How to Cancel Your Car Insurance Policy & What to Expect

Canceling your car insurance policy is usually a straightforward process. Still, there are a couple of things you will want to look into before you take action. A little extra time doing this can save you money in the long run.

Insurers have varying requirements for terminating your vehicle coverage, and many require advance notice of cancellation. Some companies need as much as 30 days' notice before your final coverage date. It’s best to call your carrier to ensure you know the rules for your policy.

• How to Cancel Your Car Insurance policy
• When Can You Cancel?
• Reasons to Cancel
• What Happens When You Cancel?
• Disputing Cancellation Fees
• FAQs

Your policy should state whether a penalty will be applied if you cancel before your renewal date. If your plan doesn't indicate a penalty fee and your insurer charges one, you have the option to dispute it.

You can choose to cancel your car insurance policy at any time. Before you decide on a date, it’s a good idea to consider a few points, such as:

• Whether or not your insurer requires advance notice of cancelation.
• Whether you will have a new policy in effect in time to prevent a lapse in coverage.

There are various reasons you might consider terminating your car insurance policy. You might have shopped around and found a lower rate, for example, or you might be rethinking your finances after a significant life change like marriage.

Below are some common reasons policy owners consider discontinuing their auto insurance plan.

Although canceling your car insurance policy is well within your rights, you must follow the appropriate process to do so. If you don’t notify your insurer you’re terminating your plan, they’ll continue to bill you for premiums.

This can lead to a history of missed payments and result in higher insurance rates for you in the future. You may want to purchase a policy with the same insurer in the future. Following the proper cancellation protocol will help you avoid a potentially costly situation.

It’s also a good idea to ask about cancellation fees and premium refunds. “Will I get a refund if I cancel my car insurance?” is a common question for policyholders who prepay their premiums.

Some insurers will refund your entire unused premium. Others may keep a portion of the prepaid amount as a penalty before returning the remainder to you.

It’s a good idea to make sure you know your insurer’s cancellation procedures and fees (if any) and administrative costs before you terminate your policy. If you’re hit with unexpected charges, you may want to dispute them.

Start by reaching out to your provider. They can tell you the process for filing complaints and disputing charges. Make sure you keep records of any communication, like whom you’ve spoken to and when. Typically, your insurer has eight weeks to make a final decision.

There are some details you may want to consider when looking into how to cancel your car insurance policy. Here are the most commonly asked questions about the process.