Everything You Need to Know About Canceling Car Insurance

You can usually cancel your car insurance policy at any time by calling your agent or broker—but you’ll need to be mindful of any cancellation fees and required notice periods.

How to cancel your car insurance policy

For most policyholders, policy cancellation requires three simple steps:

1. Call or email your current insurer or broker: Provide the insurance agent or broker with your old policy number and ask about the cancellation process.
2. Submit your cancellation request: You may need to provide 30 days’ notice, and some insurance providers require you to sign a cancellation letter. Be sure to ask about cancellation fees or a “short-rate fee” unless you’re canceling just before renewal.
3. Get confirmation of your cancellation: Some insurance companies will email you a cancellation notice while others will send it via post. Confirm that the cancellation date is correct.

It’s okay to cancel your car insurance if you’re switching policies

It’s perfectly normal to cancel your car insurance if you’re switching policies for one of the following reasons:

• You found lower car insurance rates with another auto insurance company.
• Your insurance company started charging higher rates.
• You’re unhappy with your current company and want to switch to a new car insurance company.
• You’re being added to a partner or parent’s policy.
• You want to bundle your auto insurance with another policy—like homeowners insurance or life insurance.

Don’t cancel your car insurance without a new policy in place

Canceling your car insurance altogether isn’t usually a good idea. If you’re still driving, you should get a new policy.

Remember:Driving without insurance is illegal. If you cancel your car insurance without a good reason, you can face legal and financial repercussions. Additionally, you might have to pay higher rates in the future if you have a gap in your coverage.

Here are some common scenarios where it is best to consider your options before canceling your car insurance:

• If you’re moving: Even if you’re moving to a new state with unique options for demonstrating financial responsibility (like New Hampshire), car insurance is still important to have. An insurance policy protects you after an accident so that you don’t end up in financial trouble after driving uninsured.
• If you’re storing your car: Even in storage, your car needs an insurance policy. You’ll probably want to drop collision coverage and only protect it with comprehensive coverage—this is referred to as car storage insurance or “parked car insurance.” Just remember: if your car is registered, it needs insurance.
• If you’re selling your car: Consider non-owner insurance if you’re selling your vehicle but will still be driving. Maintaining a policy prevents you from having a lapse in coverage, which is especially important if you’re ultimately planning to buy a new car.

If you want to avoid an insurance lapse, you’ll need to make sure your new policy’s start date aligns with the cancellation date of your old policy. Our research team compiled the following data on how your rates might increase after an insurance lapse:

If you’re financing or leasing a car: It’s not just the law that requires you to purchase auto insurance—your lender does too. If you’re still making car payments or if you’re leasing your car, your lender will require you to protect your car with comprehensive coverage and collision coverage. Also, make sure you let them know if you switch policies.

You might get a refund if you cancel your insurance policy

If you paid your car insurance premium upfront, you will probably get a refund after canceling your policy. Make sure to check with your insurance company to find out how much you’re owed. You’ll also want to ask whether they are deducting a cancellation fee from your refund.

If you pay your premium monthly, the chances of a refund are slim. And depending on when your cancellation takes effect, you may even still owe money.

Learn more: Car insurance refunds: Get your money back today

You can cancel your auto insurance policy at any time, but you might lose your refund or be denied future coverage

Technically, you can purchase a six-month policy and cancel it after a week. But there are a few things you’ll want to keep in mind if you want to cancel before the end of your policy period:

• If you repeatedly purchase and cancel policies—or if an insurance company thinks you are going to do this—you may be denied new coverage.
• Not all insurers offer refunds if you cancel mid-term, so be sure to ask about their cancellation policy.

That said, if your circumstances change and you need to cancel your policy in the middle of the term, it usually isn’t an issue.

MEET OUR EXPERTS

Hillary Kobayashi

Hillary Kobayashi is an insurance writer and editor specializing in insurance and finance topics. Hillary’s mission is to use her knowledge and love of education to help car owners better understand how they can save time and money on car ownership. The articles Hillary has published for Jerry span topics from state-specific bill of sale requirements to SR-22 insurance information. Prior to joining Jerry, Hillary spent over ten years in education at Pacific University and the University of Oregon.

Sarah Gray

Sarah Gray is an insurance writer with nearly a decade of experience in publishing and writing. Sarah specializes in writing articles that educate car owners and buyers on the full scope of car ownership—from shopping for and buying a new car to scrapping one that’s breathed its last and everything in between. Sarah has authored over 1,500 articles for Jerry on topics ranging from first-time buyer programs to how to get a salvage title for a totaled car. Prior to joining Jerry, Sarah was a full-time professor of English literature and composition with multiple academic writing publications.