How to Cancel Your Car Insurance (2024)

You can easily cancel your car insurance policy, though each insurer may require different steps to cancel a policy. 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.

To cancel, you usually need to confirm your information, verify your cancellation date, and complete any necessary paperwork. 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, be sure to compare car insurance quotes from multiple companies to find a replacement policy that works for you.

How to cancel your car insurance

Canceling your car insurance is a process that 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 of the information necessary to formally end your policy.

1. Review your policy and gather information

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, so you should gather and review this information as your first step.

2. Compare new car insurance quotes

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 at all times.

Find the coverage you need for the best price available, and activate that policy with your new insurer prior to the final day of your current policy. Remember, make sure you have your new insurance in force before you cancel your existing 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 via text or mobile app.

4. Provide written notice of cancellation

You need to provide written notice of cancellation 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 agent of the insurance company 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 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.

Car insurance cancellation fees

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% prorata 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 wave to offset the cost of switching insurers.

Common reasons to cancel car insurance

An auto insurer may cancel your policy for a number of reasons, but you can also opt to cancel your policy at any time and for any reason prior to the end of your policy term.

Drivers may cancel a car insurance policy for one or more of the following reasons:^[3]

1. Cheaper premium rate: A highly saturated auto insurance market means you can typically find other insurers offering lower rates or more discounts than your current insurer.

2. Different coverage options: Not all insurers offer the same coverage options. If you need a specific type of optional auto insurance coverage, like rideshare coverage or gap insurance, you may need to switch insurers.

3. Problems with customer service: Whether it’s communicating with the insurance company or receiving claims payment, If you’re having difficulties with customer service — in regular communication or claims filing — you may want to get a policy with an insurer that has higher customer satisfaction ratings.

4. You no longer own the vehicle: If you sold your vehicle, you don't need to maintain coverage on it. But be sure not to cancel you policy until you've legally transferred the vehicle title to the new owner.

Do’s and don’ts of canceling car insurance

If you’ve made the choice to cancel your car insurance, make sure you’re carrying out this decision in the most responsible way. Consider these do’s and don’ts when canceling your policy.

What to do if your insurance company cancels your policy

An insurance company can end your policy via cancellation or nonrenewal. Cancellation occurs if you fail to pay your premium, commit fraud on your application, or face driver’s license suspension or revocation.^[4]

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 immediately call other insurance companies to find a new policy. It’s illegal to drive without the minimum state-required insurance. And a lapse of insurance can cause other insurers to consider you a risky driver, which typically results in higher premium rates.

Canceling car insurance FAQs