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What to do when it’s time to get rid of your auto insurance policy.
Canceling your car insurance is easy, once you decide to do it. (Should you do it? More on that below.) Each company is a little bit different, and the terms of your policy will have specific information, but in general, canceling will entail a quick call to your insurance company.
Read on to find out:
Canceling your car insurance is easy, and requires quickly getting in touch with your insurance company.
1. Call your insurer.
The number will be on your insurance card, in your policy, or online. Companies that have apps, like Geico, Progressive, State Farm, or Nationwide likely have an option in the app to contact the company.
2. Ask about the cancellation process.
Specifically, you should ask about:
3. Sign and send the cancellation letter, if required.
If you’re switching companies, ensure that you have new coverage lined up that starts on or before your end-of-coverage date.
4. Get a notice of your policy cancellation.
Once your policy is canceled, you’ll receive a refund of any pre-paid premiums.
If you stop paying for your car insurance, it will get cancelled. But we don’t recommend this route!
Your car insurance company won’t know your intention is to cancel, so they’ll keep trying to get you to pay up through your grace period (the period of time that they give you to pay up before they cancel on you). Then once they do close your account, you’ll be charged through that grace period, which is generally a few weeks — not the day your last bill was due.
There is one exception: If you have a plan that doesn’t renew automatically, you can stop paying at the end of the plan without repercussions.
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You can cancel your car insurance whenever you’d like, and you’ll be refunded any “unused” premiums. However, as mentioned, if you decided to cancel via non-payment, you may be charged through the grace period.
If you’re switching car insurance companies, it’s essential that at least one day overlaps between the end date of your old policy, and the start date of the new one. Because of the times when policies start and end (generally 12:01 a.m.), if you end one policy on Monday and start the new one on Tuesday, you would be without coverage from 12:01 a.m. Monday morning and until 12:01 a.m. Tuesday morning, leaving you uninsured for a full day. Anything can happen in a day! So overlap by a day, and ensure you’re always covered.
The same rule applies if you’re getting rid of the car. Have the insurance end the day after the last day you plan to drive the car.
There are a lot of reasons you might want to cancel your car insurance policy. Some of the reasons make good sense, and some don’t. Read to find out if your reason for canceling your insurance is sound, and if not, what other options you have.
Canceling because you actually don’t need your policy is the best reason to cancel your car insurance. You have a product that you no longer need — stop paying for it. But stop in the right way — and at the right time.
Sometimes people want to cancel their car insurance because they think they no longer need their policy. Do us a solid and hold on a second — you may want to keep that policy. We’ll walk you through our (good, correct) logic:
Canceling car insurance because you’re moving to a state that doesn’t require car insurance Most states have car insurance requirements. There are only two states in the U.S. that don’t require car insurance: Virginia and New Hampshire. If you move to one of these states, it may be tempting to cancel your insurance policy — after all, you won’t be breaking the law! But just because the state doesn’t require it doesn’t make it any less important, especially if you’re on the hook for somebody else’s hospital or repair shop bills.
Canceling car insurance because you barely drive If your car is registered, you need insurance. And even if your rarely get behind the wheel, you need insurance: it’s both the law and the only way to protect yourself. Talk to your insurance company, though — it may be possible to lower your rates.
Canceling car insurance because your car is in storage Maybe you’re headed out on military deployment or spending a year abroad finding yourself; maybe you live a car-free lifestyle but want to keep your wheels just in case; or maybe you can’t drive because of an injury, but hope to be back on the road eventually. In these scenarios, it may be tempting to cancel your car insurance, but it probably isn’t a great idea, for three reasons:
As long as the car is registered, it must meet minimum insurance requirements (except in Virginia and New Hampshire), regardless of how much you drive it.
Cars can get damaged even in storage. You should at least have comprehensive coverage in case your garage burns down or a thief steals your wheels.
A lapse in coverage (that is, a period where you are uninsured) can lead to higher rates when you try to buy car insurance in the future, no matter how good your reason.
Talk to your insurance company about alternatives to canceling while your car is in storage. You may be able to lower your premiums significantly while protecting your car and your future insurability.
Finding a policy better suited to you — whether because it’s cheaper, shared with a spouse, or is bundled with other insurance products — is a good reason to cancel your car insurance.
But before you go quote shopping, know that there may be an even easier way to get lower rates: ask! Many car insurance companies are open to revisiting your rates, so that should be your first step. No luck? Then it’s time to go car insurance quote-shopping.
If you find a cheaper car insurance quote and you purchase a new policy, take note of the start date. Then, call your old insurance company to cancel your policy (and don’t forget to overlap a day).
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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