Is There a Fee to Cancel Auto Insurance?

You can always cancel your car insurance at your renewal period, but your auto insurance company may have a fee to cancel auto insurance early. Fees to cancel car insurance can range between $25-$50, but you may have hidden fees that aren't disclosed until you officially cancel. There is a fee to cancel GEICO car insurance, among others, so it's safest to wait until your renewal period. In the meantime, start shopping around for free auto insurance quotes online. Enter your ZIP code below to get started.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Insurance Feature Writer Rachel Bodine

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jun 6, 2022

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There are a number of reasons why you might want to cancel your car insurance. Some people are switching to a new insurance provider. Others are getting rid of a vehicle altogether. Some are just tired of paying the insurance premiums or dealing with a disreputable carrier. When you cancel car insurance, however, you may have to pay a fee.

Do you have to pay a fee to cancel car insurance? What kinds of fees will your insurance company charge to cancel car insurance? Today, we’re explaining everything you need to know about canceling car insurance.

Some Insurers Charge a Fee, While Others Do Not

Most insurance companies make it easy to cancel car insurance. Depending on your state and your insurance company, however, you may have to pay a fee.

Fees vary widely between insurance companies.

Some insurers charge no fee whatsoever, allowing you to cancel car insurance without penalty in minutes online. Other insurance companies charge fees to cancel your policy. Some charge a flat rate fee of $25 to $50. Others charge a fee based on a percentage of your policy – like 10% of your remaining premium.

Today, most of America’s largest car insurance companies no longer charge cancelation fees.

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How Cancelation Fees Work

There are a few different types of cancelation fees in the car insurance world today, including all of the following policies:

  • Flat rate fees of $25 to $50, regardless of when you cancel your insurance contract or how many months are remaining on your policy
  • Hidden fees that aren’t transparently disclosed until you actually cancel your policy, although typically these are small fees of under $50
  • No fee whatsoever, regardless of when you are canceling your policy
  • A fee of 10% of your remaining insurance premium
  • A flat rate cancelation fee only if you owe more than a certain amount on your car insurance – say, $300 or more

Which Insurance Companies Charge Cancelation Fees?

Auto insurance cancelation policies vary widely across the industry. Depending on your state and your insurance company, you could pay hefty cancelation fees or no fees whatsoever. Some of the major insurance companies and their cancelation policies include:

Many of America’s biggest car insurance companies, including Allstate, GEICO, Liberty Mutual, Nationwide, State Farm, The Hartford, Travelers, and USAA, do not charge a cancelation fee, although you may have to pay pro-rated premiums over the next 30 days until your policy is officially canceled

21st Century Insurance and Esurance charge a $50 flat rate fee to cancel car insurance in most states

Mercury’s cancelation fee is 10% of your remaining premium, plus an additional $30 penalty if you still owe $300 or more on your policy

GMAC has a cancelation fee of $0 to $50, depending on your state

Most Insurance Companies Want at Least 30 Days Notice

Most of America’s largest car insurance companies do not charge insurance cancelation fees. However, there’s a small catch: most insurance companies also want at least 30 days notice before officially canceling your policy.

Let’s say you’re in the third month of a six-month insurance contract with GEICO. You want to cancel your car insurance policy because you found a new provider. GEICO may cancel your policy without penalty, although you will need to pay pro-rated car insurance premiums for the next 30 days until your policy is officially canceled.

If you have paid for your car insurance upfront, or if the insurance company does not have a 30 day waiting period, then your insurance company might actually give the money back to you. You might receive a refund on any premiums paid after you no longer needed coverage.

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Other Things to Know When Canceling Car Insurance

  • Don’t cancel your current car insurance until you have a new policy picked out; you don’t want your insurance coverage to lapse. Most car insurance companies allow you to choose the date your new policy goes into effect.
  • Once you cancel your current auto insurance policy, it may expire immediately. Or, you may have to wait 30 days. Make sure you’re not doubly insured, paying for two insurance policies at the same time while you wait for your current policy to get canceled.
  • Don’t forget to get your money back. Most car insurance companies will refund any money pre-paid towards your car insurance premiums, although some car insurance companies might ‘forget’ to send the money to you.


Ultimately, most of America’s largest car insurance providers have no cancelation fees, making it easy to switch to a new provider if you find a cheaper rate.

However, some insurance companies continue to charge cancelation fees. And, most insurance companies will require at least 30 days notice. You may have to continue paying for your current car insurance policy for the next 30 days even after you cancel your policy. Insurers will pro-rate this amount over a 30 day period.

Overall, it’s easy to cancel car insurance. Depending on your state and your insurance company, you may not even pay an auto insurance cancelation fee.

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