How do I cancel car insurance coverage?

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Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in...

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Chris Harrigan has an economy degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise...

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UPDATED: Dec 21, 2017

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  •  Whatever your reason for wanting to cancel your car insurance, you need to pay attention to the effective cancellation date
  • If you no longer need insurance on a particular car, then approach your current car insurance company and ask about the process for canceling a policy
  • Most companies require a signed letter with some information to cancel your policy. Check with your individual company to verify what you need
  • Figure out the effective date of your new policy and make sure there isn’t a gap in your coverage
  • Even driving a couple hours without car insurance poses a great liability to you and your family
  • The worst possible decision is to simply not pay your current car insurance premiums

Canceling a car insurance policy is a simple process. However, you must follow certain steps in order to avoid any lapse in car insurance coverage. There are various reasons why people would want to cancel their car insurance.

Some people are interested in switching to another car insurance company while others no longer require coverage because a vehicle was sold. Whatever your reason for wanting to cancel your car insurance, you need to pay attention to the effective cancellation date.

The most important thing to remember is that car insurance is a mandatory requirement and if you are caught driving without car insurance you are likely to face suspensions, be charged fines, or even be arrested.

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Why do you need to cancel your insurance coverage?

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Perhaps a parent has passed away and their car is no longer needed, or maybe you decided to move to a city where you no longer need a car. Many reasons exist for canceling car insurance coverage but the process is usually the same, regardless of the reason.

Some companies may ask you to pay a fee if you are terminating your contract prematurely.

If you no longer need insurance on a particular car, then approach your current car insurance company and ask about the process for canceling a policy. Most companies require a signed letter from the policyholder via fax, mail, or email.

Your company will probably require some or all of the following things in the signed letter:

  • The car insurance policy number
  • The insured person’s name
  • The car insurance company (if you are dealing with a broker)
  • The date you want the policy canceled
  • Signatures of the insured or a death certificate (in the event the insured has passed away)

In addition to notifying your company, you may also need to inform your local DMV about your cancellation and may have to turn in your license plates. Check with your state local department as each state is regulated by different laws.

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Switching Car Insurance Companies

Many drivers switch car insurance companies because of a wide range of reasons, including lower premiums, better customer service, and more.

Potential shoppers are in luck as car insurance is an extremely competitive industry. Recent technology has made it possible to search for a new policy from the comfort of your own home, by using car insurance comparison sites like our site.

Once you have found a new provider, simply call your current provider and see if they can beat the quote or ask them the appropriate steps for canceling your coverage and if there are any fees involved.

If you are still certain you want to switch car insurance companies, then figure out the effective date of your new policy and make sure there isn’t a gap in your coverage. Even driving a couple hours without car insurance poses a great liability to you and your family.

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Can I cancel car insurance online?

Every provider is different. However, many car insurance companies do not provide cancellation forms online.

Those who do usually offer fairly simple forms that need to be completed and returned in order to cancel your car insurance coverage. Always keep copies of forms for your records.

If you have paid premiums in advance, ask for a refund of payments. Make sure that you have confirmed in writing acknowledgment by your insurance company, that your car insurance coverage is canceled.

Can I just stop paying my car insurance premiums?

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The worst possible decision is to simply not pay your current car insurance premiums. Without notification, the car insurance company has no idea of your circumstances and until they are notified will simply assume that nothing has changed.

Your current car insurance providers will continue to take the premiums currently owed and you will continue to build a debt obligation. As far as the car insurance company is concerned they are still covering you, you just haven’t paid your premiums.

This bad debt has far-reaching effects. Not only have you built up an unnecessary debt, but your car insurance company may send this debt to a collection agency, which would in turn, severely hurt your credit score.

If this happens, it could possibly affect your ability to get future affordable car insurance rates. Do not think this is an option to canceling your car insurance!

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Remember!

Whenever you need to cancel a car insurance policy it’s imperative to remember that you must contact your car insurance company and always have new coverage in place before the effective cancellation date of your existing policy.

Searching for lower premiums? We can help. Simply enter your ZIP code below to get FREE car insurance quotes today!

References:
  1. https://www.geico.com/information/faq/cancel-previous-insurance/
  2. https://health.maryland.gov/vsa/Pages/death.aspx
  3. http://www.dmvnv.com/50_state_dmv_list.html
  4. https://www.thebalance.com/penalties-for-driving-without-car-insurance-in-california-527033
  5. http://www.investopedia.com/terms/b/baddebt.asp?lgl=rira-baseline-vertical

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