How to Cancel Car Insurance: Steps and What to Know Before You Switch
As a driver, maintaining car insurance is vital to adhere to state laws and protect yourself financially. However, you don’t need to stick with the same insurance policy forever. You may sometimes be better off canceling your policy, whether you’re switching insurance providers, no longer driving, or selling your car.
What do you need to do to make that happen? In this guide, you’ll learn everything you need to know about how to cancel car insurance, including the steps to take, potential fees or refunds, how to avoid a lapse in coverage, and how to secure a better policy if needed. You’ll be all set to handle the car insurance cancellation process with ease.
Understanding When It’s the Right Time To Cancel Your Policy
There are lots of reasons you might decide it’s time to cancel your current policy. For example, if you no longer plan to drive, clearly you wouldn’t need to maintain an insurance policy. Other valid reasons to cancel your car insurance include:
- Selling your car
- Moving to another state or country
- Switching from your current insurer to get better coverage or lower rates
But can you cancel car insurance anytime for any reason? While you generally can cancel whenever you want, make sure you have a good reason to avoid wasting time and effort. If you’re just going away for a while or putting your car in storage, you may be better off learning how to suspend car insurance rather than canceling it.
What To Do Before You Cancel Your Car Insurance
The most important thing to do before you make your cancellation request is to secure new car insurance coverage if you’re still going to drive. If you cancel your current policy without new insurance in place, you’ll have an insurance lapse, and that can be very costly.
Driving during that lapse means you’re driving without insurance, which is likely a violation of your state’s laws and a significant financial risk. And, when you do reinstate your coverage, you will probably have to pay higher premiums. Insurance companies view drivers who have lapsed coverage as having higher risks, so they may charge more. You may also have to pay penalties for lapsed coverage, depending on your state.
Check your state’s minimum car insurance requirements and select a new policy that meets those minimums. Purchase the new policy, then confirm the start date of your policy period. A key part of how to cancel a car insurance policy is to do so after your new coverage has already started to avoid any lapse.
Step-by-Step Guide to Canceling Your Car Insurance
Once you have your new car insurance policy in place, you’re ready to make your request for cancellation to your insurance provider. Follow these steps.
1. Review Your Policy
The paperwork for your current policy will likely have instructions on how to cancel your car insurance. Review these details so you know exactly who to contact and what you need to do to process your cancellation request. For example, your policy details will tell you whether you need to pay a cancellation fee, and if so, how much it is.
2. Gather All Necessary Details
The car insurance company may ask you to confirm details like your vehicle make, model, license plate number, and insurance policy number. You should also have your insurance policy details on hand in case you need to refer to them again.
3. Contact Your Insurer by Phone, Online, or Written Request
When you have your policy paperwork in hand, contact your insurer through the method of communication specified in your policy’s cancellation instructions. You may have the option of calling, emailing, or sending your cancellation letter through the mail.
If you need to pay cancellation fees, determine how much they are and how to send the payment to your insurance provider. Then your insurer will process your cancellation request and get back to you.
4. Set Cancellation Date
Depending on your policy details, you can choose when you want your car insurance policy to end. You may need to meet certain requirements, such as giving at least 30 days' notice, but beyond that, you get to set the cancellation date. Make sure the cancellation date you choose is after the start date of your new policy.
5. Confirm Cancellation in Writing
Ask your insurance company to provide written confirmation of the cancellation. That gives you a clear record of the cancellation to refer back to later.
Will You Get a Refund? What To Expect With Unused Premiums
When you cancel car insurance, you will generally get a refund on your unused premiums that corresponds to the remaining time on your policy. Check your policy details for more information.
Avoiding a Coverage Lapse: Why It Matters
An insurance lapse is a period between when your old insurance policy ends and when the new one starts. You want to avoid lapses like these because you won’t have any car insurance during this period, which can lead to legal penalties and higher premiums when you purchase car insurance again. One of the key steps in how to switch car insurance is making sure your new policy starts before the old policy ends.
Can You Just Stop Paying To Cancel Your Policy? (Hint: Don’t)
You should not simply stop paying your car insurance premiums to cancel your policy, as this can hurt your credit and standing with insurance providers. Instead, follow the steps on how to cancel car insurance properly.
Get a Better Rate: Compare Car Insurance Before You Switch
Before you cancel your current car insurance, explore all your options for new coverage with EverQuote. It only takes a few minutes to compare car insurance options based on your driver profile and ZIP code, so don’t wait. Get your free custom comparison today.