There are many reasons why you might choose to terminate your current car insurance policy. It could be due to the fact that you no longer own the vehicle, you’ve had an accident and it has been totaled, or you are simply fed up with your insurance company and you want a change. Regardless, you need to understand exactly how to terminate your car insurance policy and those steps appear below so that you can first educate yourself and then take the necessary steps to cancel your auto insurance policy.
The problem that many people face is that terminating an insurance policy can be different from company to company, they get confusing information during the process or they find it difficult to find the necessary information in they are searching the website of the company they use.
Fortunately for you, this guide will help you terminate your policy correctly, and if needed, find a policy from a company that you will be satisfied with (just enter your zip in above to compare car insurance).
Step 1 – Protect Yourself
The first thing that you need to understand is that if you are cancelling your policy on a vehicle that you still own, then you need to have another policy in place from another company before you do it. Legally, you are not allowed to allow one policy to lapse (or to cancel the policy) without having other coverage arrangement. No, it isn’t enough that you intend to purchase another policy, you must arrange for it first.
If you aren’t sure which insurance company you want to switch too (if applicable) then you can schedule a termination date to give you time to find other insurance. You can contact your insurance company and tell them that you want to terminate your insurance in a day, a week a month and so on; you can set the date for any one that you like.
Many people do not realize that if they have already paid their premiums that they are entitled to get any monies paid that were not applied to actual coverage (in other words, coverage has not yet occurred). For example, if you pay $100 a month for your coverage and you decide two days into the month that you want to terminate the policy, then the insurance company will have to send you a check (or a direct deposit) for around $90. The further you are into the month the less money you will get back, so make sure that you cancel when you have new coverage so you aren’t paying for duplicate coverage from different companies.
Step 2 – Who to Contact
For many people, this is the most confusing part. Perhaps you have seen the commercials from the auto insurance company that says that they will cancel your auto insurance for you because breaking up is hard to do. The question is: can they cancel your policy for you? The short answer is no, only you can cancel your policy, but what they can do for you is provide you with the necessary forms to fill out and they can send them for you. Most insurance companies actually offer this option, but it is up to you if you are comfortable with allowing someone else to handle this for you.
If you choose to take care of the termination yourself, then you will want to do two things. First you will want to contact your insurance company and speak to an agent. Note the date, time and the name of the person that you speak with. You will want to tell the agent that you want to cancel your policy. In most cases they will ask you the reason why. If you are unhappy with their service, feel free to detail them on your issues. Not only will this help their company with future clients, but they may offer you a discount or a refund because of your issues (depending on what they are).
Every insurance company will require that you inform them in writing that you want to terminate your policy. Some companies, like Progressive, require you to contact their customer service via email and enter your information in the comments section of a text box. Others, such as All State, have a form that they want filled out. Many sites don’t offer clear steps for cancelling a policy with them, (or even offer a link on their websites to allow you to do it), which is why a phone call is usually the fastest and easiest way to determine what a company requires from you.
It is very important that you get a confirmation regarding your cancellation; this should come to you via email. If you don’t receive one within 24 hours of cancelling your policy, then you need to call the insurance company and verify that they have received your request for termination. If they haven’t submit it again, but also ask for a fax number so that you can send the request in your own handwriting as well.
Once your termination has been processed, you should receive an email that states that you policy is being terminated, the date it will be terminated and the amount that the company owes you or that you owe the company. In addition, you will receive a warning that it is against the law to allow your insurance to lapse without other coverage in place (if you still own your vehicle).
Step 3 – Selecting a New Policy
Now that you understand how easy it is to terminate your old policy, if you still own your vehicle or you plan on purchasing one to replace the one you no longer have, then you need to purchase a new insurance policy. If you terminated your policy because you no longer have the vehicle, you may be tempted to simply sign up with the same insurance, but before you do, you want to ensure that you are paying the lowest possible rates.
Many people do not realize that insurance rates from insurance companies actually change from month to month. What this means is that one month, if you received an insurance quote, the premiums might be $1100 for the year, the next month it might be $1500 and so on. Once you agree to a premium, it belongs to you, your premiums won’t fluctuate depending on the market, you simply pay what you agreed to once you accepted a quote.
Because of the fees that most companies charge when you sign up for a new policy, it is not fiscally reasonable to switch insurance companies from month to month in order to get a good rate (not to mention, you get better rates when you commit to and stay with a company for a year or longer). What you need to do is do a rate check each time your policy is due to expired. Don’t assume your insurance company is giving you the best rate because you are an established customer, you need to compare rates.
Comparing rates is easy. All you have to do is use a free quote tool like the one found at the top of this page. With a free quote tool, you can compare the rates of several companies (all licensed to sell insurance in your state) side by side. You can see for yourself whether or not you are getting the best rate from your insurance company.
One of the biggest benefits of using car insurance rate quote tool is that you are under no obligation to make a purchase. If you like what you see, click the link and fill out the additional information needed; if you don’t, then close out and you are done. Using a quote tool is fast and easy, why not try it today?