Canceling your auto insurance coverage might seem like an extreme thing to do, especially because auto insurance coverage is an absolute must-have in the United States, however, there are many legitimate reasons for doing so – you could have found a better deal somewhere else, or you’re no longer driving a vehicle.
The process isn’t complicated at all – if you know what you’re doing. This article will lay out the steps you must take to ensure a successful cancellation of your auto insurance policy.
1. Determine if your current auto insurance has early-cancellation charges
There are some auto insurers that dictate that their clients must be aboard with them for a certain number of years before they are allowed to cancel their auto insurance policies. If you cancel early, you might be slapped with extra charges. Wouldn’t that defeat the purpose of you switching to another auto insurer for cost savings?
2. Determine which auto insurer you’ll like to switch to
Besides the fact that it is mandatory you have auto insurance coverage when you’re driving a vehicle, being always insured will help you drive premiums down when you switch to your next auto insurer. After canceling your auto insurance coverage, you’ll find yourself facing higher premiums and deductibles if there is any period where you are not covered by any auto insurance policies. Auto insurers see this as a sign that the client they’re insurer is “high-risk”.
To ensure that you don’t have any gaps between canceling your auto insurance coverage and the implementation of your new auto insurance, ask your new insurance company about the date which your new coverage kicks in, and plan accordingly.
3. Inform your current auto insurance provider
After completing the previous two steps, you must now contact your auto insurance provider about canceling your auto insurance coverage. If you have an auto insurance agent assigned to you, contact them, and they should help you do the rest.
If not, give your auto insurance provider a call. Do not leave a voice mail if no one picks up! They will ignore your request to cancel your current auto insurance coverage because they’re unable to verify who you are.
After the call, you might need to send an insurance cancellation letter for them to document the cancellation. Your current insurance company will advise you on what you must include in the letter and if you even need to send the letter. Some simply allow cancellation over the phone or online.
The below details should be included in your letter:
- Your name, and the names of those that are insured under your current auto insurance policy
- Your auto insurance’s policy number
- The name of your auto insurer
- When you wish to cancel your auto insurance (make sure it corresponds to the date your new auto insurance coverage starts!)
- Signatures of those insured under your current auto insurance policy
There might be other steps and procedures that you must go through before they can process your insurance policy cancellation. Consult your individual auto insurance company to know about these procedures.
4. Getting Refunds
There are a few options to pay your premiums in, and if you’ve paid your premiums in advance for coverage over a certain period of time, it’s a good time to request refunds on these payments. For example, if you’ve paid for a year in advance, and you decide to go ahead with canceling your auto insurance coverage 1 month into this payment period, you should be able to get at least 11 months’ worth of premium back.
You should contact your auto insurance company for advice on how to get your premiums refunded to you; different insurance companies have different ways of doing this.
5. Notifying DMV
After canceling your auto insurance coverage, you must notify DMV about this cancellation. This will allow them to update, in their database, the current auto insurer that you are with. Again, the steps and procedures to go about this vary from state to state; you must consult your state’s DMV, or ask your insurance agent for help with this step.
Last words on canceling your auto insurance coverage…
Canceling your auto insurance coverage isn’t difficult or even that complicated. However, different companies have different ways of doing things and different procedures to follow – you must contact your current auto insurer personally to find out the exact steps to take to cancel your auto insurance coverage. For more information about your insurance company, including contact information, visit our Auto Insurance Companies Guide.