How to Cancel Auto Insurance (2024)

You might need to know how to cancel auto insurance if you’re moving to a new state, are recently married, or just sold your car.

Can I cancel my auto insurance at any time? Yes, you can cancel auto insurance whenever you wish. Call your insurance company directly to start the cancellation process, but shop around for new coverage first.

State insurance laws determine how much auto insurance you need to drive, and you could lose your driver’s license if you cancel a policy without new coverage. You’ll also see your insurance rates go up.

You must take steps when canceling car insurance, and your insurer may also require you to pay a cancellation fee. Keep reading to learn how much it costs to cancel auto insurance, and follow the five easy steps to cancel your policy today.

Ways to Cancel Auto Insurance

Most insurance companies offer a variety of ways for drivers to change or cancel their coverage, including:

• Over the phone. Contact your insurance company via the number on your insurance card and ask to speak with an agent about canceling auto insurance.
• By mail. Your insurer may require you to mail or fax cancellation documents directly to them to terminate coverage.

• Visit an agent. Cancel auto insurance and sign all documents in person by visiting your company’s local insurance office.
• Through your insurance company. If you are switching auto insurers, ask your new insurance company to initiate the process for you.

Your current insurance company may try to convince you to stay and offer discounted rates or additional benefits. You can use this to your advantage and negotiate for cheaper coverage or cancel your insurance.

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How to Cancel Auto Insurance

It’s very easy to cancel auto insurance. To begin the process, contact your insurer through one of the methods discussed above and follow these steps to cancel your car insurance.

• Step One – Contact your insurance company. Depending on your insurer, you may be required to give a 30-day notice.
• Step Two – Pay any cancellation fees. Some insurance companies charge a fee to terminate coverage before renewal, so be prepared to pay upfront.
• Step Three – Sign the cancellation letter. This official document formally ends your coverage with the company.
• Step Four – Receive confirmation. Once the insurer processes your cancellation, you should receive a confirmation letter in the mail or via email.
• Step Five – Ask for a refund. You might be entitled to a refund if you paid your auto insurance rates in full.

Can you cancel auto insurance online? Depending on your insurer, you may be able to start the cancellation process online or through a mobile app. 

However, you must speak with an agent and sign an auto insurance cancellation letter to cancel coverage officially. You may sign cancellation documents online, or you may have to sign them in person at an office.

Auto Insurance Cancellation Policies

Each insurer will have its own rules regarding how to cancel, and local insurance laws also limit how and when you can terminate coverage.

For example, your auto insurance company will notify the state DMV when you cancel coverage. The DMV will then reach out to you for proof of new insurance or that you no longer own or are storing the vehicle. In addition, you may have to return your license plates if you no longer own the vehicle.

Can I cancel my insurance at any time? You can cancel your policy at any time, but you may be charged fees.

Pay attention to your company’s cancellation policies and ensure you are following the right procedure to cancel. When in doubt, read over your policy and speak with an agent.

Auto Insurance Cancellation Fees

Some companies will charge a fee to cancel auto insurance. These fees are dependent on state laws and company preferences.

It can cost anywhere between $20 and $50 to cancel car insurance. Other insurers may charge 10% of the remaining rates if you pay monthly or bi-annually.

The companies that don’t charge auto insurance cancellation fees are:

• American Family
• Allstate
• Erie
• Farmers
• Geico
• The Hartford
• Nationwide
• State Farm
• USAA

Do I get a refund if I cancel car insurance? Fortunately, if you paid your auto insurance in full, your insurance company will use that payment to cover cancellation fees and refund the remaining amount to you.

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You Can Cancel Auto Insurance at Any Time

Most companies will allow you to cancel car insurance at any time before your renewal period. Still, there are some general rules to follow regarding when to cancel and when not to cancel your auto insurance policy.

When to Cancel Auto Insurance

There are many good reasons to cancel car insurance, including finding cheaper rates and better coverage.

For example, if you find more affordable coverage and want to cancel your current policy to switch auto insurance companies, have the competitor’s quotes handy when talking to your insurer. Your insurance company will likely ask you why you want to terminate your policy and may offer you better rates to entice you to stay.

This is one of the best ways to get cheap auto insurance after canceling a policy. However, there are many instances when you need to cancel coverage that has nothing to do with rates.

These are other common times to cancel auto insurance:

• Moving to another state. Insurance laws vary by state, and you might have to change your policy or insurance company to meet local minimums.

• Changing your marital status. Married couples pay different rates than single drivers, and you will need to update or cancel your coverage after a marriage or divorce.

• Putting a vehicle in storage. If you don’t plan on driving your car, you can cancel your policy or buy reduced coverage.

• Canceling coverage you don’t need. You can cancel full coverage insurance and buy liability-only on older vehicles or cars you have already paid off.

• Selling a car. transfer auto insurance when you buy a new car.
• Bundling policies with another company. Canceling auto coverage to buy a policy with your current homeowners or renters insurance company can help you save money with bundling discounts.

Keep in mind that state laws might require you to carry comprehensive coverage for a stored vehicle, even if you don’t plan on driving it. Fortunately, you can earn discounts on auto insurance if your car is in storage without canceling coverage, so check with your company before you cancel any policies.

As with stored vehicles, you do not want to cancel auto insurance if your state laws require you to have coverage. Every state except Virginia and New Hampshire requires drivers to carry some level of liability insurance to drive legally. Other states may require more insurance, such as personal injury protection (PIP) or uninsured motorist coverage (UM).

Do I need to cancel car insurance? Consider the following and do not cancel your auto insurance policy if:

• You own and regularly drive a vehicle.
• You regularly drive friends, family members, or work-related vehicles.
• You don’t have another policy with another company.

Failure to have adequate insurance coverage in your state can cost you your driver’s license and vehicle registration.

If you don’t own a vehicle, you still need auto insurance if you plan to drive someone else’s car. Non-owner auto insurance policies cover you in any vehicle, but most only offer liability insurance. You may need to shop around and compare quotes from multiple companies if you need more coverage.

Final Thoughts: How to Cancel an Auto Insurance Policy

The best way to cancel auto insurance is to call your insurance company and initiate the process. Do not start to cancel your current insurance if you don’t have another policy lined up. Car insurance is required in 48 states, and you can lose your license and vehicle registration if you are caught driving uninsured.

Call your company or visit a local insurance office if you need to cancel your auto insurance. Sign the car insurance cancellation letter and request confirmation before you leave or end the call. Once you have confirmation, you can request a refund if you paid your premium in full.

Before you cancel, shop around for new coverage by comparing auto insurance quotes online from multiple companies in your area. Enter your ZIP code below to start comparing rates for new coverage today.

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