If you pay for your auto insurance on a monthly basis, you can cancel your policy at any time by contacting your insurance company. However, there may be certain fees or penalties associated with cancelling your policy before the end of the term.
When you cancel your policy, your insurance company will typically require you to submit a written request for cancellation. This request should include your name, policy number, and the date you wish to cancel your policy. You may also need to provide a reason for cancelling your policy.
If you cancel your policy mid-term, you may be subject to an early cancellation fee. This fee is typically a percentage of your remaining premium, and it varies depending on the insurance company and state you live in. In some cases, you may also be required to pay a pro-rated amount of your premium for the time you were covered.
If you cancel your policy mid-term, you may also lose any discounts or benefits you received for paying your premiums on time or in full. Additionally, if you have a loan or lease on your vehicle, your lender may require you to maintain full coverage auto insurance, so cancelling your policy could put you in breach of your loan agreement.
Before cancelling your auto insurance policy, weigh the costs and benefits and consider any potential consequences. If you’re switching to a new insurance company, make sure you have a new policy in place before cancelling your old one to avoid a lapse in coverage.
Do I Have To Cancel My Car Insurance If I Sell My Car?
Yes, if you sell your car, you should cancel your car insurance policy. This is because you are no longer the owner of the vehicle and therefore, you are no longer responsible for insuring it.
When you sell your car, you should contact your insurance company to inform them of the sale and cancel your policy. They may ask for proof of the sale, such as a bill of sale or transfer of ownership document, so be prepared to provide this information.
It’s important to cancel your policy promptly after selling your car, as you may still be charged for premiums and coverage on the vehicle if you do not. Additionally, if you fail to cancel your policy and the new owner of the vehicle gets into an accident, you could be held liable for damages, even if you no longer own the car.
If you are purchasing a new car to replace the one you sold, you will need to purchase a new insurance policy to cover the new vehicle. Be sure to shop around and compare rates to find the best policy for your needs and budget.
How to Cancel Insurance After Selling a Car
To cancel your car insurance policy after selling your car, follow these steps:
- Contact your insurance company: Call your insurance company or go online to their website to begin the cancellation process. You may be asked to provide information such as your policy number, name, and contact information.
- Provide proof of sale: Your insurance company may require proof that you have sold the vehicle. This could be in the form of a bill of sale or transfer of ownership document. Be prepared to provide this information.
- Request cancellation: Let your insurance company know that you would like to cancel your policy effective on the date you sold the vehicle. Be sure to confirm that your policy has been cancelled, and that you will no longer be charged any premiums.
- Return your plates and registration: Depending on your state’s laws, you may be required to return your license plates and registration to your local DMV or motor vehicle agency. Be sure to follow the appropriate steps to avoid any penalties or fines.
- Get a refund: If you have paid for your policy in advance, you may be entitled to a refund for any unused portion of your premium. Check with your insurance company to see if you are eligible.
Here are some examples of common car insurance cancellation policies for companies in Canada:
- TD Insurance: TD Insurance allows customers to cancel their policies at any time. If you cancel before the policy’s expiration date, you may be subject to a penalty fee.
- Intact Insurance: Intact Insurance offers a flexible cancellation policy with no fees or penalties for cancelling mid-term. You will only be responsible for paying for the days you were covered.
- Aviva Canada: Aviva Canada allows customers to cancel their policies at any time. If you cancel before the policy’s expiration date, you may be subject to a penalty fee.
- Co-operators: Co-operators offers a flexible cancellation policy with no fees or penalties for cancelling mid-term. You will only be responsible for paying for the days you were covered.
- Desjardins Insurance: Desjardins Insurance allows customers to cancel their policies at any time. If you cancel before the policy’s expiration date, you may be subject to a penalty fee.
Will My Auto Insurance Be Refunded If I Cancel My Policy?
If you cancel your auto insurance policy mid-term, you may be entitled to a refund for the unused portion of your premium. However, the amount of the refund and the process for obtaining it can vary depending on the insurance company and the state or province you are in.
When you cancel your auto insurance policy, your insurance company will calculate the amount of your refund based on the time left on your policy and the amount you have already paid. Some insurance companies may charge a cancellation fee, which could reduce the amount of your refund.
If you paid for your policy in full, you may receive a pro-rated refund for the unused portion of your premium. If you pay for your policy on a monthly basis, you may receive a refund for any future payments you have made but have not yet been charged for.
To obtain your refund, you will need to contact your insurance company and request it. They may require you to provide documentation, such as proof of cancellation and your policy number. It’s important to note that the process for obtaining a refund can take several weeks, so be prepared to wait for your refund to be processed.
If you are switching to a new insurance company, be sure to have your new policy in place before cancelling your old one to avoid a lapse in coverage.
Why Would You Want to Cancel Your Monthly Car Insurance Policy?
There are a few reasons why someone might want to cancel their monthly car insurance policy, such as:
- Selling the car: If you sell your car, you will no longer need insurance for that vehicle and may want to cancel your policy.
- Finding a cheaper policy: If you find a cheaper car insurance policy with another company, you may want to cancel your current policy and switch to the new one.
- No longer driving: If you no longer drive or have access to a vehicle, you may want to cancel your car insurance policy.
- Moving to another country or state: If you are moving to another country or state where your current insurance company does not offer coverage, you may need to cancel your policy and find a new insurance provider.
- Dissatisfied with current coverage: If you are unhappy with the coverage or service you are receiving from your current insurance company, you may want to cancel your policy and switch to a different provider.
What Happens If Your Car Insurance Gets Cancelled?
If your car insurance policy gets cancelled, it can have several negative consequences, including:
- No coverage: If your car insurance policy is cancelled, you will not have any coverage for damages or injuries you may cause while driving. This means that if you get into an accident, you will be responsible for paying for any damages or injuries out of pocket.
- Legal consequences: Driving without insurance is illegal in most states and provinces, and if you are caught driving without insurance, you may face fines, license suspension, or even jail time.
- Difficulty getting insurance in the future: Having your car insurance policy cancelled can make it difficult to obtain insurance in the future, as it may be seen as a red flag by insurance companies. You may be considered a high-risk driver and may have to pay higher premiums for insurance coverage.
- Negative impact on credit score: If you have outstanding payments on your cancelled car insurance policy, it could negatively impact your credit score. Failure to pay your insurance premiums could result in debt collection efforts, which could harm your credit score.
How to Cancel Car Insurance without Charges
If you want to cancel your car insurance without being charged a cancellation fee, there are a few steps you can take:
- Review your policy: Before cancelling your car insurance policy, review the terms and conditions to determine if there are any penalties or fees for cancelling mid-term. Some insurance companies may charge a fee for early cancellation, while others offer a grace period or pro-rated refund.
- Plan ahead: If you know that you will be cancelling your car insurance policy in the future, plan ahead and give your insurance company plenty of notice. This will allow them to process your cancellation request and avoid any last-minute fees or penalties.
- Provide proof of new insurance: If you are cancelling your car insurance policy because you have found a new insurance provider, provide proof of your new insurance coverage to your current insurance company. This will show that you have obtained coverage elsewhere and may help you avoid cancellation fees.
- Be persistent: If you are having trouble cancelling your car insurance policy without being charged a fee, be persistent and keep following up with your insurance company. You may need to escalate your request to a supervisor or manager to have the fee waived.
- Consider the timing: If you are cancelling your car insurance policy mid-term, consider the timing. Cancelling at the end of the billing cycle or policy period may help you avoid fees or penalties.