Canceling your insurance shouldn’t be a time-consuming task. While it is a contract, it’s one that can be canceled at your request.
If you’re on the verge of switching your carrier or you no longer own a car, it’s important that you know the steps that need to be taken to end the contract.
Most business can be conducted on the Internet nowadays. You can get quotes for auto insurance on the Internet, you can buy your policy online, and you can also make online payments.
While servicing your policy online is an option with many carriers, the technology isn’t always guaranteed. Here’s a guide to canceling your insurance to ensure that you don’t experience any delays.
If you are also looking for the best auto insurance rates, start comparison shopping with our FREE online quote tool. Enter your ZIP code above!
When can you cancel your auto insurance?
Auto insurance is a legally binding contract. Fortunately, the contract was written with terms that benefit you.
The insurance company can cancel your contract during the term only when you violate the terms of the policy, but you’re free to request a cancellation at any time.
Do you have to tell the insurance company why you want to cancel your insurance?
The Bill of Rights that’s followed by all insurance companies in every state is designed to protect consumers from being taken advantage of when buying insurance.
Each bill gives consumers who buy and maintain their auto insurance to cancel their policies at any time and for any reason.
Since you’re allowed to cancel your insurance for any reason, you don’t have to disclose the reason why you want your contract canceled unless you want to.
The company can never require that you tell them why you’re canceling the policy.
Sometimes it’s wise to disclose this information if it means that they will waive the cancellation fee.
Can carriers charge you to cancel your insurance?
Some carriers do charge cancellation fees when you decide to severe ties with the company in the middle of the policy period.
If the insurance department that oversees insurance transactions and business policies allows companies in the Property and Casualty segment of the marketplace to charge a fee, there’s a possibility that a fee will be charged.
Do all carriers charge cancellation fees?
If you live in a state where it’s been decided that fees are fair and reasonable, there’s still a chance that you can avoid them.
There are carriers that believe in offering excellent service. To keep their clients coming back, they don’t charge a fee.
Other companies charge larger fees to deter people from leaving the carrier before the expiration date.
What type of fee will the carrier charge?
There are companies that charge fixed fees to terminate contracts. These fixed fees are usually only charged because it is used to pay for the money that goes to processing your request.
Other carriers will charge a percentage of the money that’s due on the account as a way to recoup for some of the money they projected that they would be earning.
Benefits of Disclosing Why You’re Canceling Your Policy
Some companies will only charge their policyholders fees in certain scenarios.
If you’re switching carriers, you’ll be assessed the fee. If you sell your only car or your car is totaled, the fee may be waived.
The possibility of fees being waived is why you should tell the company if you’re moving, you sell your car, or you surrender your license.
Do some companies cancel your policy online?
There are carriers that have online systems where you can request that changes to your policy be made on a specific effective date.
You should log into your account and see if this is a possibility when you’re ready to cancel your coverage.
If it’s not, you’ll have to try other means.
How to Write a Cancellation Letter
A majority of carriers require all of their policyholders to submit their request in writing.
If you want to end your contract, draft up a request.
You can either fax it in, mail it in, or scan it and email it to your agent. Some more lenient carriers will let you email the request without a signature from your own email address.
A cancellation letter should include:
- Cancellation date
- Policy number
- Reason for the cancellation
- Address where to send bills and refunds
Be sure to find out how much it costs to cancel your insurance and what types of requests are accepted.
If you are looking around for coverage at the moment, you can request quotes from several carriers online at once. Get your instance quotes online and after you switch submit your request to cancel your old policy.
Start comparison shopping today by using our FREE online quote tool! Enter your ZIP code to get started!