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 Mathematics.

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Chris Harrigan has an economic 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 to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 13, 2020

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Here's what you need to know...

  • Prior to canceling a policy, consumers should call the car insurance company to check on the cancellation procedure
  • The insurance company may require you to send in a written notification
  • If the policy was bought in advance, the driver should be given a refund for the amount they have not use

When you enter into an agreement with an insurance company, you are signing a contract between two parties.

Consumers have rights that protect them from the insurer canceling it early without having a good reason. The cancellation process varies from company to company.

Some require written notice while others need only a simple e-mail. Whatever the law is in your state should be followed to avoid extra fees or the suspension of your driver’s license.

After you’ve canceled your policy, we can help you find a new car insurance policy.

Just enter your zip code in our comparison tool above and you will receive FREE car insurance quotes from multiple car insurance companies.

Table of Contents

Giving Your Cancellation Notice

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Prior to canceling a policy, consumers should call the car insurance company to check on the cancellation procedure.

The insurance company may require you to send in a written notification that tells them when the cancellation will start along with your policy number.

For consumers who are getting a different policy, their new insurance company may take care of the entire cancellation procedure so check in advance.

If the policy was bought in advance, the driver should be given a refund for the amount they have not used.

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Rights of the Insurer

The insurance company generally has a thirty to sixty-day window in most states to cancel the policy for any reason. After this time period, it can be exceedingly difficult for the insurer to cancel the policy.

Some of the most common reasons for an insurer cancellation outside of this time window are due to a payment lapse, a problem on your original application or a change in the level of risk involved.

They must notify you fifteen days in advance in most states and give you the exact cancellation dates.

If the insurer chooses not to renew your contract, they are bound by the same advance notification rule.

Pro-rated Refunds

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After the insurance policy is canceled, the policyholder is allowed to get a pro-rated refund for any advance payment that they made.

For individuals who purchased a new insurance policy prior to canceling their old one, they may be eligible to get a return for the overlapping days.

The old insurance company can compare proof of the new coverage to the old policy and backdate your policy.

After they have done this, a refund can be issued for the time period where dual coverage was in place.

A Lapse in Your Policy

As you debate whether to cancel your insurance policy, be wary of having a potential lapse in your insurance plan.

Driving without insurance is not an option and can carry severe consequences.

If your insurance lapses, the lack of insurance will be reported to your state’s DMV.

When you go to apply for insurance, the insurance premium cost will increase.

Some states will even suspend you’re your license and take away your plates if you do not reapply for car insurance within thirty days.

Due to the way the laws are written in most states, the policyholder is always allowed to cancel their insurance policy.

They could have sold their vehicle, found a cheaper insurance company or moved to another country.

Whatever the reason for cancellation, state law allows it to be done at any time.

In some instances, an early cancellation may result in a fee for the customer. After insurance is canceled, be sure to get a new policy as soon as possible to avoid fines and a license suspension.

State law is very strict about all drivers being insured so make sure you are not listed as an uninsured motorist.

Use our insurance comparison tool to find your next insurance policy. Enter your zip code below to receive FREE car insurance quotes!

References:

  1. https://www.statefarm.com/insurance/auto
  2. https://www.thebalance.com/insurance-company-cancelling-policy-2645554
  3. https://www.allstate.com/tools-and-resources/car-insurance/buying-a-car-on-the-weekend.aspx
  4. https://www.allstate.com/tools-and-resources/car-insurance/ask-agent-premium-deductible-limit.aspx
  5. https://www.thebalance.com/how-can-i-find-out-if-my-drivers-license-is-suspended-527261
  6. https://www.statefarm.com/insurance/auto/coverage-options/uninsured-motor-vehicle-coverage