When — and How — to Cancel Your Car Insurance

You can cancel your car insurance by calling your insurance company or broker and following their cancellation process.

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 potential cancellation fees.

How to cancel car insurance 

For most policyholders, policy cancellation requires three simple steps:

1. Call or email your current insurer or broker: Make sure to have your policy number on hand to ask about the cancellation process.

2. Submit your cancellation request: Some insurance providers require you to sign a cancellation letter. Be sure to ask about cancellation fees or “short-rate fees.”

3. Get confirmation of your cancellation: Some insurance companies will email you a cancellation notice while others will send it via regular mail. Upon receipt, you should confirm that the cancellation date is correct.

Do you get a refund if you cancel car insurance?

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 and if 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

Switching car insurance? It’s OK to cancel current coverage

If you’re switching policies, you should cancel your previous auto insurance — just make sure to not leave a gap in your coverage by canceling it too early.

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

Can you cancel car insurance at any time? 

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

Technically, you can purchase a six-month policy and cancel it after a week, but keep in mind that not all insurers offer refunds if you cancel mid-term. 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.

Avoid a car insurance lapse

If you cancel your vehicle insurance without replacing it, you might get into hot water. As long as you’re still driving, you should get a new policy.

Remember:Driving without insurance is illegal in every U.S. state outside of New Hampshire. If you cancel your car insurance without replacing it, you can face legal and financial repercussions. Additionally, you might have to pay higher rates in the future if you have a lapse in your coverage.

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

• If you’re moving: Even if you’re moving to a new state with unique options for demonstrating financial responsibility like New Hampshire, an existing policy is still important to have.
• If you’re storing your car: Even in storage, your car will benefit from an insurance policy. You’ll probably want to drop collision coverage and only protect it with comprehensive coverage — this is sometimes referred to as car storage insurance or “parked car insurance.” Just remember: depending on where you live, your car likely needs insurance to be registered.
• 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 on buying another car.

Rate hikes as a lapse in car insurance penalty

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. While pricing will vary, you are likely to see an increase in your car insurance rate if your history has a lapse in coverage on it.