You should keep your car insurance policy in place at least until your claim is finalized. Once your claim is complete, your answer depends on whether you intend to buy a new vehicle or not.

If you plan to go carless, taking advantage of public transit,

rideshares

, bikes, or your own two feet—cancel away.

If you plan to buy a new vehicle, it may make more sense to simply remove the totaled car and

transfer insurance to your new car

rather than canceling your current policy.

The key thing to consider here is whether or not the totaled vehicle is still registered in your name. In almost every state, so long as you have a vehicle registered in your name, you’re legally required to carry at least minimum

liability coverage

to remain in accordance with the

minimum car insurance required in your state

Allowing your policy to lapse for even a day can result in significant increases in insurance rates, not to mention lapse penalties. If you have a car registered in your name, and you’re uninsured, you could be looking at driver’s license and/or registration suspension, civil fines, and

SR-22

requirements—all of which spell a lot of hassle, and a lot of out-of-pocket expenses.

MORE:

How does a car insurance lapse impact rates?

RECOMMENDED

Compare auto insurance policies

No spam or unwanted phone calls · No long forms

ZIP Code

Find insurance savings

When does canceling your car insurance policy make sense?

If you have no intention of owning a vehicle or driving a car, it makes sense to cancel your car insurance. In pretty much any other situation, canceling car insurance only makes sense if you’re

switching car insurance companies

, and your new policy takes effect before your old one expires.

Let’s take a closer look at a few situation in which it makes sense to cancel your car insurance policy:

When you move

If you’re moving to a new state where your current provider doesn’t offer coverage, you will have to cancel your policy and find a new one. Remember, your new policy should take effect before your old one ends to avoid a lapse in coverage.

However, you also want to avoid having your policies overlap, since that could lead one or both insurers to dispute the need to pay out if you get into a collision. To avoid this, let your old insurer know the date that your policy will start with your new insurer.

Also, if you’re moving to a new state, be sure to check with the DMV and your new insurance company to be sure you won’t have a lapse in the validity of your plates or vehicle registration. You can also ask about the process of registering your vehicle in your new state.

When you’re looking for a better deal

Contrary to popular belief, sticking with the same provider for years on end isn’t necessarily the best way to ensure you’ve got the best deal on coverage. In fact, experts recommend shopping for car insurance every six months to make sure you’ve always got the best policy at the best price. When you’re looking for a better deal, be sure to compare

car insurance quotes

from at least three to five providers before settling on a policy.

If you want to reduce your coverage

Most lenders and leasing companies will require you to carry

full coverage car insurance

for as long as you still owe money on your vehicle. You’ll also typically be required to maintain a minimum liability of $100,000 per person, $300,000 per accident, and $50,000 for property damage.

These limits can not be reduced while your lease is active. However, once you own your car outright, you have the option to

drop full coverage on your car

Switching providers may be a good way to save money on car insurance. Keep in mind, dropping

collision coverage

and/or

comprehensive coverage

may save you some money on insurance premiums, but it will also leave you holding the bill for your repairs if you’re at fault in an accident.

When you don’t have a car

Like we mentioned above, if you don’t have a car and you have no intention of driving, then there’s no need to carry insurance.

MORE:

Canceling your insurance when selling your car

Compare quotes from 50+ insurers with Jerry in under 45 seconds?

Find Savings!

4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars

4.7/5 app rating | Trusted by 5M+ drivers

When to keep your car insurance policy active

Even if you don’t currently have a vehicle registered in your name, it may make more sense to keep your policy active than to cancel it. Let’s consider some of the situations when you should maintain your policy:

If you’ll be driving any vehicle

Just because you don’t own a vehicle doesn’t mean you won’t be driving. If you frequently drive

rental cars

or borrow vehicles from friends, getting

non-owner car insurance

, or non-drivers insurance, makes sense. With a non-owner policy, you’ll have liability coverage that follows you no matter what you’re driving.

When you move

Just because you cross state lines doesn’t mean you have to change your insurance provider. Before you cancel your coverage, check with your provider to see if they offer coverage in the state you’re moving to. Your policy premiums will likely change, and you may be required to choose a new insurance agent, but you could remain with the same provider.

When you experience life changes

Getting married or divorced does not automatically signal the need to cancel your current coverage. You may be able to get a better deal simply by adding a spouse to your insurance or removing your ex from your car insurance after a divorce.

If you still own a car but will not be driving

Some insurance providers allow you to suspend coverage if you won’t be driving your vehicle for an extended period of time. Even if your provider does allow a suspension, be sure to check with your state’s department of motor vehicles (DMV) to see if your state laws allow suspension.

When you’re looking for a better deal

We know—we listed this as a reason to cancel your policy. However, we can’t emphasize enough the importance of keeping your policy current as long as you have a vehicle registered to you. Plus, your provider may have car insurance discounts available you don’t know about. Before you cancel or switch policies, check with your current provider and compare quotes with a few other insurance companies to see if you can lower the rates you currently have.

Will canceling your insurance policy after a total loss cancel an insurance claim?

As long as you filed your claim while your policy was still active, no—canceling your policy won’t cancel your claim. However, keep in mind that until your claim is completed, the car will still be registered in your name. That means that canceling your policy will result in that dreaded lapse in coverage we already mentioned.

MORE: Can you switch insurance companies with an open claim?

"This was and is great service!
Jerry
saved me $400 on my renewal. I was super shocked!” —Jackson M.

Let Jerry find your price in only 45 seconds

No spam · No long forms · No fees

Find insurance savings

FAQs

What happens to your car insurance policy after a total loss?

Like so much to do with car insurance, it depends. If you were at fault in an auto accident, you should expect your auto policy premiums to increase. In fact, they may increase even if you weren’t at fault—especially if your car was declared totaled in a comprehensive car insurance claim.

When it comes to your coverage, your provider generally won’t (and can’t) make changes to your policy without your express permission. That means your current coverage selections will likely remain in effect until you change them or cancel them.

Will auto insurance pay off my car loan if my car is totaled?

It depends. If your vehicle’s actual cash value (ACV) is equal to or greater than the amount paid out by your policy (or the at-fault party’s policy), then your collision or comprehensive claim payout, or the at-fault driver’s liability insurance will cover the balance of your

car loan

However, if the value of your car is less than the balance of your loan, you’ll have to pay the difference unless you carry

gap insurance

. If your policy does include gap coverage, it will pay the difference between the value of your vehicle and the amount you owe on your loan, and it may even cover your deductible.

Are you overpaying for car insurance?

Compare quotes and find out in 45 seconds.

Try Jerry