How to Cancel Car Insurance

Once you cancel your car insurance, your coverage will stop after the notice/grace period is over, which differs by company. The notice period is how long after the company receives notice of cancellation it has to end your coverage.

What Happens If You Stop Paying Car Insurance Premiums?

If you stop paying your premiums, legally, your insurance provider can cancel your insurance, meaning you won’t be covered. As you’ll see below, in most states, insurance providers can notify you of cancellation for nonpayment anywhere from 10 to 59 days before the effective date of cancellation.

When your insurance company cancels your policy, it will no longer cover your vehicle. That means that if you get into an at-fault accident and cause bodily injury or property damage, or if your car is stolen or vandalized, you’ll have to pay out of pocket.

Additionally, every state requires car insurance except New Hampshire and Virginia, so if you’re driving an uninsured car, you may be breaking the law. See your state’s auto insurance requirements in our complete guide to auto insurance.

While insurance companies can choose to cancel your policy mid-term, they can also choose to not renew your policy once the term is up. What’s the difference between cancellations and nonrenewals?

Cancellation

Auto insurance providers can cancel policies anytime within the first 60 days of the policy. After the first 60 days, the insurance provider can cancel the policy in certain circumstances only:

• You don’t pay your premium (nonpayment).
• You have committed fraud or misrepresentation on your insurance application.
• Your driver’s license has been suspended or revoked.

Nonrenewal

Alternatively, your insurance company can choose not to renew your policy once it expires. Still, the company will have to notify you of a nonrenewal along with the reason. It could be because you got a DUI or because the company wants to write fewer policies in your area; the reasons aren’t mandated by law, unlike cancellations.¹

Every state has laws on the amount of time that insurance companies have to notify you before they cancel or decide not to renew your policy. See below for the laws in your state.

Technically, you can cancel your auto insurance at any time. However, if you cancel your policy mid-term, remember that your provider might charge a cancellation fee, depending on your company and policy.

Will I Get a Refund?

Also, if you paid in advance, like in a six-month or annual policy, you may not be able to get refunded.

There’s also the question of whether or not canceling your insurance policy is a good idea in the first place. We’ve broken down when canceling is ideal and when you should stick with your current provider.

When to Keep Your Car Insurance Policy

• You can’t find any cheaper rates elsewhere.
• You are benefiting from being a long-term customer through a discount.
• You are happy with your current coverage and customer service.

When to Cancel Your Car Insurance Policy

• Switching your car insurance will save you money, whether that’s because your marital status has changed or you’re eligible for better discounts elsewhere.
• You want to bundle all of your insurance policies, such as home insurance, life insurance, etc., with one provider.
• You won’t be driving, because you’re either selling your car or putting it in storage for more than 30 days.
• You can’t afford your current premium and/or deductible.²
• You need coverage that your current provider doesn’t offer.
• You want better customer service.
• You moved and your current provider doesn’t have service in your new state.

Ready to switch your auto insurance? Here’s a step-by-step guide on how to swi

tch car insurance:

• Compare rates: To get lower car insurance rates, compare quotes from different car insurance companies using the same information each time.
• Apply for policies: Apply for insurance policies to see your actual rates, not just estimates.
• Pay premium: Once you’ve chosen your provider, pay your premium and coverage will start on your policy’s effective date.
• Cancel your previous policy: Contact your former insurance agent or company and cancel your old policy once your new policy’s effective date has passed to prevent a lapse in coverage.