Canceling an Auto Insurance Policy

If you ever need to cancel your insurance policy, you should follow a few simple steps:

Get in Touch With Your Carrier
First thing you should do is call or write your insurance company. Let them know you wish to cancel your policy with them and the effective date of that cancellation. Do not simply let your policy lapse or the insurance company will continue to bill you for coverage.

Every insurance company will have different cancellation procedures. Some might require you to formally end the policy by signing a cancellation form while others will be content with a letter or phone call.

Contact the DMV
You may need to let your state's department of motor vehicles know about your cancellation. This will largely depend upon your state and you may also be required to surrender your license plates and tags. It's important you follow your state's financial responsibility laws. If you sell your vehicle or it is totaled, then obviously you're no longer financially responsible. However, if you keep the vehicle, you should stay off the road until you have a new policy in place.

Let's say you pay your insurance policy several months ahead of time but then your car is totaled and you cancel the policy after only two weeks. The insurance company should refund the remaining balance on your policy and will send you a check a short time later. If you ever cancel your policy, make sure you inquire about whether you are entitled to a refund.