Don’t pay more to cancel your car insurance. Find out how to cancel the right way.
Are you wondering if it’s time to break up with your car insurer?
After having a bad experience with your car insurance provider over a claim or billing issue, you might be thinking of switching car insurance to a new company. But not every provider will let you go easily.
Here’s everything you need to know before canceling your car insurance to avoid surprise fees and a lapse in coverage.
Cancellation guides by provider
Each car insurance company has slightly different requirements, fees and processes for canceling your policy. Check out comprehensive guides for canceling your insurance from these popular providers.
Can I cancel my policy at any time?
Yes. If you want to cancel your car insurance, an insurer can’t say no. Contact your insurer and tell them you want to cancel your policy. Find their details online and send a letter, fax or email outlining your intention. If you’re not sure what the best option is, call your insurer first and ask. You might also need to provide a written notice, depending on your state’s laws.
Cancellations via phone are usually effective immediately, but ask for confirmation and written notice to prevent any fees or complications in the future.
What do I need to cancel my policy?
Have your documentation ready when you speak to an agent. You might be asked for information including:
- Policy number
- Personal info including name, date of birth and Social Security 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
How can I cancel my policy?
- Notify your insurance company. Let your current insurer know you want to cancel. Otherwise, you might keep getting bills in the mail, which if left unpaid could cause future insurance rates to spike.
- Follow up with 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. Most states require car insurance providers to report cancellation to the DMV. If you intend to continue driving your car, have your new insurance lined up before cancelling in order to avoid a lapse in coverage.
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, depending on the laws and regulations in your state.
Canceling by mail
Your agent will inform you if they require a signed document to cancel your auto insurance policy. If you choose to request cancellation through the mail, mail your letter at least two weeks before you intended to cancel, leaving time for shipping and processing. And be sure to include your name, policy number and contact info.
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.
Will I pay any cancellation fees?
It depends on the insurer. There may be some cancellation 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.
Cancellation fees can vary from $25 up to a percentage of your overall premium. Most companies that charge a fee will either bill you for $50 or 10% of your remaining premium if you need to cancel before your renewal period is up.
The good news is, fees are usually not charged for cancellation, especially for the major providers.
When would I not be able to cancel my policy?
There are no situations where you cannot cancel your policy. If you want to cancel your coverage, an insurer cannot say no.
However, canceling your policy doesn’t necessarily get you off the hook for any payments you owe to an insurer, and will not necessarily entitle you to any refund.
What are the consequences of canceling a policy early?
The main downside of canceling a policy early, other than losing your coverage, is that you may not be getting everything you paid for and may need to pay additional cancellation fees.
But there are still valid reasons for doing so. You may consider canceling your coverage if:
- You only want short term car insurance (cover for less than a year).
- You’re switching car insurance.
- You’re selling, gifting or trading in the car, moving overseas or don’t need to maintain your current car insurance.
One thing to consider is the cost offset of canceling. Let’s say you’re switching from GMAC to Geico. GMAC might charge a cancellation fee, depending on the state. If GMAC charges you $30 but you’ll be saving $10 a month by switching to Geico, it’s probably worth it financially to go ahead and pay the fee to switch now rather than wait for your renewal period.
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 to lapse?
Yes, you can switch to another provider when your current coverage runs out. Sometimes this may be better to avoid paying cancellation fees.
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.
What are the alternatives to canceling my coverage?
If you want to switch car insurance, change your type of coverage or otherwise discontinue your policy, then canceling is probably the way to go.
However, 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 deductibles
- Your vehicle
- 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.
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.
Ready to cancel? Compare car insurance quotes
|Company||Average annual rate||Learn more|
|21st Century||$1,701||Read review|
|State Farm||$2,474||Read review|
|The Hartford||$2,529||Read review|
|Liberty Mutual||$2,611||Read review|
|Average||$1,910||Compare all reviews|
When is 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.
- Education. Earning a college degree might bring down your insurance premium.
- Credit score. Has your credit score improved? This also could be a factor in reducing your premium.
Why should I cancel my car insurance?
- Dissatisfaction. If you are unhappy with your current provider and can’t get a resolution, it might be time to switch car insurance providers.
- Moving. If you are moving to a part of the country where your current provider doesn’t offer coverage, you’ll need to find a new provider and then cancel your insurance.
- Sold your car. You should cancel your policy when you sell your car and don’t plan on buying a new one.
- Better policy. Experts recommend shopping around for a new policy annually. You might find better savings with another provider.
How to cancel: an easy checklist
- Have new car insurance in place if you will continue driving your vehicle.
- Gather all of the needed information and documentation, including policy number, your personal information and new policy info or proof of the sale of your car.
- Contact your car insurance agent and let them know the date that you would like your policy to end.
- Request a refund if you have any unused days or months.
- Inform the lien holder of your car and the DMV that you are canceling (or switching) your car insurance. Some providers will automatically do this on your behalf. Check with your provider.
- Confirm with your provider that your insurance has been cancelled, along with cancelling any automated payments to the provider.
- Check your online account after you’ve received confirmation to make sure your policy is officially cancelled.
How to deal with a pushy insurance agent
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. 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, don’t be wishy-washy, be firm and say so.
- Before you speak to an agent, plan what you want to say and write it down. Firmly repeat this each time you are asked to stay on with your provider. For example, you could say “I would like to cancel my policy” or “Please cancel my policy.”
- 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.
If you’re looking to switch providers or cancel your car policy, you do have options for canceling your car insurance. Talk to your provider about cancellation fees and the best process to cancel.
Compare car insurance alternatives and see how much you could save by switching.