There can be a time policyholders need to cancel car insurance policies. At that time they should mind a few points to avoid any issues later on. Most companies will not have problems with auto insurance cancellation and they are obliged to refund the unused portions of premiums paid. People should communicate with carriers throughout the process of cancelling and confirm that it has actually been done.
Why Would Anyone Want to Abort Car Insurance Coverage?
There are a few perfectly good reasons for terminating vehicle insurance.
Selling the Insured Automobile: is the first and obvious one. People sell, scrap or donate cars all the time. If they do not have plans to buy another one shortly they would need to cancel auto insurance for sold vehicles. It would be waste of money to keep paying premiums and they could use premium refunds for something else, in case full premium was paid already.
Moving to Another State: may require drivers to rearrange their vehicle insurance needs. If the current insurer is not operating in the new state there is no choice but to stop car insurance policy and buy another one. Sometimes, changes in circumstances like buying a different type of car, moving and adding drivers can force policyholders to cancel their current coverage and seek more competitive ones.
Companies can sometimes be funny the way they see the risk. For example, they would be very happy to insure an older couple. However, they would increase the premium to unreasonable levels when the couple’s children come to driving age.
Finding Better and Cheaper Car Insurance: can be a good reason to switch insurers too. Sometimes rival companies can run special offers and discounts as part of a push to win over more new customers. If you feel comfortable with the provider of cheaper automobile insurance rates why would you not want to change? It is not every day that you would have the chance to buy something better at a lower price.
When Is the Best Time to Switch Auto Insurance Companies?
If your hand is forced to stop automobile insurance that would simply be the time to do it. If you are able to give notice it can save you money. Some companies may require notice and if it is not given they may charge fees. Others charge fees regardless of how much notice you give. The fees are normally very reasonable and should not cause much of a concern. At least they are unlikely to be large enough to make you change your mind and stay put.
One thing is essential here and that is to make sure you have alternative coverage in place before cancelling auto insurance when you still have the use of the car. Losing few bucks in the process may worry you but losing the coverage altogether should be avoided.
The best thing to do is to call up the company and talk to an agent. They will most likely be able to arrange the cancellation. Also, you may be able to talk them out of charging you a cancellation fee. If you have a good enough reason and good relations with the company they should let you go with fond memories.
Motorists should not assume that the policy will be cancelled when they stop paying the premium. This would be the case with most companies but it is only fair that you tell them. Some companies can give you a grace time of couple of weeks and keep sending you reminders. There is no need to lead them on if you have already moved to another alternative.
If you are swapping vehicle insurance companies you should follow the steps discussed in that post. This way, you will avoid any problems with coverage and don’t lose money in the process.