Cancelling Auto Insurance 101

By: David Schneider, Car Insurance Expert
CheaperCarInsurance.com

You’re probably on our website because you have some sort of problem with your current auto insurance company. It could be they overcharge you, or that their customer service isn’t up to par. Maybe you’re moving, or want better coverage for your vehicles. Whatever the reason you are switching car insurance, you’ll find a better, more affordable auto insurance company right here on our site. In the meantime, you need to understand what you need to do to cancel your old insurance policy.

Not taking all the necessary measures to properly cancel your old policy could result in you being double billed for insurance and having a large headache down the road.

If you assume once you get new auto insurance you can simply ignore your old auto insurance company’s bills, you may be in for a surprise. Your previous insurance company can cancel your policy due to nonpayment in this case, which will go on your credit report and affect your credit rating. Not a good thing.

Five Things to Remember

It may be easy to forget your former auto insurance company if you had a rocky relationship, but make sure you take the necessary measures to cancel them so that you properly sever the relationship. Keep these key things in mind:

• Your auto insurance policy doesn’t automatically cancel at the end of your policy.
• Simply not paying your bill isn’t an effective way to cancel it.
• You will need to send a written letter to your insurance company stating you wish to cancel your auto insurance policy.
• If you cancel mid-policy, your auto insurance company may charge you a penalty fee. If you can wait until your policy is complete, best to do it then.
• Your old company may ask for proof of your new insurance to guarantee that you’ve got coverage.

If you’re trying to switch insurance companies to save money, doing it mid-policy may be counter productive, as the fee your old company will charge you may be more than what you’ll save by switching. Wait until your policy is up for renewal to ensure that you actually save money with the switch.

Don’t be offended if your old auto insurance company asks for proof of your new insurance policy. They may be required by law to make sure you have auto insurance (keeps you safe), so they’re really just looking out for your best interest.

It’s best to get a new auto insurance policy three to four weeks before the other one expires to make sure you have no gap in coverage between the two policies. Start the process of cancelling your old policy as soon as you know you have car insurance coverage with your new insurance company.

Check with your auto insurance company to see exactly what they require for you to do in order to cancel your policy. Some may take your request over the phone, but most will ask that you send them a letter with the date you wish your policy to be cancelled. Call a week after you send the letter to make sure it was received and processed, and ask for proof that the policy was in fact cancelled.

Moving On

Now that you can breathe easier, understanding the steps to cancel your auto insurance policy, start looking for an insurer that will give you everything you’re looking for in a car insurance policy. We’ve got great rates on car insurance from a number of top rated providers. Get a quote and see how much you can save on great auto insurance today!

Posted: January 23, 2010