Home Car insurance Car insurance policies How to cancel your car insurance policy How to cancel your car insurance policy Canceling your auto policy can often be done with a call or email, but make sure to cancel within a certain timeframe to avoid penalties or a lapse in coverage. Written by: Desiree Ghazi | Reviewed by: Nupur Gambhir Nupur Gambhir Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service. | Updated on July 5, 2023 Why you should trust Insure.com Quality Verified At Insure.com, we are committed to providing honest and reliable information so that you can make the best financial decisions for you and your family. All of our content is written and reviewed by industry professionals and insurance experts. We maintain strict editorial independence from insurance companies to maintain editorial integrity, so our recommendations are unbiased and are based on a comprehensive list of criteria. Most of the time, canceling your car insurance policy is a straightforward and easy process — all you have to do is call or email your insurance company. However, you want to make sure you have another policy in place before canceling, or you will experience a gap in coverage. Additionally, you will want to cancel your policy within a certain timeframe to avoid penalties or possibly getting flagged for a lapse in coverage. Such a flag can make getting coverage in the future more expensive and difficult. Read on to learn how to cancel your car insurance, as well as what might happen if you decide to let it lapse. How to cancel your car insurance policy You may just need to mail, fax or email a quick letter stating that you want to cancel as well as the effective date of cancellation. The cancellation date is key. If you’re getting coverage elsewhere, make sure your new policy is in place and active before canceling your old policy. Otherwise, you may find yourself out on the road with no coverage. Here are a few ways to cancel your policy: Call the insurance company: Calling your agent is the quickest and most common way to cancel your policy. However, some insurance companies require a signed cancellation notice. Ask your agent for details of the cancellation process and have them send over any cancellation documents that need to be signed. Mail or fax: If you don’t want to call, it’s possible to mail or fax your cancellation letter. The signed letter should include your full name, address, auto policy number and date of requested cancellation on a specified date. Stop by your agent’s office: If you have a local agent, stop by the office to cancel. If cost is the reason you are canceling, you can also ask your current agent about lowering your premium while keeping the same coverage limits and deductible. An important reminder — always start the cancellation process after you have a new policy in place. Allow some overlap so that your new policy is in place before canceling the old one. Also, make sure there is a paper or electronic trail of your cancellation. The final step in all of this is to get a confirmation of cancellation from your insurer or agent. This confirms that your policy is formally canceled. Your current insurer should also refund any pre-paid premiums minus cancellation fees. Always read the fine print when canceling your car insurance policy The majority of insurance companies make canceling a policy a fairly straightforward process. However, others may require some attention to detail. “Depending on the insurance company, there may be different cancellation procedures. It is important to cancel a policy correctly so that you are not charged any unnecessary fees or penalties,” says Fred Hoffman, founder and chief executive of Life Insurance Guideline. Here are a few details to check: Cancellation fees: Some car insurance companies charge a cancellation fee. The fee can range from $25 up to a short-rate fee, which breaks down to 10% of the remaining policy premium. As an example, if you signed up for a 12-month policy and canceled after nine months, you would be on the hook for 10% of the remaining three months. Notification: The notification period can vary from canceling immediately to requiring 30 days notice to dump your policy. Cancellation letter: As mentioned earlier, some insurers require a cancellation letter while others may be satisfied with a verbal cancellation over the phone. Your policy should spell out what you need to do to cancel your policy. What to look out for when you’re canceling your policy Not canceling your policy accordingly leads to problems. Here are a few reasons to make sure you cancel the right way: You may have to pay extra fees: If you fail to properly cancel your policy and don’t make a payment at renewal time, you will eventually be canceled for non-payment. “Don’t let your policy just lapse for non-payment,” Walden says. “A surprising number of people think that they can stop paying their insurance premium and their provider will eventually drop them. This is a mistake. The company will continue to insure your vehicle, and they’ll continue to charge you for coverage,” Walden says. You may end up paying for both policies: This usually pops up if you pay for your current car insurance via electronic funds transfer. If you fail to notify your insurer that you’re canceling your policy, the policy will simply renew on your renewal date. They will take the money from your account. You can usually get that money back by sending proof of your new coverage to your old insurance company, but it will most likely require a few phone calls and lots of time. You will be flagged for non-payment: If you decide not to contact your current insurer and don’t pay your premium, your old insurer will cancel your policy and drop you as a customer. However, non-payment cancellations are a red flag on your insurance record. It may result in insurers considering you a higher risk, which leads to higher premiums or even policy denial. QuickTake "Price optimization" puts the screws to loyal car insurance customers The difference between cancellation and nonrenewal of car insurance The consequences of late car insurance payments 12 ways to save money on car insurance What happens when you pay off your car 'Excluded' really means you're excluded. No, seriously. How to read (and actually understand!) your auto insurance policy Insurance after death of a policyholder: How to change names on policies How to switch auto insurance Rental reimbursement on your car insurance policy is a good idea Moving and insurance: Checklist for a smooth move Unforgiven: Top 5 reasons your insurance policy will be cancelled Arm in a cast? On pain meds? Maybe you shouldn't drive See more > Why canceling your insurance isn’t always a good idea Dropping your car insurance can be a mistake. Here are times you may want to rethink that decision: You’re moving to a state where car insurance isn’t required: Currently, there are only two states that don’t require drivers to carry car insurance — Virginia and New Hampshire. But even though insurance isn’t a requirement, you’re still financially responsible for any accidents or damage caused by your vehicle. In states that don’t require insurance, you usually have to meet certain financial thresholds that prove you can cover the costs of any at-fault accidents. Unless you are fairly wealthy, you shouldn’t be out on the road without coverage. You don’t drive much anymore: Even if you barely drive anymore, you still need car insurance. Not only is it the law in almost every state, but insurance can also be a financial lifesaver if you are in an accident. Car accidents can lead to expensive medical bills, legal fees and the cost to replace another person’s car, making car insurance a necessity. Talk to your car insurance agent to see if they can lower your premium. Insurers often give discounts to people who don’t drive much. How to buy a new car insurance policy Before you cancel your policy, you need to find a new one. Shopping for your insurance coverage on a regular basis is always a great idea. You may want to compare premiums during the following life events: Purchasing a car Putting cars on a multi-car insurance policy Adding or removing a driver from a policy Marriage or divorce Adding a teen driver Buying a house DUI or major violation Accident Change in credit score Industry experts recommend shopping your coverage at least once a year and anytime you experience a major life event. When shopping for coverage, get quotes from at least five different insurers and compare apples to apples when it comes to coverage levels and deductibles. People also askWill I be penalized for canceling car insurance if I haven't made any claims? If you haven't made any claims, you may not face direct penalties for canceling your car insurance. However, there are essential points to consider before making the decision. Understanding the impact Canceling your car insurance can have an impact on the following: No-claims... Read MoreIs there a specific form or documentation required for canceling car insurance? Yes, canceling car insurance often requires a specific form or documentation to initiate the process with your insurance company. While the exact requirements can vary between providers, there are common steps to follow. Key Takeaways To cancel car insurance, you need a specific form or... Read MoreWill canceling my car insurance affect my no-claims bonus? Canceling your car insurance can indeed impact your no-claims bonus. A no-claims bonus (NCB) is a reward given to policyholders for not making any claims during a specific period. If you cancel your insurance, you might lose your accrued NCB. Key Takeaways Canceling car insurance can affect... Read MoreCan I suspend my car insurance temporarily instead of canceling it? Yes, you may have the option to temporarily suspend your car insurance instead of canceling it. This option is known as a car insurance policy suspension or car insurance hold. Key Takeaways Car insurance policy suspension, also known as a car insurance hold, allows you to temporarily... Read MoreIs there a cancelation fee for ending my car insurance policy early? Cancelation fees for ending your car insurance policy early may vary depending on your insurance provider and the terms of your policy. Some companies might charge a fee if you decide to cancel before the policy's expiration date. What are the factors affecting the cancelation... Read MoreWill canceling car insurance affect my credit score? Canceling your car insurance is unlikely to directly affect your credit score. Insurance companies do not report policy cancellations to credit bureaus. However, there are some indirect ways in which it could impact your credit score. Potential indirect effects of canceling car insurance on... Read MoreCan I cancel car insurance online? Yes, you can cancel your car insurance online with many insurance companies. The process is usually straightforward and can be done through the insurer's website or mobile app. Canceling car insurance online Log into your account - Visit the insurer's website and log into your account... Read MoreCan I cancel my car insurance policy anytime? You have the flexibility to cancel your car insurance policy at any time. If you wish to do so, it's essential to review your policy to understand any cancellation fees, refund policies, or notice requirements. Reach out to your insurance provider or agent directly and provide them with the... Read MoreIs there a specific notice period required to cancel car insurance? In most cases, there is a notice period required when canceling car insurance. The notice period can vary depending on your insurance provider and local regulations. Typically, it ranges from 15 to 30 days. This means you need to inform your insurance company in advance before the cancellation... Read MoreWill I receive a refund if I cancel my car insurance midterm? Yes, you may receive a refund if you cancel your car insurance midterm. The amount of the refund depends on various factors, including the insurance company's policy, the duration of your coverage, and any applicable fees. Key Takeaways Car insurance midterm cancellation can result in a... Read More In case you missed it Best Car Insurance Companies of 2023 Car insurance rates by state: The most expensive and cheapest states for car ins... What is Full Coverage Car Insurance? A complete guide to car insurance costs for seniors A complete guide to adding a teenager to your car insurance policy What to do after a car accident that’s not your fault Total warfare: What to do when your auto insurer totals your car Car insurance claims: Who gets the claims check? Buying and insuring a used car: Most and least expensive models to insure in 202... 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