Sometimes the question comes up, 'Can I cancel my car insurance anytime?' The answer is that you technically are able to cancel your insurance policy at any time. That being said, you need to take into consideration your insurer's specific cancellation policy to know all the details. Otherwise, you may end up paying cancellation fees or losing your chance to get a refund for any payments you made in advance.
What Happens When I Cancel My Car Insurance?
In the best-case scenario, you can simply call and cancel your coverage and you will get all your prepaid premiums refunded. During other times, your policy might remain active for 15 to 30 more days or up until the next payment is due. Sometimes it's not so simple to cancel your policy. It all depends on the specific cancellation rules of your insurance company.
What You Need To Know When Canceling a Policy
According to Policygenius, you may need to consider the following circ*mstances when canceling your plan:
- Cancellation fees: Some car insurance companies charge cancellation fees, usually $50. In other cases, they could charge you a small percentage of your final premium that you were going to pay in the future. The majority of the time, you will not have to pay a cancellation fee.
- Cancellation letter: You may be required to send a formal cancellation letter. If this is the case, you will need to call your insurance company to get the details of where to fax it.
- Notice period: Some companies do require a 30-day notice in advance before you can cancel your policy.
You will want to check your policy for all these clauses before canceling to make sure that the process goes smoothly.
How To Correctly Cancel a Car Insurance Policy
The website 4AutoInsuranceQuote.com suggests some of the steps you'll want to take to cancel your car insurance:
- Make a phone call: Call your insurance policy provider's customer service line during business hours. You're going to want to give them a specific date to cancel your coverage. Sometimes insurance companies will try to keep your business by offering you discounts or other offers explains Bankrate.
- Get the details: A customer service representative will walk you through the cancellation process. It's essential that you know the details of the cancellation process, so you should ask as many questions as you need to.
- Fill out paperwork: Your insurance provider might send you a form for you to request a cancellation. Typically, the information will be filled out for you. You will need to look it over thoroughly to check for mistakes and sign all the required areas.
- Send proof of new insurance: If you switch to a new insurer before canceling your old policy, you may have to send proof of your new coverage to your old insurance company. In most cases, your new insurance identification card is enough proof. You'll want to double-check the information on your card to make sure it is correct.
- Consider whether you're entitled to a refund: You're usually entitled to a refund if you paid any of your premium in advance and then canceled your plan before it was actually due.
- Receive a notice of your cancellation: Your insurance provider will send you a notice when your plan has been officially canceled. Ask them to send it to you through a contact method that works best for you, such as a letter or an email.
Will I Get a Refund When I Cancel My Policy?
The answer is that every insurance policy is unique. Some will give you money back, but others might not. It all depends on the details in your agreement. To be specific, you could pay six months of your car insurance policy at once. If you cancel your plan before the six months pass, you may be able to get a refund.
You may get a refund if you cancel your plan in the middle of the month. For example, if you canceled your plan on January 20 and you had already paid premiums for all of January, you could receive money back for the days January 20-January 31.
In some cases, you may not get a refund if you cancel your payment during a time called the 'grace period.' This term refers to the time after a payment is due when you are still covered, even if you fail to make the payment on time. On average, these can last seven to 10 days before your insurer cancels your policy. If you cancel during a grace period, you may not get any money back says the Balance. Again, it all depends on the details of the policy. It is important to be aware of your cancelation terms.
What Happens If I Stop Paying My Premium?
If you stop paying your premium and fail to inform your insurer of your intention to cancel your policy, then they will keep sending you bills. Each plan has a different limit on how many months you can be overdue. After a certain amount of time of inactivity, they will cancel your plan. That might sound harmless, but it can stay on your credit record as a derogatory mark. When you apply for insurance again, insurers will see this as a bad sign. Insure.com tells us that they may charge you more because they see you as a high-risk candidate.
When Is a Good Time To Cancel My Policy?
There aren't a lot of times that it is a good idea to go without car insurance. The only time you should be canceling your plan is if you are switching to a new insurance plan or selling your vehicle. Even if you're not a vehicle owner, it can be a good idea to have insurance. It will be helpful if you plan to get rides often or borrow someone's car when needed. You will always want to take your time choosing an insurance policy to find the best plan for you or your family.
Information and research in this article verified by ASE-certified Master Technician Duane Sayaloune of YourMechanic.com. For any feedback or correction requests please contact us at research@caranddriver.com.
Sources:
https://www.policygenius.com/auto-insurance/how-to-cancel-car-insurance/
https://www.4autoinsurancequote.com/blog/can-i-cancel-my-auto-insurance-at-any-time/
https://www.bankrate.com/insurance/car/switching-carriers/
https://www.insure.com/car-insurance/cancel-policy.html
https://www.thebalance.com/can-i-cancel-car-insurance-anytime-527400
https://www.caranddriver.com/news/a18672962/take-these-steps-to-save-on-car-insurance/
https://www.caranddriver.com/news/a15341266/car-insurance-customers-to-be-refunded-millions-as-wells-fargo-wades-through-scandals/
Hearst Autos Research
Hearst Autos Research, produced independently of the Car and Driver Editorial staff, provides articles about cars and the automotive industry to help readers make informed purchasing choices.
