Life is always changing so it’s a good practice to review your insurance coverage at least every year. If you have bought a new vehicle or sold an old one, if you have moved to a new city or state or if you just want to shop around it is wise to know how to properly cancel your current auto insurance coverage so you do not end up paying unexpected fees.
The most important thing to remember is that you must give notice of cancellation to your current company. If you do not give your current auto insurance company proper notice of cancellation you may end up paying extra costs and facing a higher rate when being quoted by other companies.
- Do know your current auto insurance company’s cancellation rules. Find out whether or not you can cancel at any time during the policy period or if you have to wait for the end of the term to avoid cancellation fees.
- Do send written notice of cancellation by calling to request a form or using your company’s online link if they have one.
- Do set up new insurance right away. A gap in coverage can adversely affect your auto insurance rates down the road. If you are able, be sure to start your new policy on the day after the current policy ends.
- Don’t assume your policy will cancel at the policy expiration date. Car insurance policies automatically renew for the next period, they do not end on the policy expiration date.
- Don’t stop paying without notifying your company. You will automatically be billed and if you don’t pay you will be hit with a cancellation notice as well as a bad mark on your credit report.
- Don’t leave a gap in coverage. There are many good reasons to maintain continuous coverage including lower rates and continuous protection. Insurance companies lose confidence in you when there is a gap in coverage so be sure your new policy starts as soon as the old one ends. In this way you will also be sure to be protected should anything happen during that period.
It sometimes pays to switch car insurance companies. By shopping around you may be able to find comparable coverage at a lower rate than you are currently paying. The insurance market is competitive and good values can be found. However, be sure to follow your insurance company’s rules and be careful to avoid situations that will make it harder for you in the future.