Can I Cancel My Auto Insurance at Any Time?
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There are a number of reasons why you may be ready to cancel your current auto insurance coverage plan. Maybe you’re moving to a new state, you found a better rate, or you’re simply dissatisfied with your current auto insurer.
If you’re wondering, “Can I cancel my auto insurance at any time?” The short answer is: yes. But there are certain steps you should take before pulling the plug on your current plan.
In this guide, we’ll cover how to responsibly cancel your auto insurance, what mistakes to avoid when canceling your insurance, and how to switch over to a new, better auto insurance plan. Read on.
How to Cancel Auto Insurance
If you are ready to cancel your auto insurance, you may think the easiest way to break up with your current auto insurer is to simply stop making payments.
While technically your insurer can cancel your plan this way, the best practice when it comes to canceling a plan is to notify your insurer directly. There are several ways to request car insurance cancellation, including:
Call your insurance agent – Talking directly with your agent over the phone may be the fastest way to cancel your current policy. Plus, if you are planning to switch to a new, less expensive policy, your agent may be able to offer you a better deal once you explain your reason for cancellation.
Mail or fax a written request – If you are certain you want a new policy and you’re ready to move on from your current insurer, you may want to just mail or fax a signed cancellation request directly to your agent or the insurance company’s office.
Notify the agent in-person – Some people prefer breaking up in person. Walking into your agent’s office and signing the cancellation form may be awkward, but you’ll know exactly when and how your policy was cancelled in case there is any confusion with this insurer about payments in the future.
Ask your new insurer for help canceling – Once you’ve found a new insurance company, you can have them cancel your old policy for you. This may be the cleanest way to break it off if you are worried about getting wrangled into a back-and-forth with your ex-agent.
If you’re cancelling car insurance with your current insurer, there are a handful of ways to successfully—and responsibly—cancel your current policy. Now, you’ll just need to decide when to cancel your current plan.
When to Cancel Your Auto Insurance
Life comes at you fast, and sometimes you need to cancel your auto insurance plan with very little notice.
For instance, maybe you’re moving from the suburbs to the city and have already sold your car, planning to take advantage of public transportation for the foreseeable future. Your new city job starts ASAP, and you need all the extra funds you can get to pay for your new, pricey apartment.
When cancelling your policy, a few tips to keep in mind include:
The sooner you can notify your insurer about your plans, the better. Any extra payments you make when you don’t need insurance is money wasted, so don’t hesitate.
Have your new policy in place before you cancel your old plan. This means fully choosing and making your first payment for a new plan before cancelling the old policy, ensuring that there are no gaps in coverage while you're actively on the road.
Be aware of car insurance cancellation fees. Try not to cancel a policy immediately after purchase to avoid a penalty fee. All insurance companies have their own cancellation policies, so read the fine print carefully to avoid being hit with costly surprises. The amount you pay in fees can vary from set dollar amounts to a percentage of your premium cost.
You may still owe money if you cancel insurance within the grace period. The grace period is the amount of time after your payment due date when your insurer will still cover you without canceling your policy. To avoid having to pay for these few weeks of coverage, you’ll need to provide proof of coverage from your new carrier.
Be wary of cancelling if you just filed a claim. If you’ve recently been in an accident or have an open claim with your current insurer, you may want to hold off on cancelling or switching your policy. Resolving the details of your claim will be simpler if you are dealing with one insurer only, and if they are the ones who were covering you when you were in an accident.
Now that you know how and when to cancel your auto insurance, let’s explore the reasons why you'll want to switch over to some kind of coverage if you plan to hit the road.
Switching Your Auto Insurance
Can I cancel my auto insurance at any time? Yes, you can cancel your current car insurance policy whenever you feel you need to do so. But this doesn't mean you should drive around without any kind of coverage.
Consequences of Driving Without Insurance
There are only two states in the country with no car insurance requirements: Virginia and New Hampshire. But, even in these two states, you will be held liable for costs if you cause an accident.
In most states, if you’re pulled over without automobile insurance:
You’ll pay a fine—the amount varies per state
Your car may be impounded
Rarely, you may be jailed
If you get in an accident without insurance:
You’ll face fines, and your car is more likely to be impounded
You’re more likely to have your driver’s license suspended
If you are at fault, you have a responsibility to pay for all damages
Depending on the severity of the accident and injuries involved, you could go bankrupt from having to cover all medical bills and damage costs
Maybe you have decided to cancel your current auto insurance policy because the monthly payments are too much of a drain on your bank account. While this is understandable, keep in mind that putting aside some extra money each month and cutting back on other expenses in order to pay for your auto insurance may make more financial sense in the long run.
Plus, the legal troubles and associated fees you could run into if you are pulled over or cause an accident without proper proof of insurance can add up fast.
The price of auto insurance will vary based on your location, age, driving record, and more. The average cost of minimal coverage car insurance in 2021 is $565 per year, while the average cost of maximum coverage is $1,674 a year.
Both figures may sound high, but consider this: By spending the maximum amount of $1,674 a year (around $139 a month), you could be saving thousands if not tens of thousands of dollars by being properly covered in the case of an accident.
Finding a New Auto Insurance Policy
Once you’ve decided that it is in your best interest to cancel your current auto insurance policy and you have a cancellation timeframe in mind, it’s time to start shopping for new car insurance coverage.
Consider the following when shopping for your new policy:
Ask yourself: *How much car insurance do I need?* – How much car insurance you legally need to carry varies from state to state, so be sure to research your minimum requirements before committing to a policy. In general, you’ll want to consider what kind of driver you are and how often you are on the road when shopping for the best deals on policies. If your state requirements are bare bones and you are constantly driving for your job, you may want to upgrade to a more fleshed out plan with additional types of coverage like roadside assistance and rental reimbursement.
Compare quotes from multiple companies – Even though it may be tempting to say “Yes” to the first low-cost, comprehensive policy that comes across your desk, set aside some time to really dig into the different policies currently available on the market. Compare premiums, deductibles—a low premium may mean meeting an unrealistically high deductible—and available discounts when perusing carriers.
Do your research – Shopping for car insurance is an excellent time to crowdsource information. Ask your family, friends, and coworkers what kind of coverage they have, what they like about it, and what they wish they knew when they were choosing their plan.
Ideally, you’ll cancel your current auto insurance policy after you already have a new policy in place. Taking time to do some research on a car insurance company and comparing car insurance quotes from multiple carriers will help you choose the best car insurance coverage no matter your situation.
For that, there’s Online Auto Insurance.
Find Great Auto Insurance Rates Online
So you’ve decided you want to cancel your current auto insurance policy—people cancel plans and switch policies all the time. While you can technically cancel your auto insurance at any time, it’s in your best interest to plan ahead and research any policy cancellation so you don’t face any fees or have any gap in coverage.
With resources like Online Auto Insurance, you can shop the best policies available in every state and get the answers you need to questions like, is auto insurance tax deductible? No one should have to be saddled with auto insurance they cannot afford or that is not the kind of coverage they really need.
Luckily, cancelling car insurance that you’re unhappy with and shopping for a new policy is as easy as following the above tips and tricks.
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