How to Cancel Auto Insurance (Everything You Need to Know)
Knowing how to cancel auto insurance ensures a smooth transition and helps you to avoid fees. You can cancel auto insurance at any time, but you may not receive a full refund, or insurers may charge you a penalty if you cancel mid-term. You must have a new auto insurance policy lined up before canceling your old policy because a lapse in auto insurance coverage raises your rates. Driving without insurance is also illegal in most states.
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UPDATED: Oct 12, 2021
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- Most companies don’t charge any auto insurance cancellation fees, but some do
- You can cancel auto insurance coverage at any time
- Calling your insurance agent or the company directly is the easiest way to get started canceling your car insurance coverage
Whether it’s because your auto insurance coverage is too expensive, or for any other reason, you will likely need to cancel an auto insurance policy at some point. Knowing when to cancel and how to cancel auto insurance can be confusing.
We’ll cover all of the details of how to cancel your auto insurance, as well as answer all of your questions about the process, refunds, switching companies, and more.
If you’ll need continued coverage but aren’t sure if you should cancel your current policy, at the very least, you should compare quotes to find cheap car insurance rates. You can do that right here for free.
If you know how to cancel auto insurance and need a quote for another policy, enter your ZIP code in the free comparison tool above.
How To Cancel Auto Insurance
How do I cancel my general auto insurance policy? And is it bad to cancel car insurance?
Your reason to cancel insurance is the biggest factor in determining if it’s a good idea. Just remember this key point: If you plan to drive, you need insurance.
Typically, you can cancel your auto insurance policy at any time. If you cancel your car insurance policy early, you may have to pay a cancellation fee.
You may be eligible for a refund if you have prepaid for your policy.
There are several reasons why you may want to cancel your auto insurance. Among them may include finding a more affordable auto insurance rate with another company.
Whatever your reason, there’s a process to canceling your insurance that will ensure it’s done quickly and smoothly and that you won’t get charged for something you’re not using anymore.
Make sure to ask your insurance company about their cancellation policy and any fees or penalties associated with the cancellation.
Can you cancel your auto insurance policy online?
In most cases, you can’t cancel online. Insurance websites often direct the customer to call an agent or representative. Although many policy changes can be made online, cancellation requires that you speak to someone to make sure it’s not an error.
Can you cancel your auto insurance at any time?
Can you cancel an auto policy at any time? The answer is yes.
Can insurance companies charge a cancellation fee? They can, and sometimes they will. You’ll need to check and decide if it’s worth it.
If your company charges a percentage of unused rates, you’ll want to consider that wasted cost and decide if you’re better off waiting until renewal to cancel coverage.
Do you have to explain why you’re canceling your auto insurance early?
Not only do you have the right to cancel your coverage mid-policy, but you also have the right to cancel your insurance for any reason.
You don’t have to sell your car during the term, surrender your license, or surrender your tags just to terminate your contract.
You also don’t have to give your insurer an explanation if you don’t want to.
How do you cancel auto insurance with your company?
Looking to cancel with some of the major auto insurance companies in search of cheap rates? Here’s how:
- How to cancel USAA auto insurance – Simply log in to your USAA account and cancel from there. Or, you can contact a representative directly at 1-800-531-8722. USAA permits the cancelation of insurance at any time.
- How to cancel GEICO auto insurance – Contact GEICO to cancel a policy by calling an agent at 1-800-841-1587. You may first have to select your reason for calling via interactive voice service.
- How to cancel auto insurance with Progressive – While you cannot cancel online at this time, you are able to do so via phone. Contact a representative 1-866-416-2003.While you cannot cancel online at this time, you are able to do so via phone. Contact a representative at 1-866-416-2003.
- How to cancel State Farm auto insurance – Call 1-800-782-8332 to speak with your local agent. When canceling a policy, provide your policy number, name, and birthdate.
- How to cancel Allstate auto insurance – Call your agent. You possibly may be requested to cancel your policy in writing.
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Steps to Canceling Auto Insurance Coverage
We’ll give you a list of all the possible ways to cancel insurance, but let’s make this simple.
Call your agent! There are other valid options, but we’ll start with this one because, in most cases, it’s the easiest and best.
You may be asked for your name, address, and possibly your social security number, but those are things you probably don’t need to prepare. You’ll need the following information to dig up so you can supply it, no matter which route you take.
- Current policy number
- New policy number
- If you’re canceling outright and not switching companies, be prepared to show proof that you won’t be driving:
- Bill of sale
- Proof of relinquishment of plates
Be prepared to sign a form with the requested cancellation date listed and mail or fax it to your current insurer. Your agent will tell you exactly what to do.
How do you request an auto insurance cancellation?
Your insurer doesn’t get notified when your car is sold. This is why you need to cancel your coverage either over the phone or in writing. Be sure to give the date of sale and provide proof of your bill of sale so that you can get a refund for the rates you’ve already paid.
If you’ve already canceled your coverage and you are buying a new car, it’s time to start looking for a new policy. To get the best rates, be sure to shop around. One of the most effective ways to do this is to use an online comparison tool to give you instant quotes.
If your car is leased or financed, the lienholder will almost always require that you carry full coverage. Since your lienholder’s name will be on your insurance policy, your new insurer will probably inform them of your coverage, but confirm to be sure.
What you don’t want is for your lienholder to think you are uninsured and secure an expensive force-placed policy.
If you want to know how to cancel, start with this:
When should you contact your current auto insurance company?
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 possibility before you call.
Ask what the cancellation policy is and tell them when you’d like to stop coverage. Remember, you want to stop it on the same day you start your new coverage.
Calling on the phone would be the quickest and most direct way, and by having a conversation, you may find out that there are discounts that could be applied to your coverage that may lower your rate enough for you to stay with that company.
Here’s the contact information for most of the largest insurance companies.
|Property & Casualty Insurance Co. of Hartford||800-429-4545||www.thehartford.com|
|State Farm||Agents Listed||www.statefarm.com|
Going in person is a valid option. It’s just about as simple as picking up the phone. Sometimes it’s clearer to talk to someone in person, so if you’re feeling confused, this may be the best option for you.
And like with a phone conversation, if you talk to your agent, they may be able to find more discounts or ways you can save.
How do you draft an auto 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 writing an insurance cancellation letter will suffice in most cases.
Even if the company says you can cancel over the phone, it’s a good idea to have it in writing if 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 include your new coverage’s effective date.
Be sure to include your policy number along with your contact information, and sign the letter.
If you’re canceling auto 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 and put you in compliance with auto insurance cancellation laws.
There are many cancellation form letters available online. You can simply print one out, fill it in, and mail or fax it to your insurer.
The problem with this method is that you won’t find out if you’re eligible for your old insurer’s discounts. Learn how to write a cancellation letter for auto insurance.
Should you let your new auto insurance company take care of it?
You can fill out a cancellation form, sign it, and ask your new agency to fax it to your old agency.
This option will probably work if you’re dealing with a brick-and-mortar agency. It won’t be feasible if you’re working with an online-only auto insurance company.
Root car insurance (an app-based insurance company), among others, advertise that they’ll cancel your old policy for you when you switch to them. Now THAT makes things easy.
Next, we’ll sum it all up for you. Make sure you don’t miss a step when you’re canceling auto insurance.
What is a cancellation checklist for auto insurance?
Below you’ll find a simple checklist featuring the most important things to do when canceling insurance:
- Get your new insurance in place (if continuing to drive is the plan)
- Collect the information you’ll need to cancel
- policy number
- new insurance information including the start date (if you’re switching providers)
- proof you won’t be driving (if that’s the case)
- Contact your current insurance agency and tell them you’re planning to cancel coverage on the date you start coverage with your new company
- Ask your new insurer if they will contact your lienholder (if your car is financed or leased); if they won’t, you’ll need to
- Confirm that your policy is canceled on the date expected
But can you cancel if you make monthly payments? Read on to find out.
Should you have a replacement auto insurance 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 time 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 data when you cancel your old policy.
Can you get your money back when you cancel auto insurance?
Many people pay their insurance rates monthly, but paying in full is an option. If you paid for the entire policy period in advance and 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.
When do you notify your lienholder of the change to your auto insurance?
If you’re still making payments on your car, you’re most likely required to maintain full coverage on your vehicle until it’s 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.
Do you need to notify the DMV if you cancel your auto insurance?
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.
Can I cancel auto insurance if I pay monthly?
You can cancel your auto insurance at any point and for any reason. It doesn’t matter how frequently you pay or how long you’ve had your coverage.
As the policyholder, it’s your right to cancel your auto insurance at any point and for any reason.
Your right to cancel your auto insurance policy does not depend on how frequently you pay for insurance or on how long you’ve had your coverage in place.
- If you’ve already paid and haven’t used your auto insurance, you’re entitled to a refund for that amount from your current auto insurance provider.
- Remember that you’re still required by state law to keep active auto insurance coverage if you’re driving, which means that you need to have another policy lined up before your current policy ends.
- The best way to cancel your auto insurance coverage is to call your insurance provider and inquire about how you need to notice cancellation and stop your billing.
If you go through canceling your auto insurance coverage, you’ll find out that the actual cancellation is the easy part. Remember, you can cancel your policy regardless of how and when you pay your rates.
How can you cancel your auto insurance coverage quickly?
The most effective way to cancel your auto insurance coverage is to make a phone call directly to your auto insurance provider.
An agent will tell you over the phone if they require any written notice for you to cancel your coverage. The number for your current provider is on your proof of insurance card.
The most important thing to understand about the process of canceling your auto insurance is that you must have another provider lined up so that you can avoid any lapse in coverage.
Don’t make the mistake of canceling your current coverage too soon because you could end up with a fine if you’re caught without the required insurance.
When you check with another provider about signing up for a new auto insurance policy, you’ll want to be clear about the policy’s effective dates. That means that you’ll need to know exactly when your new coverage starts.
You don’t want to cancel your existing coverage before that date.
When To Cancel Auto Insurance
One of the rights that you have as a party in the contract is that you can cancel your policy at any time. The insurer isn’t given that same right because it could put a consumer in a dangerous place without protection.
What are the reasons you can cancel your auto insurance early?
You don’t always have control over the situations that present themselves in life. Some of these situations might eliminate the need for auto coverage.
There are more reasons why you might cancel your policy before your term is up for expiration. Here are some of the most common reasons:
- You sell your vehicle and don’t plan on buying a new one
- Your car is totaled, and you don’t plan on replacing it
- Your car breaks down, and you don’t need a replacement
- You lose your license or plan on surrendering it voluntarily
- You transfer ownership to a family member and don’t need insurance in your name
- You move out of state and need insurance from a new provider
- You want to buy insurance from a new carrier to save money and get more affordable rates
- You combine insurance with a new spouse
When do you cancel auto insurance after selling a car?
When you’re selling a vehicle that’s registered in your name, don’t jump the gun when it comes to insurance cancellations.
As long as you’re still the car’s legal owner and the name on the car registration and insurance match, you have a legal obligation to keep a minimum amount of liability insurance on the car.
This minimum amount of coverage is dictated by what is required by law in the state. The safest bet is to wait until you negotiate a deal and the buyer hands over the cash.
After you have your payment receipt, you can sign the bill of sale. Once a valid bill of sale is signed, ownership is transferred, and it’s not your legal responsibility to insure the car.
Remember that your plates belong to you and should not stay with the vehicle when you sell it. If you don’t take your plates and the new owner gets into an accident, there could be some insurance confusion.
Keep in mind that if you have bought or will buy a vehicle to replace the one you sold, you’ll have to have coverage for that.
You’ll have to contact your insurer, but it’s a fairly simple and straightforward process to remove the coverage from the car you sold and add coverage to your recently purchased car. In that case, you won’t be canceling coverage.
If you sell your car and have no plans of purchasing another, then you’ll want to outright cancel your coverage.
Keep reading for tips on what to do about insurance.
Should you cancel your auto insurance if you aren’t going to be driving for an extended time?
Maybe you’ve decided to put your car in storage for the winter, or you’re going on an extended trip. Perhaps you’ve decided pedal power and public transportation will be your new means of travel.
Whatever your reason, there are points to consider to help you decide if canceling coverage is the route you should take.
What if your vehicle is in storage?
If you’re going to have your vehicle in storage for an extended period, it’s wise to consider the pros and cons of canceling coverage. The most obvious pro is the savings on your monthly payment for insurance. The cons include:
- Having no recourse if damage happens to your vehicle while it’s stored
- Having a lapse in coverage on your record
- It may be illegal
In some states, like Kentucky, you’re required to keep minimum coverage limits on any vehicle you own regardless of whether you’re driving it or not — unless you surrender your license plates to the county clerk’s office.
If your vehicle is financed, your lender will likely require you to maintain full coverage regardless of your vehicle storage status.
There are ways to maintain coverage while lowering rates for a vehicle in storage.
- If your state requires liability coverage, ensure the limits you carry on the stored vehicle are the minimum required.
- If your state allows you to drop coverage from a vehicle not being driven, consider dropping liability coverage while maintaining comprehensive coverage. That way, if something happens to your car in storage, the damage will be covered.
- Remove any unnecessary coverage options. If you have rental coverage, remove it. If you pay extra for roadside assistance, take that off your policy.
- Raise your deductible for comprehensive coverage if you believe your risk for damage is low.
Finally, you may also consider suspending coverage if your insurer and state allow.
What if you’re taking an extended trip?
If you’re going to be out of the area or even out of the country and you know you won’t be driving your vehicle, it doesn’t make sense to keep paying for insurance on it.
Keep in mind the tips for a car in storage listed above because many of them apply to this situation.
Your state may require a vehicle you own to be covered. Your lender may require coverage even if the vehicle is not being driven.
Call your insurance company and see if they can help you get your rates down as low as possible while still maintaining any types of insurance coverages you want (like comprehensive) or need (like liability where required).
Should you cancel auto insurance if you’re going to be without a vehicle for a while?
Maybe you decided to try out public transportation and ridesharing services to see how that lifestyle treats you.
If you’re not ready to make a lifelong commitment to that sort of transportation and may consider buying a vehicle a few months down the road, you might consider a non-owners policy.
That will cover you if you borrow your friend’s car and if you rent a vehicle. A non-owner policy will prevent a coverage lapse, which would probably hurt your rates if you start driving again.
If you’ve committed to not driving for several years, the cons of the increased rate after a coverage lapse will be outweighed by the pros of not paying monthly while you’re not driving.
Should you cancel your auto insurance if you found better coverage elsewhere?
This is the most common scenario for wanting to cancel coverage. You found cheaper auto insurance coverage, and you want to switch carriers. For example, you want to learn how to cancel Progressive auto insurance.
Before you cancel with your current provider, consider the following tips:
- Before you cancel, give your current insurance provider a call to see if discounts could be applied to get your rates lowered to be competitive with what the other insurer is offering.
- Before you cancel, make sure the company that looks better is legitimate.
- Check out A.M. Best ratings to make sure the new company is financially solid.
- Check consumer satisfaction ratings from J.D. Power and Consumer Reports.
- Ask friends and family if they’ve had any experience with the company.
If everything checks out, proceed to purchase the new insurance coverage and cancel your old policy. Just make sure the dates line up, so you don’t have a coverage lapse. Also, review our checklist to make sure you haven’t forgotten anything.
Should you cancel your auto insurance if you moved out of state?
If you have a move coming up, you’re going to have to move before you can transfer insurance to your new state of residence. Once you’ve moved, you’ll have a set amount of time (which varies by state) to register your vehicle in that state.
Additionally, while some companies can transfer policy between states, most require a complete cancellation and rewrite due to coverages varying between states. You’ll want to check with your agent to see what is needed.
You’ll have to show proof of insurance to register, so you’ll need to figure out your insurance coverage before you register your vehicle.
Not all insurance companies are licensed to conduct business in all states, but if your current insurance provider also offers coverage in your new state, the transition should be easier. Prepare for some changes, though:
Your level of coverage will likely change, as different states require different levels and types of coverage. Your rate will also likely change.
Liability Auto Insurance Rates
|Average Annual Full Coverage Auto Insurance Rates|
|District of Columbia||$628.82||$1,330.73|
If your current provider isn’t licensed in your new state, you’ll have to change insurers.
Most auto insurance companies don’t charge a cancellation fee for ending a policy but may charge a short rate fee of $100 for ending a policy too early.
Check out the fee chart below to learn how to cancel Geico car insurance, cancel Allstate car insurance, and cancel car insurance with State Farm.
There are hundreds of auto insurance companies and a wide variety of cancellation processes. Let’s take a look at the cancellation fees of some auto insurance companies in the U.S.
|Auto Insurance Companies||Cancellation Fee|
|Mercury||10 percent of unused premium|
|National General (previously GMAC)||Varies by state – $0–$50|
|The General||10 percent of unused premium|
The companies represented above make up most of the market share in the U.S. If your company is not listed, you can call your agent to determine what kind of fees you’d be looking at if you decided to cancel before your policy is up for renewal.
You’ll be safe from fees if you cancel at renewal time; there won’t be any fees no matter what company you use.
- A standard Personal Auto Policy is sold in either a six-month or a 12-month term.
- Auto insurance policyholders are free to cancel their auto insurance policies at any time and for any reason.
- If you pay in advance and cancel your policy mid-term, you’re eligible to receive a refund for the unearned payments.
- It’s common for auto insurance companies to subtract a short-rate fee from your refund for the administrative costs associated with a client canceling their policy early.
- Some states don’t allow insurance companies to charge an early cancellation fee. In these states, you’ll receive a pro-rated refund for all of your unused payments.
As long as you’re equipped with the knowledge early on, you can plan before purchasing a policy.
If I cancel my auto insurance, will I get a refund?
Are you dreaming of just selling your car and getting an insurance refund? You might get a car insurance refund when your car is sold.
If your rates have been paid for coverage that extends past the cancellation date, you’ll get a prorated refund.
What is the difference between a short-rate cancellation and a prorate cancellation?
When you cancel your policy, you’re entitled to receive a refund of your unearned premiums after the cancellation is processed.
The company will either process a short-rate cancellation or a prorate cancellation. The final refund will be mailed to you seven to 14 days after the carrier receives your cancellation request.
A prorate cancellation is one where you receive all of the premiums you’ve paid in advance.
No fee is subtracted from the refund. A short-rate cancellation is one where a fee is deducted from your refund. This fee depends on your state and the carrier. Some short-rate fees are fixed, and others are a percentage of the unused premiums.
If you’re not happy with your current premium, you can shop around and look for a more affordable policy. Check with your current carrier before you start shopping to see if you’ll be charged a fee.
If it still makes sense to switch carriers after the fee is charged, use an online rate comparison tool and see where you can save money.
Should you just stop paying your auto insurance bill?
If you think the easiest way to cancel your auto insurance is to just stop paying, think again.
Many companies (most in fact) have a grace period where you are covered if you’ve forgotten to pay or don’t have the money when the payment is due. You might be responsible for paying coverage during that grace period.
For example, say your next payment is due in February to cover March’s coverage. You proceed to secure new coverage that begins on March 1, and you don’t pay your previous insurer, but your old company has a 20-day grace period, so they cover you up until March 20.
Now you’re paying your new company starting in March, and you’re responsible for paying your old company for the first 20 days in March. Don’t get yourself into that situation.
Stopping payment with no communication is not the route to take when switching companies.
Learn how to switch car insurance companies the right way, so you don’t end up paying extra for your coverage.
Talk to your insurance provider. Tell them that you’re canceling and when you want the cancellation to be final. If you don’t, you might regret it.
- Your unpaid balance could be sent to collections, which would hurt your credit score.
- You never know that you may want to return to that agency in a couple of years, so keeping a good relationship is important.
Now, the main point, how do you cancel car insurance? Read on.
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When Auto Insurers Cancel Your Policy
If an insurance company had permission to cancel your policy for any reason, it’d be common for carriers to cancel coverage immediately after a claim or a moving violation.
Fortunately for you as a consumer, you have rights that protect you from losing coverage at any time during your term.
The only time a company can cancel a policy without notice is when it is still in the underwriting phase.
The company has 30-60 days to underwrite your application and decide if they want to take on the risk. If they discover something on your record, they can change their mind during this time.
If you lied on the documents or you’ve been convicted of fraud, your policy will be rescinded.
Policyholders who are guilty of fraud or material misrepresentation aren’t protected from mid-term cancellations. Here are the reasons your policy can be canceled after the 60-day cooling-off period:
- You don’t pay your insurance premiums on time
- Material misrepresentation
- A material change in risk is assumed that increases the possibility of a hazard.
- A substantial breach of duties written in the contract
What happens if your auto insurance is canceled?
Auto insurance canceled? You could pay up to 29 percent more on your next policy if you’ve been canceled over 30 days. Compare rates from different companies below.
- Auto insurance is compulsory in all but two states: New Hampshire and Virginia.
- If you fail to make on-time premium payments or are guilty of lying on your insurance policy, your insurer can terminate your policy.
- Most states have an electronic verification system to verify whether or not auto insurance policies on registered vehicles are active.
- If the insurer terminates your auto insurance, it’s the insurer’s responsibility to notify the DMV that the coverage is no longer active.
- When the Department of Motor Vehicles is informed of a policy cancellation, they will notice the registered owner requesting proof of new coverage.
- If you have a lapse in coverage, the Department can suspend your registration and charge you a reinstatement fee.
Auto insurance is something that you’re required to carry by law. Not only do you have to purchase a minimum amount of coverage, but you also have to maintain the coverage for as long you own the car.
If you do not have coverage while the car is registered in your name, you put yourself and others at risk. As you shop for insurance, it’s important to build a policy that you can afford to pay for.
If you can’t make your regular payments, allowing your policy to lapse can result in severe penalties and stiff fines. It’s best to know what can happen if your insurance cancels before it ever gets to this point.
When can an auto insurance company cancel an auto insurance policy midterm?
Auto insurance companies must comply with the regulations set by the Department of Insurance when it comes to canceling insurance policies.
State regulators protect consumers by limiting when insurers can cancel policies in the middle of an insurance term. Some of these reasons include:
- Non-payment of premiums
- Filing a fraudulent claim
- Material misrepresentation on your application
- License revocation
- Registration suspension
Can you get auto insurance if your policy was canceled?
You’re required to maintain auto insurance by law. You could get auto insurance if your previous provider canceled you. However, you may pay higher rates.
- If your previous auto insurance provider canceled your auto insurance, it is still possible to get a new auto insurance policy, but you may need to brace yourself to pay a bit more.
- Even though your insurance provider may have canceled your coverage, you are still required by state law to maintain coverage at all times that you are driving.
- You can start by searching online for quotes from different auto insurance companies that operate in your area and compare prices.
- You may end up having to pay a bit more for coverage than you would have expected after being caught with a lapse in your auto insurance coverage.
- If you are unable to find any auto insurance sources from traditional providers, you should check with your state’s department of insurance for options for high-risk drivers.
Having your auto insurance canceled can be a stressful thing to go through because you’re still required by state law to have a basic auto liability policy.
If you find yourself in this situation, the best thing to do is start figuring out your auto insurance coverage options immediately to minimize the possibility of paying a fine or having your driver’s license suspended.
How can you get auto insurance if your policy was canceled?
It’s a good idea to immediately start looking into your auto insurance options if your auto insurance was canceled.
You’re still legally required to have adequate auto insurance coverage under state law, so if you have a lapse in coverage, this could result in you having to pay fines or even having your driver’s license suspended.
Having your auto insurance canceled doesn’t necessarily mean you will have a problem finding coverage options elsewhere, but you could end up paying a bit more for your premium.
Compare auto insurance quotes today and begin saving on your premiums.
What’s the difference between cancellation and non-renewal?
As a first step, it’s a good idea to figure out whether the auto insurance company is telling you that your coverage is canceled or whether it’s not going to be renewed for additional policy terms.
If you find out that your policy is canceled, you’ll need to move much more quickly to get yourself another valid auto insurance policy.
There are only certain reasons for which an auto insurance company is legally allowed to cancel your auto insurance policy before the end of a term after it’s been in effect for a certain period, including:
- Failure to pay your premium
- Committing fraud on your application or while filing a claim
- Your driver’s license is suspended or revoked
However, with non-renewal, the auto insurance company can decide not to renew your policy on its own accord.
You will be given some notice that the auto insurance company has made this decision because it is required by state law.
If you do not receive a written notice of a decision of non-renewal, you should contact your state’s department of insurance immediately to report this violation of state law.
If your auto insurance policy was not renewed because your auto insurance company is no longer offering the coverage you need or no longer serving your area. This should not affect the price that you have to pay for auto insurance coverage down the line.
However, if you’re dropped because you’ve been in too many accidents or you’re a high-risk driver, then this could be an indication that you’ll pay higher rates for auto insurance.
The advantage of having a non-renewal instead of canceling your policy is that you’ll have more time to shop around for another insurance provider.
You’ll want to move on this as quickly as you can so that you don’t risk going for any time without coverage.
Can you cancel your auto insurance policy only at renewal time?
When you buy insurance for six months or 12 months at a time, the insurance company is limited in its ability to cancel your coverage after the policy has passed an initial 60-day binding period. But can I cancel an auto-renewal for car insurance?
The restrictions only apply to mid-term cancellations and not cancellations being processed at renewal.
When an insurance company decides not to renew your policy, the coverage will expire at 12:01 on the term expiration date. In the industry, this is called a non-renewal.
While insurance companies are required to notify of a non-renewal in advance, they are free to decide for any reason.
Typically, you must get 30-45 days’ notice to look for new coverage.
Can you cancel auto insurance mid-policy?
Can I change auto insurance before the renewal date? If you’re tired of paying high rates through your current carrier and want to make a switch, be sure to time everything right.
You can cancel your car insurance policy at any point and for any reason. Just make sure you have another policy in place to avoid being uninsured.
- An insurance policy term is the period that the coverage is in effect
- When you cancel your personal auto insurance policy during the term, it’s called a mid-term cancellation
- Consumers are allowed to cancel the insurance at any time, as laid out in the Consumer Bill of Rights
- If you do request a mid-policy cancellation, there’s a possibility that you could pay a cancellation fee
Insurance products help to safeguard you against financial loss. You can buy insurance on several different things, from a building to a business.
While consumers can purchase several different property types and casualty insurance, auto insurance is one of the few policies you’re required to buy under state law.
Auto insurance is one of those safeguards that’s considered mandatory. That’s why you need to be sure that you have coverage at all times, no matter how much it costs to secure and maintain your coverage.
If you’re tired of paying high rates through your current carrier and want to make a switch, be sure to time everything right.
How do you cancel your auto insurance policy mid-policy?
Canceling your insurance isn’t difficult. As soon as you have a cancellation date and you’re ready for it to be processed, you can send your insurer a written cancellation request by fax, mail, or email.
Some companies will also accept a verbal cancellation request if the date is in the future, in which you must include the following:
- Date of cancellation
- Policy number
- Date of sale (if backdating cancellation)
- Address to send paperwork and refunds
Don’t cancel your coverage on your vehicle if you don’t have new coverage in place. If you do, you could be fined for having a lapse in coverage.
Be sure to ask if there’s an insurance cancellation fee for terminating your coverage mid-policy.
Issues With Canceling Auto Insurance
Unfortunately, there’s always the potential for problems, no matter what you do. But don’t worry. We’ll help you prepare for what could happen so that your cancellation process is smooth and headache-free.
When you’re canceling coverage and switching to a new provider, the first thing you’ll want to avoid is a lapse in coverage. We’ll tell you why, next.
What is an auto insurance coverage lapse?
A lapse in auto insurance coverage is any time — even just one day — that you’re not covered by auto insurance.
To avoid a lapse, you want to make sure your new insurance is set to be in force on the same day that your previous coverage is set to be canceled.
You may think that gives you overlap of a day, but it doesn’t. As you can see in the chart above, your old insurance will end at 12:01 a.m. on the stop date, while your new insurance will start at 12:01 a.m. on the start date.
There will be no overlap, but there will be continuous coverage. What’s so bad about a lapse, anyway?
Well, it goes on your record, and you’ll likely be charged higher rates when you start new coverage because of that lapse.
If you know you won’t need insurance for a year or longer, the higher rates after a lapse will be worth not paying anything for that year or longer. If it’s a month that you won’t be driving, you’re better off continuing coverage.
So, can you get auto insurance if your policy was canceled? Keep reading.
What happens if you cancel your auto insurance policy when you sell your car?
If you’re gearing up to sell your car privately, there are many things to consider.
You’ll need to research the market value of your car, choose a channel where you’d like to advertise it, and arrange test drives after you’ve sifted through genuinely interested buyers.
- You’re only required to keep your insurance until you have transferred ownership.
- Keep coverage for test drives even if you don’t drive the car yourself.
- You must request cancellation with your insurance company and give the date of sale.
Auto insurance is an expense you must pay when you own a car and operate it regularly. Even though it’s a product no one wants to use, it’s a product that’s legally required in most states.
Unfortunately, canceling your policy too soon can lead to some serious trouble with the Department of Motor Vehicles.
Here’s your guide to insuring a vehicle you’re selling so that you can get answers to all of your pertinent questions.
Start comparing low-cost auto insurance now.
What should you do after selling your vehicle?
You don’t want to get stuck being liable for an accident after the sale. Be sure to fill out a release of liability so that you can change vehicle ownership immediately.
This can ensure that you’re not ticketed for parking violations or for failure to carry insurance because the buyer decided to take their time with transferring the plates.
It only takes minutes to fill out the release form with the information found on your bill of sale.
This will be time well spent when you avoid being fined or held personally accountable for accidents after the sale.
How do you write up a bill of sale?
It can be frustrating if you draft an incomplete bill of sale that doesn’t have the information you need to complete a release form. One way to be sure you get everything you need is to have a template ready for every appointment.
You can print out the document and just write in all the pertinent information. Just be sure to have two forms or to take copies if possible.
This protects the buyer and seller. Here’s what you’ll need to include on your bill of sale document:
- The VIN and license plate number
- Description of the vehicle being sold
- Seller’s name, address, and license number
- Buyer’s name, address, and license number
- Sales conditions (as is, with a warranty, repairs to be made)
- Sales price and method of payment
- Date of sale and date buyer took ownership
Did you cancel your policy too soon? Read on to see the consequences.
What could happen if you cancel your auto insurance coverage too soon?
Even if you don’t intend to break the law, choosing to cancel your coverage while the car is registered in your name and you’re the liable party for the car can lead to some serious penalties.
That money that you save on premiums will go to fines and penalties for failing to carry continuous coverage.
Canceling your policy too soon, even if you’re not driving the car, is a decision that’ll be treated just like you’ve decided to drive your car uninsured.
This means that you could have your plates or your license suspended, and you could be assessed fines before the tags are reinstated.
If the car is parked on the curb or in a public lot, it could be towed and impounded. That can create a major headache when all you want to do is sell your car.
Why do you need auto insurance coverage during test drives?
Aside from it being the legal thing to do to keep your insurance, it’s also the smart thing to do. Buyers just naturally want to test drive a car to see how it feels.
If you hand over the keys to an uninsured vehicle, you’re putting that driver and your assets at risk.
Your coverage is designed to cover more than just you as a driver.
If you give prospective buyers permission to drive your car, your finances are protected if that driver crashes.
This is called permissive use, and your liability and physical damage coverage will kick in.
If you choose not to keep your insurance, you don’t have anything to lean on if you hand your keys over to a bad driver unknowingly.
Should you get another policy before canceling your auto insurance?
It is very difficult to avoid getting caught if you don’t carry auto insurance. State departments of insurance purposefully set up procedures for insurance providers to send notice to the state when drivers cancel their coverage.
This is so that drivers don’t try to get away with driving without insurance on the roads.
When you have a lapse in coverage because you cancel your insurance without setting up another provider, you could be locking yourself into paying a higher price for the insurance.
This is because insurance providers want to see that you have an established history of complying with all state insurance laws.
Insurance companies report cancellation notices to a central database, which can be accessed during the underwriting process.
You should also remember that many auto insurance companies will not extend your coverage without some form of pre-payment.
Even though you may be able to make monthly payments, you may be required to pay at least a month in advance for your new auto insurance coverage to kick in.
Without an effective policy in place, you’re essentially violating state auto insurance requirements.
How do you choose another auto insurance company?
It’s easier than ever to get another auto insurance plan set in place before you cancel your existing coverage. You can request quotes from multiple companies in your area by comparison shopping online.
In addition to the prices provided by the insurance companies, you also want to check into their reputations so that you know the kind of company you’d be doing business with.
Suppose you’re going with a new company because you were unhappy with your previous insurance provider’s aspects. It’s always a good idea to ask to see what their experience has been like.
The state department of insurance will also have company information regarding customer complaints and any state law violations.
Can I cancel my auto insurance policy within 14 days?
You can cancel your auto insurance policy at any time. There may be fees associated with early cancellation, so make sure to check before making the request.
- You must apply for auto insurance before you receive a final offer for coverage.
- When you apply to an insurance company, you’ll receive a temporary binder that gives you coverage for up to 30 days.
- You have the right to cancel your auto insurance policy early, no matter who you’re insured with.
- If you sell your car or switch carriers, you can legally cancel your policy shortly after issuing it.
- If you need short-term coverage, try to find it through a carrier that will not charge a fee to cancel.
Getting car insurance can be a complicated process. Not only do you have to gather all of your licensing and vehicle information, but you also have to solicit quotes to find the best rates in town.
Once you’ve compared quotes, you’ll have to select the best combination of coverage limits and the best policy.
Then, after you’ve made your final selection, you’ll have to start the application process, which can last anywhere from 30 to 60 days.
You’ll have coverage from the moment you apply even though it takes a while to finalize an insurance rate and issue a policy.
Be sure to submit your first payment with your application and ask for a binder so that you’re not going without coverage.
Are you legally allowed to cancel an auto contract you’ve applied to enter into?
Auto insurance is a legally binding contract. If you read through your policy booklet to understand the terms and conditions of the contract, you’ll find much legalese that’s difficult for the average consumer to understand.
Even so, both parties that enter into the contract must satisfy their duties when an application is submitted.
The state’s consumer rights dictate some of the rules laid out in a policy.
When you buy auto insurance, one of your consumer rights is that you’ll be able to cancel your policy at your request.
But can you change car insurance before the renewal date? Yes. It doesn’t matter if you’re approaching your renewal or if you have almost an entire year left on the term, you have the right to request a cancellation.
What are some legitimate reasons to cancel your policy early?
It’s not ideal to cancel your insurance early, but sometimes there are factors beyond your control, and other times failing to do your research costs you money.
Here are a few valid reasons you could cancel early:
- You sell your vehicle and don’t plan to buy a replacement.
- You give your vehicle away and decide to surrender your driver’s license.
- Your vehicle is totaled in a loss, and you decide not to purchase a new one.
- You move out of state suddenly.
- Your final rate is higher than expected, and you buy insurance elsewhere.
If you cancel within two weeks, will there be a fee? Find out.
Is there going to be a fee for canceling insurance within 14 days?
There may be a fee for canceling your insurance early on in the policy. Some carriers charge these fees to protect themselves from incurring the costs of underwriting an application.
Since insurers spend money on manpower and reports, they need to be sure that the money spent isn’t in vain.
If you’re charged a fee, there will be a provision in the policy saying the company processes short-rate cancellations.
The fee charged will either be a percentage of the premiums that are still left unpaid or a fixed amount that’s spelled out in the policy.
If you’re canceling your insurance because you found a better rate elsewhere, take a look at the fee you’ll have to pay first. It’s probably not worth the switch to save $50 each term if you’re being charged 10 percent of your $1,000 balance.
If the fee is only $10 and you’re saving $50, the effort is well spent. Assessing the cost and savings is important.
How do you submit your cancellation request?
Submitting your cancellation request isn’t difficult if you request the current date or a date in the future. All you’ll have to do is write up a letter saying that you want to terminate the policy effective a certain date.
Be sure to include the following:
- Your name
- The date
- The policy number
- Your contact information
- Your signature
Turn the request in at least five days before any automatic payments are coming out of your account.
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Determining How Much Coverage is Needed
To find the most appropriate auto insurance, the first consideration should be how much coverage is needed.
The required coverage varies by state, so the state minimum will be one determining factor. It’s best to work with an agent to get a complete overview of the car insurance coverage needed before signing the contract.
Insurance companies guard against risk and have methods to determine how likely a driver will get into an auto accident.
Insurance companies can also quantify how likely an insured’s car will be stolen or damaged.
Driving habits are another consideration used when determining the appropriate amount of coverage. If there are accidents or moving violations in the driver’s recent past, more coverage may be needed.
- Collision coverage generally pays for the damage your car incurs as a result of an accident.
- Comprehensive coverage applies to damage to a vehicle that is not a result of an accident.
The amounts of coverage can generally be changed by contacting the insurance company and speaking with an agent.
Making changes to the policy should be easy, and if the insured is not satisfied with the coverage. In most cases, the policy can easily be canceled.
What are traditional auto insurance options?
Regular auto insurance options are available for the vast majority of drivers. You can start by searching for quotes from standard auto insurance companies online.
You’ll be able to compare prices from different insurance providers immediately, and you can also get an idea of the average price in your area.
If you’re able to get quotes from a traditional auto insurance company, you should expect to have your premium determined by the following:
- Credit score
- Driving record
- The type of car you drive
- How long you’ve been driving
- Where you live
Be sure to also ask about car insurance discounts available specifically for you.
According to the Federal Trade Commission, auto insurance companies offer cheaper rates to consumers with an excellent and good credit score. Policyholders with good credit scores are less likely to file a claim.
What are non-traditional options for auto insurance?
Find that your auto insurance policy is canceled instead of not renewed. You may find yourself in the boat of many other drivers in the U.S. who have to seek non-traditional auto insurance coverage.
In every state in the U.S., there is a significant market for nonstandard drivers who need auto insurance.
Many traditional auto insurance providers have a division of their company that specifically serves the nonstandard market. The state itself may also offer insurance through a high-risk option for drivers who cannot even get nonstandard auto insurance rates.
For instance, if you’ve been convicted of a DUI, you may fall into this pool.
The encouraging thing is that your driving record can improve over time if you find yourself in this situation.
After some time has passed and you haven’t gotten into any more auto accidents or had any tickets, you may be able to look back into traditional auto insurance options again.
While you may have to take some time to establish a reasonable rate with your new auto insurance provider after getting a more traditional auto insurance policy again, it’s certainly possible.
You should also inquire about steps you can take to maximize specific discounts offered to drivers by your new provider.
The most important thing about getting non-traditional insurance is to make sure that you’re complying with state laws and not cutting any corners in getting at least the coverage you need to have.
If you don’t, you could find yourself in the same situation, failing to meet insurance requirements and having to pay more for insurance for a longer period.
Why shouldn’t you buy short-term auto insurance?
You could apply for a short-term policy that lasts one to 30 days, but it’s not in your best interest. These policies have extremely high premiums because they aren’t underwritten.
They’re designed for people trying to get their license back because they don’t qualify for standard coverage.
Look for an insurance policy that you’ll want to keep for the entire term. If something comes up or you’re not happy with the carrier, you can cancel your policy. Start getting quotes through carriers online, and see which one has the best rates for you.
How does a review of your auto insurance policy and driving history help?
It is important that policyholders thoroughly read through the insurance policy to become familiar with their coverage.
The amount paid for coverage should be noted and frequently compared with current market prices.
Obtaining occasional quotes helps policyholders stay aware of how current coverage and rates stack up to the competition.
Drivers should also be aware of what is on their driving record.
If there are infractions set to expire, this will impact the amount of coverage needed and the insurance rates.
When infractions disappear from the driving record, a policy with lower premiums may be obtained. A poor driving record is one of the most common causes of expensive car insurance rates.
Should you get multiple competitive quotes?
When it’s time to shop for auto insurance, an hour or more should be set aside for the task.
The driver should have their driver’s license, current insurance policy, and vehicle information handy.
It may be possible to obtain an online quote, but it’s best to speak with a live customer service agent if you have specific questions.
Obtaining a car insurance quote generally takes 15 minutes or less, and it’s well worth the time.
Quotes can be obtained by contacting the insurance company directly or working with a partner company or agent affiliate.
Auto Insurance Requirements by State
Unlike other insurance forms, you’re required under state law to buy a minimum amount of auto coverage.
Liability coverage is required in tort states, and Personal Injury Protection coverage is required in no-fault states with compulsory auto insurance laws.
If you don’t buy the minimum auto insurance coverage required by the state, you’re violating the law. While auto insurance is mandatory in most states, there are always exceptions to the rule.
You can legally drive without insurance in Virginia and New Hampshire if you pay an uninsured motorist fee.
Remember that there are still consequences for driving without insurance in states without compulsory insurance laws.
Is auto insurance mandatory?
Auto insurance is a form of property and casualty insurance.
A property and casualty insurance policy is one that protects against property losses and legal liability that results from either damage to third-party property or injury to others. When you buy a property policy, the insurer is indemnifying you against the loss in exchange for premiums.
Auto insurance is the only type of property insurance legally required by insurance regulators in most states.
If you own a car that must be registered to be driven on public roads, insurance will more than likely be mandatory.
There are, however, a few states with exceptions to the compulsory auto insurance rule.
What happens if you are uninsured after a canceled auto insurance policy?
State auto insurance laws pertain to all vehicles registered to be driven on public roads. The law says that you must present proof of insurance when you register your car and keep that insurance active for as long as the car is registered.
If you turn in your license plates and don’t intend to drive your car, you don’t need to comply with the law.
If, however, you do have a valid registration, you can’t let your insurance lapse at any time. As soon as the coverage lapses, you are guilty of a misdemeanor offense.
If you’re caught driving without insurance, you can face stiff penalties. Here are some consequences:
- Fines for being convicted of driving without insurance after being cited
- Mandatory vehicle impound for up to 30 days
- Vehicle impound and storage fees
- Mandatory court appearances and community service
- Suspension of registration and reinstatement fees
- Loss of your driving privileges
- SR22 filing requirements
- A sentence of up to six months in jail for multiple offenses
- Increased insurance costs for falling into a high-risk driver class
- Loss of prior insurance and loyalty discounts on insurance premiums
How does the state know when you don’t have auto insurance?
In the past, uninsured drivers could get away with violating vehicle codes because they didn’t get penalized unless they were caught by law enforcement. Now, drivers aren’t so lucky.
While officers still ask for proof of insurance, they can verify whether or not your insurance is active before they even get out of the patrol car.
Most states have invested in electronic verification systems. These systems make it possible for officers and DMV agents to verify coverage in real-time to see if a policy is active.
As soon as the policy cancels, the insurer will update the system, and the state will be notified. Presenting expired auto insurance ID cards no longer works.
If your coverage lapses, the state will receive an electronic notice. Once the notice is received, the state will ask you to provide proof that you are insured.
If you have a gap in coverage, or you don’t have coverage at all, the state will suspend your registration until you buy the insurance and pay a reinstatement fee.
Having an accident while your policy is canceled is a worst-case scenario. If you currently don’t have coverage, it’s time to shop around.
Use an online insurance quote comparison tool and find the best rates. Even a basic policy can save you from having to pay the price for being uninsured.
Frequently Asked Questions: How to Cancel Auto Insurance (Everything You Need to Know)
How do you cancel auto insurance? Hopefully, now you know, but if you have more questions, keep reading to learn more.
#1 – Will canceling auto insurance affect credit?
Simply canceling will not affect credit. Just neglecting to pay might if you were covered by a grace period you didn’t pay for, and then it’s sent to collections.
That is very unlikely, as you will be contacted by the insurance company and given ample opportunity to pay before a collections agency enters the scene.
#2 – What is an auto insurance term?
An insurance term is a period on your declarations page or insurance ID cards during which your coverage is effective.
As long as you pay your premiums and don’t change the policy’s risk, your premiums will remain the same. When a policy cancels effective the expiration date, it’s called a flat cancellation.
Not everyone knows what it means to cancel auto insurance mid-policy.
When you request a mid-policy termination, it means that you’re requesting the termination of your coverage to take place during the current term.
Some companies call the term a policy period, which will last either six months or 12 months.
Your policy term is the time between the effective date and the expiration date your coverage is valid.
Anytime you select a cancellation date between these two dates, it’s called a mid-policy or a mid-term cancellation.
#3 – How do you remove a vehicle from your auto insurance policy?
How do you take a car off insurance?
You can do this by contacting your auto insurance company and getting them to remove coverage from the vehicle you want to remove. However, keep in mind that all driven cars must have liability insurance.
#4 – Should you cancel auto insurance coverage for a child at college?
Probably not, but if your child is over 100 miles away and not driving, you may be able to qualify for a discount.
Are you thinking about canceling your auto insurance policy and finding a better one? We can help, and it’s free.
#5 – Is it easy to cancel auto insurance?
Canceling insurance policies is not hard, but it can be difficult if there are hidden fees.
Avoid cancellation fees by waiting until you’re up for renewal to cancel your auto insurance. Compare quotes to reduce your bill by up to 20 percent.
If you’re ready to buy auto insurance before you cancel your old policy, use our quick and easy comparison tool by entering your ZIP code below.