Auto insurance policy
There are several reasons to cancel your current car insurance policy outright. For example, you might be prompted to cancel if:
Otherwise, you might simply wish to switch your car insurance to another provider. For example, if:
How to Cancel Your Car Insurance Effectively
1. Let the company know when you want to end the policy. Don't just let the policy end without notifying the insurance company. This is not only good policy but also gives your insurance agent an opportunity to offer you a discount or a policy that works for you now.
If you don’t notify your carrier, it will continue to send bills, and likely follow those up with phone calls or letters. That will eventually stop, but the insurer could mark the account for non-payment, and report this to the credit agencies. You could also face higher car insurance rates in the future.
2. Follow their lead. Insurance companies handle cancellations differently. Some might ask you to sign a company document, formally indicating the desire to stop coverage. Others want you to write a letter stating your intent, or talk to an agent or customer service representative about it. Carriers have established ways of dealing with this matter that they can walk you through.
3. Ask for a refund if you have weeks or months left on the policy. This is especially likely if you are canceling your auto insurance for an unexpected reason, such as a death in the family. If there is time left on the policy and you already paid for the entire year, you may be entitled to a refund.
4. Contact your lienholder. If you’re still making payments on your car, you are usually obligated to maintain certain coverages such as comprehensive and collision. Let your lienholder know that you are switching car insurance policies.
5. Contact your state’s DMV. Depending on where you live, you might have to inform your state's motor vehicle department about the car insurance cancellation and the reason for it. You might also have to turn in the vehicle's license plates and registration tags.
6. Cancel automatic payments. If you’re using electronic funds transfer, make sure to stop these payments.
Consequences of Letting Your Car Insurance Lapse
All states require you can show proof of financial responsibility should you get in an accident. Car insurance is the easiest way to fulfill this requirement.