Even if your policy started just a few days ago, you can cancel it. Contact your insurer or agent to find the best way to cancel your policy. Some insurance companies allow you to cancel directly over the phone or online. You can cancel a policy at any time.
Make sure you have your new car insurance in place before you cancel. You don't want there to be any interruption in coverage, even if it's for a day. If you have an outstanding car loan or lease, you should also notify your lender that you have changed your insurer. Most states require drivers to have liability insurance to drive legally, or require that you be able to pay for other people's medical bills and property damage if you cause a car accident.
Forbes Advisor's analysis of car insurance rates by state revealed that the average rate can vary significantly from state to state. Talk to a licensed insurance agent to learn more about how driving your vehicle without insurance might affect you. If you cancel your insurance policy instead of suspending it, your insurance company is likely to view this interruption as a lapse in coverage and that your insurance premium will increase. Google “how do I cancel my insurance policy” or “how do I cancel your car insurance” and you'll get a variety of results.
The insurance industry is highly regulated and every state has insurance statutes that govern how companies must handle reimbursements. The reasons you might decide to cancel car insurance include finding cheaper rates with another insurer, moving to a new state, or even having an unpleasant experience with your current insurance company. Because it's illegal to drive without insurance in nearly every state, your state's department of motor vehicles may ask you to prove that you sold the vehicle or that you obtained other insurance. When you cancel a policy, you can get a car insurance refund or a policy credit if you're staying with the same company.
Changing states is a good time to compare car insurance prices and quotes from at least three insurers to see if you can find the best rates for you. If you move to another state where your current insurance company doesn't offer coverage, you'll need to get a policy from an auto insurer that offers coverage in your new location. When you cancel an auto insurance policy, your insurer will likely notify your state that you and your vehicle are no longer insured. If you cause an accident that damages your car, or if your car is damaged due to problems unrelated to the crash or is stolen, you will have to pay to repair or replace your car.
Once you have a start date for the new car insurance policy, you can cancel your current policy, but remember to make sure that the coverages overlap so you don't run out of insurance. Canceling comprehensive and collision coverage means that your car is only covered if it is hit by an at-fault driver; in that case, the other driver's liability insurance would pay.