How to Cancel Car Insurance: The Simple Guide
Maybe you’re trading your car for a bike. Maybe you’re leaving the country for a while. Whatever your reasons for deciding to cancel your car insurance, we can help you do it.
Can I cancel my car insurance?
Sure can! The real question is not can, but “Should I cancel my car insurance?” You may be tempted to cancel your car insurance if your car’s out of commission, if you’ve sold your car, if you’re not driving much or if you just can’t afford it. These are not good reasons to cancel car insurance, however. Having a lapse in coverage — even for just a few months — can raise your rates in the future, wiping out any money you saved by canceling your car insurance policy.
If you’re caught driving without insurance just once, you can face serious penalties like fines, a driver’s license suspension and even jail time. Also, your insurance rates will go way, way up. If you hit someone while you’re uninsured, you’re — how can we put this? — totally screwed. You could be personally liable for the other driver’s property damage and/or injuries, which could mean paying thousands of dollars.
Now, there are some good reasons to go ahead and cancel your car insurance. For instance:
- You’re switching car insurers, or being added to another person’s plan.
- You’ve sold your car, and you don’t plan to drive anytime in the near future.
- You’re no longer able to drive.
- You’re able to post a surety bond or other proof of financial responsibility, and your state accepts that as an alternative to car insurance.
Should I cancel my car insurance or suspend it?
Suspending your car insurance — keeping your policy, but making it inactive for a period of time — or reducing your coverage may be the best options if you plan to resume driving your car at some point in the future. If you’re traveling abroad for a while, for instance, but you’re not selling your car, suspension may be the right way to go. You’ll need to store your car somewhere secure (not out on the street) and obtain proof that it’s not being used.
Some insurers allow you to keep comprehensive insurance while you’re not using your car, but drop liability/collision. GEICO has a special Storage Protection Plan for military service members who are deployed for more than 30 days and need low-cost coverage for their stored vehicle.
How to cancel car insurance
The good news: It’s not hard to cancel car insurance.
The bad news: It’s a little more complicated than simply not paying your premiums. If you stop paying without formally canceling your policy, your insurer may assess late fees or even ding your credit. So you have to let your insurer know.
Some want you to send a letter (not an email). You can find sample insurance cancellation letters online. Some insurers may charge a cancellation fee, although they should also refund your unused premiums. And some want 30 days’ notice.
Here’s how to go about canceling car insurance for a few major companies:
- How to cancel Allstate: Contact your local Allstate agency or call 1-800-255-7828.
- How to cancel Esurance: Call 1-800-378-7262.
- How to cancel GEICO: Call 1-800-710-7751.
- How to cancel Liberty Mutual: Call 1-800-658-9857.
- How to cancel Progressive: Call 1-866-416-2003.
- How to cancel State Farm: Contact your State Farm agent.
Also, call your state’s department of motor vehicles. Your state may require you to turn in your license plates before canceling your car insurance. If you don’t, you could be charged a fee.
When you contact your insurance company, you can also ask your agent or rep about alternatives to canceling your car insurance. They may be able to recommend a cheaper plan, or help you decide if dropping collision coverage is a good way to go. Just remember, the best way to find the lowest-cost car insurance is to get quotes from multiple insurers.
And the best place to do that is Compare.com.