Can you cancel car insurance anytime during your policy term?

Do you want to know how to cancel car insurance right away? You have an option to cancel auto insurance any time you want, but some insurance companies may prevent you from canceling immediately.

So how do you cancel an insurance policy? Is there a cancellation fee? Don’t worry – we’re here to answer your questions.

This article explains how to cancel auto insurance at most companies and why you should shop around before canceling auto insurance coverage.

Read on to learn whether you can cancel car insurance anytime. Enter your ZIP code in the free online quote tool to compare multiple insurance companies near you.

Can you cancel auto insurance anytime during your policy term?

The short answer is yes. Car insurance companies allow you to cancel your insurance policy at any time for any reason.

But canceling your auto insurance policy may come with penalties or fees. For example, canceling a car insurance policy without getting another one could raise your rates when you buy a new policy.

This is known as a coverage gap or lapse in auto insurance. A lapse in coverage increases your insurance risk and drives up your rates.

In addition to a possible lapse in coverage, you could face cancellation fees. The average cost of cancellation fees is between $25 and $50.

However, some auto insurance companies issue a short-rate fee. A short-rate fee is a fee that takes a percentage (usually 10%) of your insurance bill and charges you for cancellation.

What is the best way to cancel auto insurance?

The best way to cancel car insurance is by phone, mail, or in person. Many people search for how to cancel car insurance online, but most companies don’t allow you to cancel insurance over the internet.

So how do you cancel an insurance policy? Let’s examine how to cancel an insurance policy using various methods.

How do I cancel auto insurance by phone?

Follow this step-by-step process if you want to cancel your car insurance policy by phone. Your situation may be different, but you can use this general method to cancel an insurance policy.

• Step #1 – Call your insurance company’s toll-free number
• Step #2 – Ask for a representative and let them know you want to cancel
• Step #3 – Provide your name, address, policy number, and other personal information they need
• Step #4 – Set a cancellation date
• Step #5 – Shop for another policy while you wait for the cancellation date

Although you can check the status of your insurance policy online, canceling car insurance online isn’t an option for most policyholders.

How do you cancel auto insurance by mail?

You’ll need to write a letter stating that you want to cancel your policy. Here’s a list of things you should include in the letter:

• Your name
• Address
• Policy number
• Driver’s license number
• Cancellation date

Send your cancellation letter to your insurance company. But it may take a few days for them to process your request.

Do I have to cancel my auto insurance policy in person?

No, you don’t. However, some insurance companies insist that you talk to the agent assigned to your policy.

Go to your car insurance agent’s office during business hours and ask to cancel your policy. Bring a copy of your insurance bill so the agent can find your policy faster.

The agent will ask you to set a cancellation date. This gives you time to find another policy, or you may decide to keep your insurance policy.

Why can’t I cancel my auto insurance policy online?

Canceling auto insurance online would be convenient, but the standards of most insurance companies won’t allow online cancellation.

Most cancellations don’t go through immediately. It takes a few days to report and process a cancellation to your state and other departments of an insurance company.

Why should I pick a date to cancel an auto insurance policy?

Picking a date to cancel an insurance policy gives you time to find another policy. If you fail to get another policy, you’ll be uninsured, and your state could flag you.

Driving without insurance can lead to fines, a suspended driver’s license, and other legal penalties.

For instance, if you cancel your insurance and don’t buy coverage before cancellation ends, your state may be notified that you don’t have coverage.

Some insurance agents and representatives may ask what company you’re going to next. This transition ensures that you won’t be uninsured and keeps your insurance record free from a coverage lapse.

Which insurance companies should I compare during cancellation?

While you wait for your cancellation date, you should start comparing auto insurance companies. The best place to start is with the top car insurance companies in the United States.

Let’s look at a few estimates from the best insurance companies in America.

Average Monthly Auto Insurance Rates by Company

USAA auto insurance is for members of the U.S. Armed Forces and their immediate families. Therefore, most people should shop with Geico, Nationwide, American Family, and State Farm.

You can lower your car insurance rates by switching to liability auto insurance.

Auto insurance rates vary by state, so you could get more affordable rates. If you have a clean driving record and a safe vehicle, you can get discounts of up to 30%.

How do I get a refund from my auto insurance company?

Refunds are given to policyholders who’ve paid their insurance policies in full. If you paid your car insurance in full at the start of the policy, you could get a refund after you cancel.

But your refund depends on how many months you used auto insurance. Canceling within the free-look period (7-30 days) will get you a full refund.

However, canceling your policy after three months provides a refund equal to nine months’ worth of car insurance rates (three months’ worth if you have a six-month insurance policy).

Do I have to pay my insurance after I cancel?

That depends on your cancellation timing. For example, if you cancel your policy before your monthly or semi-annual bill is issued, you won’t owe your insurance company.

However, you may have to pay for insurance services if your bill isn’t current. And a new auto insurance company won’t allow you to start a policy with them until your account at your previous insurance company is paid.

Cancel Auto Insurance Anytime: The Bottom Line

You can cancel your auto insurance anytime you need to, but it’s essential to give the insurance company proper notice. Also, you should buy another policy before you cancel.

Getting another insurance policy before your old policy ends prevents a coverage lapse. A lapse in car insurance drives up your rates and increases your risk at insurance companies.

You could also receive a fine for driving uninsured. Secure another auto insurance policy before canceling to prevent more expensive rates, fines, and other complications.

Now that you know you can cancel car insurance at any time, use our free comparison tool below to compare multiple insurance companies in your area.

Frequently Asked Questions: Cancel Auto Insurance Anytime

Do you have more questions about canceling car insurance? Check out these answers to frequently asked questions to learn more.

#1 — Can I cancel my auto insurance if I pay monthly?

Yes, you can.

#2 — What happens if I cancel my auto insurance policy early?

Canceling your car insurance policy could result in a refund, but you should get insured as soon as possible before you decide to use your vehicle.

#3 – Do you get penalized for canceling auto insurance?

It depends. If your vehicle is totaled or sold, you won’t be penalized by your state. But if you still have your car, you could create a coverage gap and get penalized by your state.