How to Cancel Auto Insurance [2024]

Needing to cancel your auto insurance can happen for any number of reasons. The good news is that you can cancel your policy at any time, but it is important to know how to cancel your auto insurance correctly to avoid hidden cancellation fees and insurance lapses..

Each insurance company will have its own auto insurance cancellation policies, but most will generally want to know why you’re choosing to cancel first before seeing you leave.

How you cancel your auto insurance will also depend on the company you use because this will determine if you’ll be able to stop your policy through the website or if you’ll have to speak with an agent. You’ll also want to look into how much auto insurance is required in your state.

We’ll go over when it’s best to cancel your auto insurance policy, what questions to ask, and how you can go about canceling your policy once you’re ready.

How to Cancel Auto Insurance

Even with the rise in popularity of apps, you’ll have to talk to an agent or go the old-fashioned route of sending in a paper request depending on your company. 

There are a few different ways that you can work with your insurance company: 

• Speak with a representative. In some cases, you can work everything out over the phone. It is also a way to verify that you are who you say you are and that someone isn’t trying to fraudulently cancel your services.
• Send in a paper copy. Depending on how your insurance company operates, you may have to mail in your request. 
• Go to one of the offices. Instead of speaking to someone over the phone, you can choose to go into an agency and work with someone in person. 
• Put in a cancellation request with your new provider. Sometimes if you’re looking to cancel, your new provider will be able to put in the request on your behalf.

Canceling a car insurance policy is a normal occurrence, so there are guidelines you’ll be able to find in the event that you still have questions. Most insurance companies will have an FAQ section dedicated to answering questions on how to cancel auto insurance. 

Reasons You Might Need to Cancel Auto Insurance

There are a few different scenarios where you think you might need to cancel your car insurance policy. However, stopping your policy isn’t always the best course of action, especially if you plan on driving in the future or still own a vehicle.

The following are some examples of where you might start thinking about canceling your auto insurance: 

• You no longer have a vehicle. If you’ve sold your vehicle or didn’t re-apply for a lease, you won’t need car insurance any longer.
• You don’t plan on driving your vehicle for a while. This could mean you’re planning to put your vehicle into storage, or there are medical reasons why you won’t be able to drive for a period of time. 
• You’ve made life changes. Moving states and getting married are examples of when changes in your life can affect whether or not you need auto insurance. 
• Your financial situation has changed. Whether this means you’ve found cheaper auto insurance elsewhere or can no longer afford insurance entirely, your financial situation could call for a cancellation of your policy.

Read more: How to Change Auto Insurance Providers

Before canceling your policy, figure out when it’s best to follow through and when it would be appropriate to reduce your coverage. For example, you may want to consider getting quotes from the top auto insurance provider for people who don’t drive often if you plan on selling or storing your vehicle.

When should you cancel your auto insurance? 

Above, we mentioned a few reasons why people often think about canceling their car insurance, but doing so isn’t necessary for all of those situations. 

It would be best if you only cancel auto insurance in the following scenarios: 

• You’re switching auto insurance providers. If you’re transferring any of your existing policy information to a new provider immediately, canceling a policy you no longer want is an option. 
• You are currently paying for coverage that you no longer need. This doesn’t mean you’re canceling your entire policy, but rather help youinsurance premiums. For example, you can remove add-ons that no longer apply to your current vehicle or lifestyle for lower rates.
• You will no longer own a vehicle. If you don’t plan on driving and you’ve sold or gotten rid of your vehicle, you will no longer need car insurance. This would be a viable reason to cancel your policy.

Keep in mind that before you cancel your insurance, you’ll want to confirm with your insurance company whether there will be fees or if you’ll experience any lapse in coverage. This is especially true if you’re switching insurance companies without transferring your policy. 

Are there any consequences of outright canceling auto insurance? 

Having auto insurance is required in all states, despite the amount of coverage varying in each state. The costs of not having auto insurance could mean you lose your license, or the state may charge hefty fees to reinstate your driving privileges.

If there’s a lapse in your coverage from the time you cancel your original policy and when you obtain a new one, you’ll have what is known as a gap in your coverage. This is kept on record and can raise your car insurance rates.

The same is true if you’re leasing your vehicle, although the consequences are different. Instead of raising your rates, if there’s any lapse in coverage, your vehicle could be repossessed. (For more information, read our “What happens when your Auto Insurance lapses?“).

When You Should Not Cancel Auto Insurance

There are situations where you shouldn’t outright cancel your car insurance. For instance, if you still own a car, even if you’re not going to be driving for a short period of time, you can still have coverage to protect your vehicle. 

For example, you might want to see if you’re paying for comprehensive auto insurance coverage. Comprehensive insurance can help against things such as flooding, broken branches, or animals. If you plan on parking your vehicle in a garage or even in your driveway, this can help save you hundreds of dollars worth of damages if anything happens while you’re not driving. 

You’ll also want to look into the minimum requirements necessary in your state since coverage requirements change depending on where you live. While you can choose to carry comprehensive and collision auto insurance coverage on your policy, liability insurance coverage is required.

You don’t legally need auto insurance if your vehicle isn’t being driven, but if anything happens to your vehicle, you wouldn’t be covered. 

Another example would be if your vehicle was stolen from wherever it was parked. Without car insurance, you would have no way of recovering the costs of the vehicle or to be able to fix damages if it’s found in poor shape.

What questions should you ask when canceling your auto insurance? 

There are details you’ll want to be aware of when you cancel your policy so that you’re not taken by surprise.

If you’re canceling midway through a month you’ve already paid for, ask if it can be prorated so you’re not out any money. You’ll also want to inquire about a refund if you pay for your entire policy all at once. If you’re only six months into a year of paid service, you’ll want to use that money towards your new coverage. 

Whether or not your policy will be canceled immediately should also be discussed. Your insurance company may request that you give them notice. Otherwise, you may incur a fee. Ask if there are any other car insurance cancellation fees as well so that you don’t end up paying more. 

Read more: How to Get a Refund on Your Auto Insurance

The Bottom Line on Canceling Auto Insurance

If money alone is the problem, you may not want to cancel your entire auto insurance policy outright. By comparison shopping or talking to a local agent about the price you’re currently paying, you could end up saving money by canceling auto insurance.

By removing coverage you no longer need, or if your insurance provider offers discounts you weren’t aware existed, you can end up reducing your monthly auto insurance rates.

However, if you’re no longer going to own a vehicle or moving to a state where your current provider no longer offers coverage, canceling would be the best option. No matter the reason, canceling your auto insurance policy can be as easy as getting in touch with your insurance company. 

Be sure to ask the right questions in order to avoid late fees or other loose ends. Confirming that you canceled your policy is also a good idea so that you won’t accidentally end up paying for two different policies in the event of a miscommunication.