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.
Need to know:
A short-rate fee is usually 10% to 15% of the total premium you agreed to pay for your entire policy term. A prorated refund, on the other hand, refunds all of your unused premium.

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, like
    New Hampshire
    , with unique options for demonstrating financial responsibility, 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:
Insurance company
Cost of standard coverage before insurance lapse
Cost of standard coverage after insurance lapse
$215
$230
$198
$200
$174
$182
$222
$225
$187
$201
$178
$191
$162
$164
$141
$149
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.
Let Jerry help you avoid a coverage lapse.
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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.

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.
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FAQ

Can my car insurance company cancel an insurance policy for nonpayment?

Yes—but most insurers have a grace period for missed payments. Check with your insurance agent if you expect to miss an insurance payment to avoid cancellation or nonrenewal. 

Can my car insurance company cancel my car insurance for reasons other than nonpayment?

Yes. If you lied to your car insurance company on your application, they can cancel your car insurance. They can also cancel your policy if your driver’s license has been revoked or suspended. 

What happens if I just cancel my car insurance?

If you cancel your car insurance without a new policy in place, your insurer will typically notify your state’s Department of Motor Vehicles (DMV) of your insurance lapse.
Driving without insurance
is illegal, and you’ll be subject to serious legal and financial consequences. You might also end up paying higher premiums if there is a gap in your coverage. 

What does canceling insurance do to my credit score?

Canceling your car insurance won’t affect your credit score, but failing to pay your insurance bill can—and driving without insurance could land you in even more serious trouble.

Meet our experts

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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.
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Sarah Gray
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Licensed Insurance Agent — Expert Insurance Writer and Editor
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.

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