How to Cancel Your Car Insurance (2025)

You can easily cancel your car insurance policy, though each insurer may require different steps to cancel. Some insurers allow you to cancel your policy online, but most typically ask you to speak to an agent on the phone or in person to complete the cancellation process.

You usually need to confirm your information, verify your cancellation date, and complete any necessary paperwork to cancel. You may face associated fees if you cancel, such as an early termination fee or a percentage of the remaining premium. You should always avoid a lapse between coverages to prevent potential rate increases with your future insurer.

Before you cancel your current policy, it’s a good idea to compare car insurance quotes from multiple companies to find a replacement policy that works for you.

Canceling your car insurance typically requires more than just the click of a button online. Instead, you need to follow a series of easy, though important, steps to make sure you provide your insurer with all the necessary information to formally end your policy.

1. Review your insurer’s cancellation policy

Although you can find general information on your insurer’s website, review your policy and read any fine print that may mention how you can cancel your policy. This information may also tell you if you’ll need to pay any cancellation fees or if the insurer will give you a partial refund.

You need to provide your policy number and other details when canceling.

2. Decide on a new car insurance policy

You should compare new car insurance quotes prior to canceling your policy to avoid a coverage lapse — a period of time when you have no insurance coverage. All states except New Hampshire legally require a licensed driver to carry some form of minimum liability insurance that covers expenses resulting from damages you cause in an at-fault accident.

If you drive while you have a lapse in coverage, insurers may consider you a high-risk driver because you’re technically driving uninsured, even if you have a clean record. When you do find coverage again, you’ll likely experience higher rates because of this.

Find the coverage you need for the best price available, and make the effective date of that policy with your new insurer before the final day of your current policy.

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3. Contact your current insurance company

Once you purchase a new policy to replace the old one, you need to contact your current insurance company or your agent.

Most insurers have a phone number you can call to start the cancellation process, though some may offer additional options like completing an online form, chatting with a virtual agent, or initiating the process through text or mobile app.

4. Provide written notice of cancellation

You need to provide a written cancellation notice when ending your policy prior to its term limit. Your policy documents should provide directions for how to submit a written notice of cancellation by mail.

If you’d rather submit this information digitally, speak with an insurance agent and ask them to explain all your options for formally submitting a written notice of cancellation.

5. Confirm cancellation

At the end of the process, don’t assume your old insurer canceled your policy if you haven’t confirmed the cancellation with the auto insurance company or your independent agent.

A few circumstances can delay your policy termination. You may face delays if you haven’t completed all required forms or if you owe money for prior unpaid premiums or cancellation fees. Ask the insurer to provide you with written proof of cancellation to officially confirm.

You can legally cancel your car insurance policy at any time for any reason. Depending on the state you live in and your current insurer, you may face car insurance cancellation fees.

When it comes to canceling a policy, the industry doesn’t have standard fees established. Any fees depend on insurer discretion and the limitations of state law. Connecticut, for example, doesn’t have any laws preventing an insurer from assessing a cancellation fee. The state also doesn’t require insurers to disclose these cancellation fees to a policyholder.^[1]

Cancellation charges may include a flat-rate cancellation fee or a decrease in the reimbursement amount for a prepaid premium. For instance, an insurer with a 90% pro-rata fee keeps 10% of what you initially paid. A short-rate fee allows the insurance company to recoup the costs associated with writing the policy you terminated early.^[2]

Identifying fees prior to signing a policy can help you prevent excess expenses later on. Before you commit to a policy, ask your agent to outline any cancellation fees or other similar payments you’d need to cover if you terminate the policy early.

As you submit a notice of cancellation, ask your current insurer if it can reduce or lower the amount charged. You could also ask your new insurer if it has any one-time fees that it can waive to offset the cost of switching insurers.

Will you get a refund if you cancel your car insurance?

Every company has different cancellation policies, but insurers will generally give you a refund for any remaining time you have on your policy at the point of cancellation. For example, if you paid in full for 12 months of coverage and cancel at eight months, the insurer should refund you the last four months of your policy. But any setup fees that a company may have required when you signed are typically not part of the refund.

When choosing a new company, ask your agent what their cancellation policy is, and factor that into your decision-making.

What to do if your insurance company cancels your policy

An insurance company can end your policy by cancellation or non-renewal. Cancellation occurs if you fail to pay your premium, commit fraud on your application, or face driver’s license suspension or revocation.^[3]

If your insurer cancels your policy, call the company immediately to ask for the reason for cancellation and determine if you qualify for reinstatement.

If you can’t reinstate your coverage, you should call other insurance companies immediately to find a new policy. It’s illegal to drive without the minimum state-required insurance. And a lapse in insurance can cause other insurers to consider you a risky driver, which typically results in higher premiums.

Alternatives to canceling your car insurance

If you cancel your car insurance policy without a new policy in place, it can cost you more in the future because insurers view drivers with coverage lapses as higher risk. Instead of canceling your policy, here are some other things to consider that could help you lower your rates:

• Reduce your coverage. If you have full coverage and your car is paid off, or it’s an older car, consider reducing your coverage to meet your state’s minimum liability requirements. This could save you money, but you also won’t have as much financial protection if you’re in an accident because liability insurance only covers damages and injuries to the other person — not your injuries or vehicle damages.

• Increase your deductible. Increasing your deductible from $500 to $1,000 can also lower your car insurance rates. Just make sure you’re comfortable paying the deductible amount if you need to file a claim.

• Consider a non-owner policy. If you no longer have a car but you still drive other people’s cars occasionally, a non-owner policy can protect you while you’re on the road, but it typically costs less than a traditional car insurance policy. 

When to cancel your car insurance

You may want to cancel your car insurance for various reasons, but it can be confusing to know the right time to cancel. Some common reasons to cancel your insurance include:

• You’re no longer driving. If you move to a walkable city, are a student who lives on campus, or work from home and no longer commute to the office, you may choose to sell your car and cancel your insurance. Just remember that you’d still need insurance if you drive a friend’s car or want to get a rental car.

• You’ve joined someone else’s policy. You may want to cancel your insurance if you can save money by joining someone else’s policy. Teen and young adult drivers can save money if they join their parents’ policy. Spouses can also save money if they enroll in a policy together.

• You’re switching companies. You may want to switch insurance companies if you can find cheaper rates or get better coverage for your budget. If you’re switching, you need to secure coverage from your new insurer before canceling your old policy so you don’t have a lapse in coverage.

When not to cancel your car insurance

Canceling your coverage isn’t always the right idea. If you find yourself thinking about canceling your coverage for these reasons, you may need to reconsider:

• You want to cut costs. Insurance is expensive, but most states require you to buy it if you have a car and drive. If you get into an at-fault accident without insurance, you’ll be financially and legally responsible, and you could end up paying more than you would have if you had insurance.

• You don’t need coverage for a short time. Maybe your car broke down and you’re starting to search for a new one. Or you’re going on a trip for a month or two and won’t be driving. You should still keep your coverage even if you won’t be driving for a period of time. Instead of canceling, call your insurer and see if you can pause your coverage.

• You haven’t secured a new policy. Changing your insurance is a good reason to cancel your old policy. But to avoid a lapse in coverage, you shouldn’t cancel your old insurance until you’ve secured and signed your new policy.

If you’ve made the choice to cancel your car insurance, consider these do’s and don’ts when canceling your policy.

Canceling car insurance FAQs