy end date
Request for prorated premium reimbursement, if applicable
Signature and date
Can I transfer car insurance policies to another person?
Generally, no. A new person will need to take out their own policy, so they can get their own pricing based on risk.
Can I transfer my policy to another car?
Yes. Many insurers will let you transfer your current policy to another car, although this may vary between insurers, and insurers are free to decline to cover your new car at their discretion.
If you do transfer your policy to another car, you can expect your prices to change accordingly. For example, let’s say you trade in your older Honda Accord for a new Toyota Prius. You might get some discounts for driving a hybrid with new safety features while also adding extra coverage for a newer car, so you’ll probably end up paying more.
Generally insurers want to keep customers, so transferring your policy to another car can be done easily. Simply contact your insurer and ask.
Can I just wait for my policy term to be over?
Yes, you can switch to another provider when your current coverage runs out. Sometimes this may be better to avoid paying cancellation fees. Make sure the date your new policy starts is the day your old policy ends to avoid a lapse in coverage.
But if you’re doing this, you need to know whether or not your policy will automatically renew. If it does, then you may try asking your insurer to simply not renew it, or remember to cancel your policy immediately before the renewal date.
Do I need to cancel my registration too?
Yes, if you’ll no longer be driving your car, you should cancel your registration as well, or transfer registration to the new owner if you’re selling it. Otherwise your provincial service centre could suspend your license for canceling insurance on a car you’re still driving.
How to deal with a pushy agent who won’t let you cancel
When you go to cancel your policy, there’s a good chance that the person you speak to will try to retain you as a customer. Agents are used to customers calling and threatening to cancel in hopes of getting a better deal. If you find that this person won’t take no for an answer, try these tips:
Be prepared. Have any documentation you might need, like confirmation of your new insurance.
Don’t agree to “think about it.” If you really want to cancel your policy, be firm and say so.
Before you speak to an agent, plan what you want to say and write it down. For example, you could say “I would like to cancel my policy” or “Please cancel my policy.”
Firmly repeat what you want each time you are asked more questions or if you want to stay with your provider.
Simply say “No thank you” as many times as it takes.
Write down the agent’s name and the date and time of your call.
If all else fails, ask to speak with a different agent or the agent’s manager.
When’s the best time to cancel or switch car insurance?
Life changes. Life changes like getting married or buying a house are good times to shop around for a new policy. Married drivers and homeowners almost always get a discount. You also may have the opportunity to bundle your homeowner’s and car insurance policies for an even bigger discount.
Finishing your education. Earning a college degree might bring down your insurance premium.
Improving your credit score. Has your credit score improved? This also could be a factor in reducing your premium.
At the end of your policy term. At the end of your policy, take a look at your bill and make sure you’re not overinsured or paying more than you expected.
Should I cancel or adjust my policy?
If you’ve had a bad experience and are no longer happy with your provider, cancelling outright could be the option for you. Or if you are looking to save money, you might be offered new customer discounts at another provider.
However, there are benefits to staying with your provider and adjusting your policy. Most insurance providers offer discounts and different types of policies for different stages of life. Check with your agent to see what discounts and options might be available for you. Even threatening to cancel your policy might prompt the agent to offer you a discount in an effort to retain you as a customer.
If you’re looking to reduce the cost of your current coverage or want to make adjustments, then you will not necessarily need to cancel it first. Depending on what you want to change, an insurer may tell you to cancel your current policy and then take out a new one with different terms.
Some of the things you may be able to change without canceling your policy include:
Your coverage options and extras
Your covered modifications and accessories
Other times, an insurer may be willing to waive your cancellation fee if you’re changing policies but not insurers. For example, if you want to upgrade from third party car insurance to comprehensive car insurance, an insurer may be happy to cancel your current policy and give you a new one without charging any fees.
If you’re looking to switch providers or simply cancel your car insurance policy altogether, you can do so over the phone, in person and by mail. You can cancel any time or at the time of your policy’s renewal to avoid cancellation fees. Make sure you have a new policy in place to avoid a gap in coverage if you plan to keep driving your car.
In most cases, you can switch your policy at any time. But have new insurance in place if you plan on continuing to drive your car.
In most cases, yes. But don’t assume that is the case. Check with your new provider to be sure.
When you cancel your policy or become aware you’re still being charged for your policy, turn off autopay. Then call again to cancel your policy. Escalate until you receive proof of cancellation, such as an email confirmation or your account shows inactive in your account dashboard. Get the names of everyone you talk to for future reference in case it happens again.
Your car insurance rates could increase for different reasons. If you’ve had a claim recently, that can cause your rate to increase. Or if you’ve had a traffic violation you might see an increase. And, unfortunately, your rate can sometimes go up due to no fault of your own.
Experts recommend shopping around for a better rate at least once a year.
You can cancel your car insurance policy at any time, even if you have an open claim.
Andrew Munro is the cryptocurrency editor at Finder. He was initially writing about insurance, when he accidentally fell in love with digital currency and distributed ledger technology (aka “the blockchain”). Andrew has a Bachelor of Arts from the University of New South Wales, and has written guides about everything from industrial pigments to cosmetic surgery.
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