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When to Drop Car Insurance

Written by W. Lane Startin. Posted in Research Last Updated: 03/09/2011

How to drop car insurance, dropping a car you’re no longer driving, switching companies, and what to do if there’s a problem.

When this happens, it's time to drop your car insurance.

Much is written on how to get car insurance in the most expensive manner possible. However, little is out there on when to drop car insurance, and how to do it.

It’s a relatively simple process, but it’s not always straightforward. The most important part about dropping car insurance is to keep good records.

How to Drop Car insurance

Logically, the main reason to drop car insurance is when you’re no longer driving the car in question. This can be for any number of reasons including you’ve sold or otherwise transferred ownership of the car, if the car is no longer driveable due to a prior accident. The other reason to drop car insurance is if you’re switching companies. What you don’t want to do is simply assume your insurance will cancel itself. You have to be proactive.

Car insurance is typically paid 30 to 45 days in advance. By simply letting your coverage lapse, you’re effectively covering a car you’re not driving for that period of time. Regardless of whether you have a personal or commercial policy, you want to let your agent and company know of the change ASAP.

Dropping Insurance on a Car You’re No Longer Driving

When dropping car insurance, make sure you inform your agent of the make, model and VIN of the car in question so it matches up with his or her records. Tell them the exact date you wish to no longer cover the car as well so you can be refunded correctly. Agents add and drop vehicles all the time, so don’t feel like you’re putting them out with your request — after all, it’s their job.

If your car is totaled in an accident it may (and should be) be dropped automatically, but don’t simply assume it is. Consult with your agent to be sure. Also make sure that any other vehicles you have stay on the policy. It’s a good idea to review your coverages periodically even if you don’t have any problems or changes.

Changing Companies

In an instance where recent car insurance advertising campaigns actually speak the whole truth, car insurance indeed does not have to be canceled at renewal. You have the right to cancel at any time for any reason or for no reason at all. To that end if you find a better deal, there’s no reason not to go for it.

Canceling mid-term can be a bit messy, however. You won’t get a refund on your unpaid premium from your old company right away, but your new company will expect its startup premium right away. Be sure you have enough to compensate for this

If You Have Problems

If you find your agent is unresponsive to your car insurance cancellation requests you can contact the company directly. If necessary you can fill out the consumer sections of an “Acord Cancellation Request/Policy Release” form and present it to the company. This form is a generic insurance cancellation form all companies and most agents are familiar with. Failing that, you should take the matter to your state insurance commission, however that should be an extremely rare occurrence.

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W. Lane Startin

Lane is a former insurance agent with two well-known and highly rated companies. He left the world of insurance sales to return to his first love, writing. He enjoys helping people unravel the intricacies of insurance without the bias created by working for commission. He's a graduate of Idaho State University and by extension a long-suffering Bengals fan. Lane blogs at Car Insurance Guidebook.

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