Car insurance policies can be terminated for a variety of reasons. If you are moving or relocating to a different state, selling or junking you car, of just want to try a different insurance company, you’ll need to cancel your old policy. It’s important however to follow some guidelines and do it properly.
For most insurance companies, the standard practice is to allow you to cancel your policy at any time during by sending written notice with the date you want cancellation to be. Insurance policies don’t necessarily end at the end of the policy term, so you don’t want to assume that you are cancelling by simply failing to pay your next bill.
You should also check your policy carefully, as it may not be entirely clear. Insurance companies will generally be very quick to tell you that your coverage stops at the end of the policy period if you don’t pay your premium, but they may not be so quick to let you know of the penalties you can incur for not providing formal notice of your policy termination.
You should also keep in mind is that your chances of obtaining auto coverage in the future may be impacted is your car insurance policy is canceled. A policy cancellation in your insurance history may end up getting you labeled as a high-risk applicant. Usually though you can avoid this trap by officially terminating your policy properly and in a timely manner.
Switching your coverage to a different insurance company carries additional considerations. Most people who switch plan to drive their car throughout the process. If this is you, be careful not to allow a lapse in your car insurance coverage. Coordinate your new policy’s effective start date on or before the your old policy becomes terminated.
If you go to the trouble and make the effort to notify your old insurance company when you want to cancel your auto policy, and follow their stated termination process, you won’t have to worry about any potential negative repercussions.
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