If you just sold your car, move to another state or found a better deal you would be asking; can I cancel my car insurance? The answer is yes and many policyholders stop their policy early because either they don’t need or cannot use it any more or they like to switch to another insurer. If you still have fair amount of time left on your policy and don’t want to wait until the renewal you can find out how to cancel auto insurance below.
Reasons for Cancelling Auto Insurance Early
No Car to Insure anymore: If you have sold your automobile and have no plans to buy another one anytime soon you would want to terminate your policy to avoid paying any more premium. If you have already paid the premium in full you would naturally be asking; can I terminate car insurance and get refunds? The answer is yes you can receive refunds for the time remaining on your policy.
Move out of State: Policies are issued based on your state’s insurance laws. When you move out of your state your old policy need to be replaced by a new policy from your new state. You may have a short period in which your old policy would be valid in your new state. If your policy don’t expire before this period you will have to stop current auto insurance mid-term and buy a new one in your new state.
Switching Auto Insurance Companies: This is a practice that can save you money. It can be triggered by a change of circumstances or just out of curiosity. Many policyholders get upset by something their current insurers have done and look into changing for the better.
Why Policyholders Switch to Other Car Insurers
Thousands of policyholders switch to a new insurer every day for various reasons. You do not have to be unsatisfied to make a decision to go with another provider. Actually, the renewal dates are set to allow time for policyholders to shop around. And companies can recalculate the premium based on the latest information and claim history. Policyholders and insurers are equally free to change their mind about the contract. But you don’t have to wait until renewal to end car insurance. Here are some of the reasons why people do switch halfway into their policies.
- Dissatisfaction with the service received from current carriers is the main reason for changing vehicle insurance providers. Sometimes we feel that we made a mistake and we aren’t going to get what we want if we stay. When you have such feeling the best is to do something about it as early as possible.
- One of the main reasons for aborting car insurance halfway is change of circumstances. You may feel you have to switch when you change your car, add a new, especially young driver or move. If the premium increased substantially after you notified the change it would mean that your insurer don’t like the changes. Then, it may be time to look somewhere else even it means you have to terminate vehicle insurance before renewal.
- Better coverage offered by a more reputable auto insurer can attract policyholders. You cannot be blamed for replacing current policy when you are offered a superior package at a lower price from a more established insurer?
How to Cancel Vehicle Insurance Early: Important Points
- Make Sure You Don’t Drive Uninsured: First of all, you have got to make sure that you are never out of cover. The new policy must be in place before you end the old one and definitely before you get behind the wheel again. It was only a short drive to the shops is not an acceptable excuse to anyone. You will end up picking the bills for all the losses suffered for this little oversight. This is a very important point to get right when switching insurers. If you cancel automobile insurance because you are taking the vehicle off the road, make sure you get it insured again before you drive next time.
- Contact the Insurer to Cancel: The old policy should be closed properly. Many people may think that the policy will be cancelled automatically if the payment is not received. Or it will not be renewed without the payment. These statements may be true for most companies. However, it is not hard to give the company a call and make sure that you will not be asked payment any more. If you don’t cancel it properly you may end up paying more premium. Also, your insurer can notify credit agencies for non-payment.
- There Is No Point in Cancelling Car Insurance after a Claim: Policyholders should think twice before switching companies right in the middle of a claim. When a claim is being processed it may be best to stay put until it is finalized to avoid complicating things. It may still be fine to make the switch at renewals even though you placed a claim (or a third party did against your liability policy). But it would be awkward to terminate a valid policy so that you can go somewhere else. Even if you do you don’t probably get any refunds for the premiums already paid and you are still liable to pay the rest of the premium if you are on an installment plan. Simply, you are liable to pay the full premium once you make a claim. Technically, your automobile insurance premium is due at the start of the policy. Insurers allow installments or cancellations to serve their customers better and it has become common practice. However, they do expect you to pay the full premium if you expect them to pay a claim.
- Contact Your Lien Holder: If you are switching insurers you should let your lender know if there is loan on the vehicle. They will probably be informed of the early cancellation and may take drastic measures like buying insurance for the car and sending you the bill, if you don’t let them know.
- Contact DMV: If you sold the car you will follow the procedure to inform the sale to DMV and this should be enough. If you are taking the vehicle off the road and storing it somewhere you need to fill “off road declaration”. If you have already bought another policy your DMV will probably pick up on that.
In order to avoid keep having to move again you can do a few things. First of all you should shop around to discover all your options. Getting one quote and being excited about it is not the right thing to do. Get all your facts together, make a few calculations, sleep on it if you have time and switch with the knowledge that you did the right thing. Nobody is chasing you to arrange your new coverage fast.