Policyholders need to cancel their car insurance for a number of reasons. Perhaps you’ve found a cheaper car insurance company or one with a better service reputation. Or perhaps you’re moving to a new state and your current company doesn’t sell there. Whatever the reason, it’s important that you cancel your car insurance once your new policy starts.
However, make sure the policies do have an overlap of a day so that you don’t have a lapse in coverage. Cancelling your car insurance is pretty straightforward. But to ensure you’re confident in how to go about the process and to make sure you don’t forget any steps, we’ve put together this guide on how to cancel your car insurance.
4 steps to cancel your car insurance
1. Read about your insurance company’s cancellation requirements
Before you contact your car insurer, you can look for their cancellation policy online. Some things to look out for include, if your insurance company has an early cancellation fee, if they require a notice period or if they require you to send in a cancellation letter (by mail or fax). You can skip this step and ask on the phone, if you prefer.
2. Contact your insurance company
The fastest and easiest way to cancel your car insurance is to call your insurance company. You should be able to find the number to call online or on your policy. When cancelling your car insurance, make sure the date you cancel on doesn’t result in any lapse in coverage.
3. Sign the cancellation form (if required)
If you’re required to mail or fax a cancellation letter, you’ll need to sign it and send it in to your car insurance company.
4. Keep a record of your cancellation
You’ll want to make sure you have a record that your car insurance has been cancelled. Additionally, if you cancel your policy early and are getting pre-paid premiums back from your insurer, make sure you’re getting the appropriate amount back.
Keep this information handy when cancelling your car insurance
One of the fastest and easiest ways to cancel your car insurance policy is to call your insurance company. While your insurer may ask you for details that don't need any preparation, such as your full name, address, and your social security number, you’ll also be required to submit other information that you likely won’t know right off the bat. So, before you get in touch with your company, ensure you have the following details handy:
- Current policy number
- Cancellation date required
- New policy number (if you're switching companies)
- If you are not purchasing a new policy, you’ll be required to prove that you won’t be driving anymore. For this, you’ll need a:
- Bill of sale
- Proof of surrendering your license plate
Email or fax in your cancellation request
If you're considering how to cancel car insurance without having a conversation, you can either email or fax in your cancellation request. You’ll need to ensure you secure the appropriate cancellation request form if required. This can be found on your company's website, or if you have an agent, they can email you a form as well. You will need to:
- Download the cancellation form
- Print it out
- Fill in any required information
- Mail or fax it to your insurer
Request your new insurance company cancel your old car insurance
One option for cancelling your car insurance is to have your new provider handle it. In the event your new auto insurance company can process your cancellation request, they may require the following:
- Old policy number
- Effective dates
- Your signature on the cancellation form
Once you have provided all the information and have signed the cancellation request, it will need to be sent to your old insurance car insurance provider. While faxing in the document will work if you’re dealing with a brick and mortar store, it won’t be practical if your old insurance company is, for example, an online-only car insurance provider. In this case, you will have to get in touch with them directly or go through your agent.
Always notify your old insurance company
Failure to inform your previous insurance company that you require a cancellation might result in:
- Paying for the grace period before your policy automatically gets cancelled for non-payment; or worse
- Duplicate coverage where you will be required to continue paying on both policies until you officially cancel the old one.
Important factors to remember when considering how to cancel your car insurance
Besides keeping all the necessary information at hand, it’s advisable you make a checklist of all the steps you need to fulfill to ensure your policy is cancelled effectively, including your old policy number, cancellation date required, new insurance policy start date and policy number. In addition, it’s essential you follow through with the below two points:
Keep your lienholder informed
A lienholder is a financial institution or bank that legally owns your car until such time you pay it off in full. They may either have loaned you the money to purchase the vehicle or leased you a car with an insurable interest. When you insure your car, the lienholder will be included in your policy, which will safeguard them from liability in case you are in an accident. Almost always, your lienholder will require you to be covered in full. And because their name is on your policy, your new insurer will most likely keep them informed of your coverage. It’s vital you confirm that your lienholder is informed of the cancellation and new policy because if they believe you are uninsured, they can secure a force-placed policy against you, which will be considerably expensive.
Confirmation of cancellation
Regardless of the channel you choose to cancel your car insurance policy, ensure you keep a record of your confirmation from your insurance provider stating that your policy has in fact been cancelled. In addition, if you cancel mid-policy, you may also be entitled to a refund, which hinges on any unused premium amounts. Typically, insurance companies take up to two weeks to process this request. The essential factor when considering how to cancel your car insurance is to first have a policy in place prior to canceling the old one. Or at the very least, ensure one ends and the other starts on the same day. Don't allow any time to lapse between policies putting yourself at risk of financial loss.
If you’re looking for a cheaper or better car insurance company to protect your vehicle with, check out the list of who other drivers rate as the best car insurance companies.
The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.