There are several reasons why you may want to cancel your auto insurance. Maybe you found a better rate with another company. After a few years, you finally paid off your car and are no longer required to carry insurance on it. Or perhaps you’ve decided to be more environmentally responsible, and have sold your vehicle in favor of riding a bicycle.
Whatever your reason, there is a process to canceling your insurance that will ensure it’s done quickly, that things go smoothly, and that you won’t get charged for something you’re not using anymore.
When is the best time to cancel insurance? That might be the least of your problems, or it could be a major deciding factor. Any standard auto insurance policy contains a provision allowing you to cancel at any time. But before you cancel in the middle of a policy period, ask your auto insurance company about their cancellation policy.
Once you understand how to cancel car insurance coverage, enter your zip code to compare online auto insurance quotes and get the new policy you need! With your company, can you cancel your car insurance policy at any time?
Different companies may charge you a fee to cancel early. If they do, find out when you can safely cancel your policy without coverage lapsing, and without paying the fee. It might make sense to wait. Canceling auto insurance early is not something you should do without doing a little research first!
Have a Replacement Policy in Place
If you’re switching to another insurance company to get cheaper auto insurance—or better service—it’s important to avoid a gap in coverage. Any period of time during which you were supposed to have auto insurance and didn’t can result in higher rates. Talk to your new insurance company, and ask them for the effective date of your new coverage. You’ll need this date when you cancel your old policy.
Call Your Current Carrier
Speak to an agent and notify them of your intent to cancel, and that you will be following up with a letter. They may ask why you’re canceling, and they will almost certainly try to get you to change your mind. Be prepared for this before you call.
Draft an Insurance Cancellation Letter
Your current insurance company should be informed of your intent in writing with an auto insurance cancellation letter. Companies have different cancellation policies, and for some, a phone call isn’t enough to cancel an insurance policy. Some companies may require you to fill out a form they provide, but in most cases, writing an insurance cancellation letter will suffice.
Even if the company says you can cancel over the phone, it’s a good idea to have it in writing in case there are any billing errors later on. The letter doesn’t need to be complicated or long. It simply needs to state that you wish to cancel your policy, and the effective date of your new coverage.
If you’re canceling a policy because you’ve paid off the vehicle, mention this in the letter. Otherwise, you don’t really need to explain why you’re canceling, unless it’s because you received substandard service and you want the company to know about it.
Be sure to include your policy number along with your contact information, and sign the letter. Some insurance companies will even provide you with a pre-written letter to send to your former carrier. Ask about it when setting up your new policy.
If you’re canceling car insurance coverage altogether, and not switching to a different company, it’s still a good idea to do it in writing. Providing your insurance company with a cancellation letter will help ensure they no longer bill you. This auto insurance cancellation notice is not only courteous, but it protects you too!
Get Your Money Back
Many people pay their insurance premiums on a monthly basis, but paying in full is an option. If you paid for the entire policy period in advance, and you cancel before the policy period ends, you are due a refund. Ask the customer service representative about this when you call to cancel, and mention it in your insurance cancellation letter.
Notify Your Lienholder
If you’re still making payments on your car, you are most likely required to maintain full coverage on your vehicle until it’s either paid off, or you sell it. Once the car is paid for, you may need to ask for an auto insurance cancellation form.
The bank may also have certain requirements about the amount of your deductible. Keep the bank informed when canceling insurance, and make sure the new coverage meets the lienholder’s requirements.
Notify the DMV
Some states require that you inform the Department of Motor Vehicles (DMV) when canceling your auto insurance. Check your state’s DMV guidelines, or ask your agent when setting up your new policy, and they should be able to help you.
Now that you know how to cancel auto insurance from any company, make sure you don’t leave a gap in your coverage. Get free online auto insurance quotes by typing your zip code into the rate box now!