How to Cancel Car Insurance
Getting auto insurance is a lot like any other relationship. Some go on forever and grow with you while others don't work out and you have to move on. Not all auto insurers are created equal and there may be times when you need to cancel your insurance. Your lifestyle may change and you might not drive anymore for a myriad of reasons without a car there would be little reason to continue to pay for auto insurance. You may want to lower your bill and get rid of some of the bells and whistles. There are a lot of reasons you might drop or change your car insurance. In the back of your head you remember hearing that a lapse in car insurance is bad but as with a lot about car insurance it seems the answer is always just a little more complicated than you thought it would be. This article will give you all the information you need to navigate canceling your auto insurers.
There are a few different times you should absolutely drop your insurance. It is important to think ahead in these circumstances because a gap in your insurance can be a red flag on your record and lead to higher premiums. A little forward planning can help navigate some of the stickier pathways.
Reasons you should cancel your car insurance
- Selling you vehicle – If you aren't driving it may be time to let go of that expense. An important side not is that if you sell your vehicle you should maintain your insurance until the new owner has purchased their own insurance.
- Moving to a new state – Not all car insurers cover every state, many do not so if you move out of state you will need to get a new policy and cancel your old one. This is where planning becomes important. A gap in coverage could result in your premiums raising.
- When no one will be driving – Kids go off to college and parents work from home or close to home making insurance an extra unnecessary expenditure. If you still own a vehicle you may still be required to have some form of insurance on it even if you aren't driving the vehicle. Research your states laws regarding vehicles in storage.
- When you find a better deal – Sometimes there is a cheaper company that offers the same or better product for your needs. Cancel your insurance properly and don't let a gap occur.
- When you change your level of coverage – Dropping policy aspects while not canceling the entire policy requires the same process.
There are also circumstances where you should not cancel your auto insurance even if it seems like it would be a good idea.
- When you will still be driving – Even if it's just to the store and back once a week you need to be insured. Not only is it legally required but it is just better for you to be covered in case something happens.
- When you move – Moving doesn't automatically require you to drop your policy. If your company is licensed in both states you can keep your insurance just let them know your address changed and they can make the necessary adjustments from their end.
- Marriage or divorce – It is relatively simple to add or subtract people from your policy without having to cancel your policy outright.
- Temporarily not driving – When you're not driving due to surgery or you're away from home you may be able to temporarily suspend your policy but the laws and procedures vary state to state and company to company.
- High premium rate – Don't cancel because of high payments. Check for discounts and shop around to see if you can find a cheaper policy. You can potentially find a company that meets your needs but it's important to through the proper procedure.
- Call – Calling is the easiest and probably quickest way to cancel your policy. With some companies this is all that is required others may need some documentation and a signature from you. Make sure you fill out the documents properly and get them back in a timely fashion.
- Mail or Fax – You may submit your cancellation in writing and send it to your insurer through the mail or via fax. There may be some follow-up necessary but check with your insurer in this case.
- Stop by your agent's office – This is pretty straight forward. All the documentation will be available and you can work through the details of your cancellation with the agent present to answer questions.
- Ask your new insurer to cancel your old policy – This is a fairly common practice. This also effectively avoids gaps in your insurance.
When you do cancel your insurance, make sure you're paying attention to the finer details of the process. Some companies have cancellation fees, require notification prior to cancellation, and require a cancellation letter. It can cause serious complications if you don't follow the procedure exactly as the insurer dictates. If you just drop your insurance without notification you will get flagged for non-payment which could alter your new plan, or any plan you get if you need insurance again in the future. There may be a grace period payment required where you will get covered for twenty days between policies, and if you fail to pay this you could also be flagged for non-payment.
The main lesson here is to always communicate with your insurer about any changes and what it all entails. The path may wind in directions you don't anticipate which points to the previous statement regarding pre-planning for your cancellation. Anything less could leave you with a lot of frustration and grief for a process that is for the most part relatively simple.