How to Cancel Your Car Insurance (2024)

You can easily cancel your car insurance policy, though each insurer may require different steps to cancel a policy. Some insurers allow you to cancel your policy online, but most typically ask you to speak to an agent on the phone or in person to complete the cancellation process.

You usually need to confirm your information, verify your cancellation date, and complete any necessary paperwork to cancel. You may face associated fees if you cancel, such as an early termination fee or a percentage of the remaining premium. You should always avoid a lapse between coverages to prevent potential rate increases with your future insurer.

Before you cancel your current policy, it’s a good idea to compare car insurance quotes from multiple companies to find a replacement policy that works for you.

When to cancel your car insurance

You may want to cancel your car insurance for various reasons, but it can be confusing to know the right time to cancel. Some common reasons to cancel your insurance include:

• You’re no longer driving. If you move to a walkable city, are a student who lives on campus, or work from home and no longer commute to the office, you may choose to sell your car and cancel your insurance. Just remember that you’d still need insurance if you drive a friend’s car or want to get a rental car.

• You’ve joined someone else’s policy. You may want to cancel your insurance if you can save money by joining someone else’s policy. Teen and young adult drivers can save money if they join their parents’ policy. Spouses can also save money if they enroll in a policy together.

• You’re switching companies. You may want to switch insurance companies if you can find cheaper rates or get better coverage for your budget. If you’re switching, you need to secure coverage from your new insurer before canceling your old one so you don’t have a lapse in coverage.

When not to cancel your car insurance

Canceling your coverage isn’t always the right idea. If you find yourself thinking about canceling your coverage for these reasons, you may need to reconsider:

• You want to cut costs. Insurance is expensive, but most states require you to buy it if you have a car and drive. If you get into an at-fault accident without insurance, you’ll be financially and legally responsible, and could end up paying more than you would have if you had insurance.

• You don’t need coverage for a short time. Maybe your car broke down and you’re starting to search for a new one. Or you’re going on a trip for a month or two and won’t be driving. You should still keep your coverage even if you won’t be driving for a period of time. Instead of canceling, call your insurer and see if you can pause your coverage.

• You haven’t secured a new policy. Changing your insurance is a good reason to cancel your old policy. But to avoid a lapse in coverage, you shouldn’t cancel your old insurance until you’ve secured and signed your new policy.

Canceling your car insurance is a process that typically requires more than just the click of a button online. Instead, you need to follow a series of easy, though important, steps to make sure you provide your insurer with all the necessary information to formally end your policy.

1. Review your insurer’s cancellation policy

Although you can find general information on your insurer’s website, review your policy and read any fine print that may mention how you can cancel your policy. This information may also tell you if you’ll need to pay any cancellation fees or if the insurer will give you a partial refund.

You need to provide your policy number and other details when canceling, so you should gather and review this information as your first step.

2. Decide on a new car insurance policy

You should compare new car insurance quotes prior to canceling your policy to avoid a coverage lapse — a period of time when you have no insurance coverage. All states except New Hampshire legally require a licensed driver to carry some form of minimum liability insurance that covers expenses resulting from damages you cause in an at-fault accident at all times.

Find the coverage you need for the best price available, and make the effective date of that policy with your new insurer before the final day of your current policy. Remember, make sure you have your new insurance in force before you cancel your existing policy.

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3. Contact your current insurance company

Once you purchase a new policy to replace the old one, you need to contact your current insurance company or your agent.

Most insurers have a phone number you can call to start the cancellation process, though some may offer additional options like completing an online form, chatting with a virtual agent, or initiating the process via text or mobile app.

4. Provide written notice of cancellation

You need to provide a written cancellation notice when ending your policy prior to its term limit. Your policy documents should provide directions for how to submit a written notice of cancellation by mail.

If you’d rather submit this information digitally, speak with an agent of the insurance company and ask them to explain all your options for formally submitting a written notice of cancellation.

5. Confirm cancellation

At the end of the process, don’t assume your old insurer cancelled your policy if you haven’t confirmed the cancellation with the auto insurance company or your independent agent.

A few circumstances can delay your policy termination. You may face delays if you haven’t completed all required forms or if you owe money for prior unpaid premiums or cancellation fees. Ask the insurer to provide you with written proof of cancellation to officially confirm.

You can legally cancel your car insurance policy at any time for any reason. Depending on the state you live in and your current insurer, you may face car insurance cancellation fees.

When it comes to canceling a policy, the industry doesn’t have standard fees established. Any fees depend on insurer discretion and the limitations of state law. Connecticut, for example, doesn’t have any laws preventing an insurer from assessing a cancellation fee. The state also doesn’t require insurers to disclose these cancellation fees to a policyholder.^[1]

Cancellation charges may include a flat-rate cancellation fee or a decrease in the reimbursement amount for a prepaid premium. For instance, an insurer with a 90% pro rata fee keeps 10% of what you initially paid. A short-rate fee allows the insurance company to recoup the costs associated with writing the policy you terminated early.^[2]

Identifying fees prior to signing a policy can help you prevent excess expenses later on. Before you commit to a policy, ask your agent to outline any cancellation fees or other similar payments you’d need to cover if you terminate the policy early.

As you submit a notice of cancellation, ask your current insurer if it can reduce or lower the amount charged. You could also ask your new insurer if it has any one-time fees that it can waive to offset the cost of switching insurers.

Will you get a refund if you cancel your car insurance?

Every company has different cancelation policies, but insurers will generally give you a refund for any remaining time you have on your policy at the point of cancellation. For example, if you paid in full for 12 months of coverage and cancel at eight months, you should be refunded the last four months of your policy. But any setup fees that a company may have required when you signed are typically not part of the refund.

When choosing a new company, ask your agent what their cancellation policy is, and factor that into your decision-making.

An auto insurer may cancel your policy for a number of reasons, but you can also opt to cancel your policy at any time and for any reason prior to the end of your policy term.

Drivers may cancel a car insurance policy for one or more of the following reasons:^[3]

• Cheaper premium rate: A highly saturated auto insurance market means you can typically find other insurers offering lower rates or more discounts than your current insurer.

• Different coverage options: Not all insurers offer the same coverage options. If you need a specific type of optional auto insurance coverage, like rideshare coverage or gap insurance, you may need to switch insurers.

• Problems with customer service: Whether it’s communicating with the insurance company or receiving claims payment, If you’re having difficulties with customer service — in regular communication or claims filing — you may want to get a policy with an insurer that has higher customer satisfaction ratings.

• You no longer own the vehicle: If you sold your vehicle, you don’t need to maintain coverage on it. But be sure not to cancel your policy until you’ve legally transferred the vehicle title to the new owner.

If you’ve made the choice to cancel your car insurance, make sure you’re carrying out this decision in the most responsible way. Consider these do’s and don’ts when canceling your policy.

What to do if your insurance company cancels your policy

An insurance company can end your policy via cancellation or non-renewal. Cancellation occurs if you fail to pay your premium, commit fraud on your application, or face driver’s license suspension or revocation.^[4]

If your insurer cancels your policy, call the company immediately to ask for the reason for cancellation and determine if you qualify for reinstatement.

If you can’t reinstate your coverage, you should call other insurance companies immediately to find a new policy. It’s illegal to drive without the minimum state-required insurance. And a lapse in insurance can cause other insurers to consider you a risky driver, which typically results in higher premium rates.

Canceling car insurance FAQs