Reasons people cancel car insurance

Drivers break ties with their car insurers for many reasons. But satisfaction with claims and customer service are low on that list. In fact, the most common reasons are financial.

Why do people cancel car insurance policies?

Of all the reasons for people to nix their policies, cost was voted the most common by nearly 69% of Finder readers who responded to a recent poll.

Another top cause involved 9% of people having problems with their insurer’s billing. Some of these readers included comments that they canceled because they wanted to switch the payment date or stop automatic payments, options not available with every insurer.

Put together, cost and billing issues account for an overwhelming 78% of those who left a provider behind. Responses show that car owners are conscious of their budgets and don’t like paying more than needed for coverage.

Top reasons drivers cancel car insurance

Breakdown of reasons to look elsewhere for coverage

While cost is the top reason for cancellations (about 69% of responders), some people end their policies for other motives. Problems with claims is the least common reason reported in our survey, at just under 2%. Coverage and customer service are neck and neck at 5% each.

In addition, about 10% of survey participants canceled their car insurance for other reasons. Of those, 20% say they switched policies instead of outright canceling. Some 44% sold their cars, and 9% say they don’t need their car, mostly because they no longer drive. In addition, another 11% canceled coverage on a car that wasn’t working.

Other reasons people cancel car insurance

How much can you save by switching?

You may save an average of $500 a year by switching to a cheaper car insurance company. That’s a lot of change, given Americans pay an average insurance rate of $1,300 a year, with premiums swinging from $600 to $4,700 annually, depending on where you drive, your driving record and other factors.

Bottom line

It’s no surprise that drivers cancel car insurance to meet their budget’s bottom line, especially if they feel they’re overpaying or are on the end of billing problems with their insurer. With so many insurers vying for your business, look into switching to another provider, which could save you hundreds of dollars a year.

Methodology

Finder added a voluntary poll from April 2018 to June 2019 on 16 pages that related to policy cancellations. Our team categorized the more than 6,000 anonymous responses based on the choices selected or other reasons described by the respondent.