Cancelling Car InsuranceApril 28, 2016
Switching insurers or cancelling your car insurance policy could cost you money if done incorrectly.
Thinking of cancelling your car insurance? It doesn’t matter if you’ve found a better price for car insurance elsewhere, aren’t getting the service you expected, or just have to change providers because you are moving out of state. You’ll need to cancel your car insurance policy. Be careful though, there’s a right way and a wrong way to cancel your policy and the wrong way will leave you with a real headache.
Cancelling Car Insurance the Right Way
Cancelling car insurance is usually a simple process. You need to make sure that your new car insurance policy will be in effect before you cancel your old policy. If there’s more than a day’s overlap, you could be penalized for having a lapse in coverage. Switching car insurance companies is equally simple, but it can get messy if you do things in the wrong order.
When you are ready to get rid of the old policy, you’ll need to notify your previous insurer of your policy cancellation. Usually a call to them will work, but sometimes they require a signature or a written statement from the policyholder. The bottom line is that you need to inform your previous insurer of your intent to cancel your policy.
Cancelling Car Insurance the Wrong Way
Whatever you do, do not just switch insurers without cancelling your old car insurance policy. If you have automatic debit set up on your previous policy, then it could continue to draw money from your account. If you don’t, then you could receive collections notices for failure to pay the bill. Either way, it’s not good for you. If your previous insurer offers a grace period for policy renewals, then you could end up being required to pay for the grace period during which your old policy was still active – even if you were covered by your new policy during that time.
Cancelling Car Insurance Doesn’t Have to be Difficult
Switching car insurance can be a good thing. It can save you money or save you the trouble of dealing with a company that has poor customer service. Like many things in the financial world, there’s a right and a wrong way to do things. If you still need help cancelling car insurance or switching insurers, call your local agent as they are usually quick to help. If you’re switching for savings, they may be able to help you identify other ways to save. And once you’re ready, come back to Compare.com to get free car insurance quotes and start saving.
Learn More About Auto Insurance
When it comes to auto insurance, there are a lot of variables, a lot of unfamiliar terms, and a whole lot of peculiarities – particularly when you consider that each state has its own insurance market. Our Auto Insurance Explainers can help sort it out for you, and make more educated decisions about your car insurance.