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How to Cancel Auto Insurance

Written by Michele Wilmonen. Posted in Research Last Updated: 03/27/2011

What you need to do before you cancel your auto insurance, dealing with the left over billing and finally cancelling your policy.

A Cancelled Policy

Before cancelling your old policy, get new coverage in place.

Regardless of how long you have been with an insurance company, there comes a time that it is just better to say goodbye and to part ways. It could be because you are tired of paying such high insurance premiums.

It’s possible that the customer service you have had to deal with recently is not exactly friendly. No matter what your reason may be, you are not obligated to stay with your insurance company. But, before you cancel your policy for greener insurance pastures, there are certain steps in how to cancel auto insurance.

Shop Around Before you Cancel

If you are getting ready to blow a fuse due to the conversation that you are in the middle of with one of your insurance company’s rude call center agents, summon all of the strength you have left and refrain from yelling out, “Cancel my policy right now!” Instead calmly finish the conversation, hang up the phone and immediately start shopping around for a new policy.

Have a copy of your policy in front of you so that when you are getting quotes you can make sure that you are getting the price for the same exact coverage that you have now. If you don’t know your coverages, you may be getting a cheaper quote from a different company because they are quoting for less coverage. Also ask around to friends to see who they are insured with and find out what their customer service and claims experience have been like with their companies.

Settle the Billing Before you Cancel

Go back to your insurance company or agency and find out how your billing is set up.  If you are a “full pay” customer, you are paid in full until your policy comes up for renewal. If you are on a “two pay plan” or a “monthly payment plan” your insurance could be paid up to any date of your current policy term. If your insurance company or agent cannot tell you exactly what day you are paid up until; at least find out if you are paying ahead or behind on your policy.

Knowing when you are paid up until will help you decide when to cancel your insurance policy. You can opt to have the new policy start when the old policy expires instead of renewing it or if you want to leave the company right now, knowing that you are paying behind will prepare you for getting a bill for coverage up to your cancellation date.

Replacing Coverage Before Cancelling

Go back to the new insurance company that you decided to go with and purchase your new policy. You have now decided when you want it to start and you are ready to get it in place. This is a very important step as most states will track when you have cancelled your insurance and you can be fined or lose your license if you don’t get a policy to replace the one you have. By doing this all in advance you will save yourself the trouble of any of this happen.

Finally Cancelling Auto Insurance

Once your new policy is in place, contact your old insurance company and let them know that you want to cancel your policy and when. Most companies will cancel your policy for you over the phone, but some will require that you visit your insurance agent and sign cancellation papers. No matter what they require, just follow the directions that they give you and move on. It’s that simple.

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Michele Wilmonen

Michele’s first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she’s earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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