If you find a better deal with another insurer or are selling your car, you can cancel your car insurance policy to take advantage of insurance savings. However, avoid surprise cancellation fees by checking your insurer’s cancellation policy, and consider the cost benefit of switching companies if your current insurer does charge a fee.
How do I cancel my car insurance?
In many cases, you can cancel your car insurance in just a few minutes with a phone call or written notice of your cancellation. But be ready with your next steps, like having another insurance policy in place before canceling.
Contact your insurance company.Let your current insurer know that you want to cancel, or your new insurer may help you cancel if you’re switching companies. Be prepared with the date you want your insurance to end and the reason for canceling.
Ask about fees and refunds.Some companies offer a prorated refund on premiums if you paid in full or cancel just after making your payment. But a few insurers charge a fee for canceling.
Submit cancellation forms.You might need to mail or email your written notice or a cancellation form. You usually can download the form from your insurance company’s website.
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 insurers to report your cancellation to the DMV. If you intend to continue driving, have your new insurance lined up before canceling to avoid a gap in coverage.
Get confirmation.Cancellations by phone are usually effective immediately, but ask for confirmation and written notice to prevent any fees or complications with your car insurance.
What info do I need to cancel my insurance?
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 to cancel your car insurance by company
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.
Yes, most insurers allow you to cancel your policy at any time. Just be sure to call your insurer to find out its cancellation policy including any requirements, like sending a written notice with the effective date of cancellation. This is also a good time to ask if you’re eligible for any prorated refunds for canceling early.
And, if you’re planning to keep and drive your car, you’ll want your new insurance policy in place before canceling your current car insurance. If you cancel without setting up a new policy, you could have a gap in your car insurance coverage, which can put you in a high-risk category.
Can I wait for my policy term to end?
Yes, you can switch to another insurer once your current coverage ends. 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.
Will I pay a cancellation fee?
You usually won’t pay a cancellation fee when canceling your car insurance, but it depends on the insurer. If there is a cancellation fee it can vary from $25 to $50 up to a percentage of the remaining premiums left.
Most companies that charge a fee bill you for $50 or 10% of your remaining premium if you need to cancel before your renewal. You can skip the fees by waiting to cancel until renewal time.
Car insurance cancellation fees
Company
Cancellation fee
AAA
$0
Allstate
$0
American Family
$0
Farmers
$0
Geico
$0
Liberty Mutual
$0
Mercury
10% of remaining premium
Nationwide
$0
Safeco
$0
State Farm
$0
The General
10% of remaining premium
The Hartford
$0
Travelers
$0
USAA
$0
What’s the best way to cancel my car insurance?
If you want to cancel your car insurance policy, you have options. With most insurers, you can call an agent, send a written notice or cancel in person. Most car insurance companies won’t let you cancel online.
Phone. This is the quickest way to cancel your insurance. If you’re selling your car, you might need proof of plate forfeiture or a bill of sale. If you plan to keep driving, the agent may ask for your new insurance details, especially if you’re getting a refund for prepaid premiums.
In person. If you’re more comfortable with a face-to-face meeting, you can head to your agent’s office to cancel your policy. Bring any documentation about your new insurance or car sale to prevent delays.
By mail or email. If you need to send a written notification, you can typically print and sign this form online and mail it to your previous insurer.
Get help from your new company. Some insurers offer assistance with canceling your previous insurance policy when you switch to their policy. Your new company may handle the entire process or offer you a template letter that you can send to your insurer.
How to write a car insurance cancellation letter
If you have new insurance lined up, your new insurer may give you a template letter, often called a cancellation letter or cancel previous insurance letter. If your new company doesn’t have a boilerplate cancellation letter, include this information in your letter to your old insurer.
Name
Address
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 my insurance to a new car?
Yes. Many insurers 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. Generally, insurers want to keep customers, so transferring your policy to another car can be done easily. Simply contact your insurer and ask.
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.
Do I need to cancel my car registration?
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 state DMV could suspend your license for canceling insurance on a car that you’re still driving.
When should I cancel or switch car insurance?
If you’ve had a bad experience or are looking for a lower car insurance premium or discounts, canceling outright could be the right option for you. You might want to cancel your current policy after:
Life changes. If you get married, buy a house or experience other changes in your life, you may want to shop around for a new policy. Married drivers and homeowners almost always get a discount. You also have the opportunity to bundle your homeowner’s and car insurance 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.
Selling your car or getting a new car. Since your car’s make and model significantly affects your rates, consider which insurance company offers the best coverage and premium if you downsize cars or buy another car.
Can I negotiate a lower premium with my current insurer?
Yes. You could get quotes from several car insurance companies and negotiate your premium with your current insurer. Most insurance companies offer discounts and different types of policies for different stages of life, so check with your agent to see what discounts or options you qualify for.
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. What you could change without canceling your policy:
Optional coverage
Deductibles
The modifications and accessories covered
What to consider before canceling your car insurance
While canceling car insurance is easy, it may put you in a high-risk pool if you don’t have a new policy lined up. Being considered a high-risk driver means you’ll pay higher rates in the future. Before canceling your car insurance entirely, consider the effects of:
Offsetting the cancellation fees. Let’s say you’re switching from GMAC to Geico. If GMAC charges you $30 to cancel but you’ll save $10 a month by switching to Geico, it’s probably worth the fee to switch your policy now, rather than wait for your renewal period.
Stopping payment. If you simply stop paying your premium, you could be tagged with cancellation fees, lose the good payer discount with your new insurer and even lower your credit score. A lower credit score can affect your premium with your new insurer until you raise your score again.
Getting in a car accident with an at-fault driver. If the other driver is at fault and you don’t have car insurance, you could file a claim with the other driver’s insurer. However, no-pay, no-play states like California or Missouri limit you from suing for certain types of damages, like physical pain.
Legal penalties. Even if you aren’t in a car accident, if you’re caught driving without car insurance in a state that requires a minimum level of car insurance, you could face serious penalties, such as license suspension or revocation, fines and even jail time. In some states, if you’re ticketed for driving without car insurance, you may be required to file an SR-22, which means paying more for your policy.
Getting marked as a high-risk driver. A gap in coverage on your record qualifies you as a high-risk driver, and this means you’ll likely pay higher rates when you purchase car insurance again.
If you regret canceling your car insurance policy, some companies allow you a full 24 to 48 hours to have it fully reinstated without any consequences. Other insurers, like Progressive, require you to have your policy reinstated within the same day of canceling.
If you’ve passed the timeframe allowed for reinstatement, you’ll either be required to have your policy fully re-written with your current car insurance company or shop around for a new car insurance policy. To avoid a lapse of coverage, get your new policy started as soon as possible, or ask for your policy to be backdated to the day you lost coverage.
If you’re looking to switch insurers or cancel your car policy, you have options for canceling your car insurance. Talk to your insurer about cancellation fees and the best process to cancel.
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 was the global cryptocurrency editor at Finder, covering all aspects of cryptocurrency and the blockchain. Andrew has a Bachelor of Arts from the University of New South Wales.
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