When to Cancel Car Insurance

Switching Companies

It is a good idea to reevaluate your auto insurance policy every six months, and even shop around for a lower rate. You may be able to find a lower rate or find a rate that gives you more for the money. However, make sure that your new policy takes effect before your old one expires or is canceled. It is important to note that some auto insurance companies will inform your former car insurance company that you are switching, but some do not, and, even amongst those that do, calling your previous company to confirm the cancellation is not a bad idea. In fact, those few minutes could save a lot of time and worry.

It may be necessary to cancel your car insurance if your living situation changes. For example, if you get married and decide to join your spouse's existing policy, or a new employer is supplying your auto insurance, you may need to cancel your current auto insurance policy. You also may need to cancel your car insurance policy if you move to a state that your current auto insurance provider does not service. However, keep in mind that if you must keep coverage on any vehicle that you own.

If you are no longer driving, such as if you move to a city center and opt to walk or use public transportation instead of keeping a car, you should cancel your car insurance. There is no need to retain the policy. Similarly, you may opt to cancel your car insurance policy if you are legally prohibited from driving, such as if your license is revoked for speeding tickets or driving under the influence. However, keep in mind that if you are keeping the vehicle, even if the vehicle is not driven, it either has to have insurance on it or you have to turn the license plates in to the state motor vehicle authorities.

If your car is repossessed, you will need to cancel any auto insurance policy you have on the vehicle, as long as you are not planning to try to regain ownership of the vehicle. Repossession agencies rarely contact car insurance companies to let them know a vehicle has been repossessed, so you will need to do so. In some cases, you may have to furnish proof to the car insurance company that your car has been repossessed before you can cancel.