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  • How To Cancel An Auto Insurance Policy

    How To Cancel An Auto Insurance Policy

    As your life unfolds, there might be occasions when you just want to cancel an auto insurance policy―without replacing it with another. Perhaps you'll sell a car, and not buy a new one to take its place. Or, maybe a parent will pass away, and you'll need to halt their coverage.

    Whatever the reason, it's simple to cancel an insurance policy. But, just be sure to do so. (See our Change Providers article if you need to cancel a policy and switch to another.)

    1) Contact Your Carrier

    Call or write your insurance agent or provider, and let him or the company know you want to end the coverage and when you wish to do so.

    Don't just let the policy end without notifying the insurance company. Otherwise, the carrier 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.

    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, though, are content if you just 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, so it's easiest just to comply with their procedure.

    3) Ask for a Refund

    Several weeks or months of coverage might remain on the policy, particularly if a death is involved. If so, be sure to request a refund of the unused premiums.

    4) Alert Your 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. Just call the agency to find what you're required to do.

    Remember, you must comply with your state's financial responsibility requirements. If you're canceling an insurance policy because there's been a death, you've sold your vehicle, or your vehicle is no longer operable, you're generally in the clear; however, if it's just a matter of wanting to do business with another carrier, it's best to either line up a new policy before you cancel your old one, or keep your vehicle off the roads until you do.