How To Cancel Car Insurance Without a Fine
You can cancel your car insurance by calling your provider, emailing them your cancellation letter, mailing in a hard copy of your cancellation letter, visiting your insurance agent’s office in person or by asking your new provider for assistance. If you do cancel your policy, you will need to provide proof that you’ve either sold your vehicle, that you have a new insurance policy or provide an affidavit of non-use to the DMV. While you can cancel your insurance policy at any time, there may be a fee of $50 - $100 for canceling your coverage before your term is finished. Instead of canceling your policy, you may want to consider options like pausing or reducing the coverage you have so you don’t have a lapse in coverage, which raises rates significantly. If you do cancel your current insurance plan, you should get a non-owner policy. Having some coverage is better than nothing, even if you don’t own a vehicle.
How To Cancel Your Car Insurance Policy
There are a few options you may have in order to cancel your car insurance policy. However, not having auto insurance could cause a lapse in coverage, meaning you are uninsured. This could cause a large hike in your insurance rates when you do buy car insurance.
Ways of canceling your policy include:
- Calling your provider - Many of the major insurance providers ask that policyholders contact their insurance agent to cancel. You can find the number for your provider on your insurance card, on the company website or on the mobile app. Your insurer may ask you to mail in a hard copy of your request for cancellation.
- Emailing your provider - Your insurance carrier may permit you to send them a formal letter of cancellation through email.
- Mailing in your cancellation - You can mail in your official request for cancellation. The address should be listed on your insurance card, on the company website or on the mobile app.
- Visiting the office - You can also walk into your local insurance branch and file the pertinent documents in person.
- Seeking assistance from your new provider - If you are switching to a new insurance provider, you can have them notify your old provider to begin the cancellation process.
Regardless of how you do it, make sure you contact your current provider and let them know your intentions of canceling your plan. You may need to give at least 30 days notice. Don’t assume that nonpayment means your policy is canceled. Your provider may keep billing you and report you to the credit bureaus, possibly damaging your credit score.
What Happens When You Cancel Your Car Insurance Policy?
Once you’ve canceled your insurance policy, your former provider will usually notify your state’s DMV (Department of Motor Vehicles). The DMV may require you to provide proof that you have sold your vehicle, an *affidavit of non-use or a copy of your new insurance policy. Failure to respond to the DMV could result in the state suspending your registration and/or driver’s license. You may also be required to return your vehicle’s license plates.
If there is still time left on your policy, your provider might issue a prorated refund. Keep in mind it is not uncommon for insurance companies to charge a cancellation fee for customers who forfeit their policy before their term is finished.
Make sure you have your new policy in effect before canceling with your current insurance company. Also, notify your lender that you’ve changed carriers, if you have a car loan or are leasing a vehicle.
*An affidavit of non-use lets the state know you won't be operating the vehicle on public roadways.
How Much Does it Cost To Cancel Auto Insurance?
Your insurance company may charge a cancellation fee if you drop your auto insurance policy before the term ends. This may be a flat fee between $50 - $100 or a short rate fee, which is usually 10% of the remaining balance on the policy. You can avoid a cancellation fee if you wait until your coverage term has ended.
Can I Cancel My Insurance Policy at any Time?
You can cancel your insurance at any time. However, canceling your insurance without having a new policy in place could cause a lapse in coverage which can significantly raise your insurance rates. Also, canceling your coverage before your term is finished could result in a cancellation fee. Cancellation fees vary from a percentage of your overall premium cost to a set dollar amount, usually between $50 - $100. A fee is not usually charged for a standard cancellation, which is when your policy has reached the end of its term.
What About Canceling During a Grace Period?
You can cancel your insurance during a grace period, a window of time an insurance provider allows you to go without making a premium payment while maintaining coverage. If you do cancel your plan during the grace period, you will most likely still have to pay your provider the missed premium payment.
Can My Insurance Company Cancel My Policy?
Your insurance company does have the ability to cancel your policy in limited situations. Your insurance provider can cancel your plan if:
- You haven’t paid the premium.
- You seriously misrepresented details when applying for insurance or you committed fraud.
- Your driver’s license has been revoked or suspended.
Can I Pause or Reduce My Car Insurance?
It’s possible to pause or reduce your car insurance depending on your state and your insurance provider. Reasons for pausing your coverage include:
- Prolonged vacation without driving
- Not driving while at college
- Waiting for an injury to heal that doesn't permit driving
- Your license has been suspended and you’re waiting for reinstatement
- Being deployed overseas with the military.
Coverages such as comprehensive and collision are optional. This means you can remove them if you don't have a car loan or lease. However, liability insurance is required in most states with each state having a minimum amount mandated for every policy. Depending on the state you live in, you may need to file an affidavit of non-use if you don’t intend to drive for a period of time. This lets the state know you won't operate your vehicle on public roadways. Check with the DMV to see whether or not you are required to file an affidavit of non-use.
When You Should Cancel Your Insurance
Selling Your Car Without Replacing It
You can cancel your current auto insurance plan and replace it with a non-owner policy if you don’t intend to replace the vehicle you’re selling. Cancel your current policy as soon as you’ve signed the title over to the new owner. This helps protect you should the buyer be in a car accident while the vehicle is insured by you. Offer to either tow it to their home or drive it there yourself.
Switching to a Cheaper Provider
It is possible to get cheaper rates on insurance by switching to another provider. If you are able to find an insurance company that will offer you the same coverage for less money, then you should consider canceling your current insurance for the cheaper plan. But remember, your new insurance policy should be active before you cancel your old one. This will prevent a lapse in coverage that would make your rates go up.
Removing Coverage You Don’t Need
You may want to keep your required car insurance and drop optional coverages you don’t need. If you have a car that is parked in a covered garage and is not being driven anymore, you won’t need collision coverage for that car, so consider dropping it.
Having a non-owner policy is better than going without any coverage. Enter your zip code below or call 855.214.2291 to receive your free auto insurance quotes in minutes.
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