Breaking Up is Hard to Do: How to Cancel a Car Insurance Policy
Vintage Sports Car (Photo credit: StockMonkeys.com)
Liability auto insurance is a requirement in all states, meaning that whenever you get behind the wheel of any motor vehicle, it must have insurance that will cover any damages to another person or their property should you be in an accident. What many people do not know though is what happens if you need to cancel your policy. There are many reasons that could require you to cancel a policy, including your vehicle being totaled and you chose not to replace it, you sold your car or if the person who owned the car, and the policy, passed away. If you follow a few key steps, it is quick and easy to cancel the auto insurance policy that you no longer need.
Call Your Agent
The first thing you need to do when the policy needs to be canceled is to call your agent. Your agent will notify you of any requirements that the company has for your policy to become inactive. Depending on the state and the company, you might be required to provide documentation stating that the car no longer belongs to you or a death certificate.
Write a Letter of Intent
The next step is to file a formal request for cancellation through a letter of intent that you sign and send to your insurance company. Your insurance company may have their own form that you simply sign and send back but an actual letter with your reasons for canceling the policy may be enough. In this letter of intent you should also request a refund if you are between billing cycles. For instance, if you have paid a full 6 months and you cancel your policy during month number 4, you are entitled to a refund of the remaining 2 months. Even if you are on a month to month plan, let’s say that you pay the 15th of every month and you are canceling on the 1st of the month. You have already paid for 30 days but have only used 15. This means that you have overpaid and are entitled to a refund of the remaining amount.
Notify Your State Licensing Department
Many states today check the status of insurance before they issue the vehicle’s registration. It is because of this that you should notify your state DMV that your insurance policy is canceled as well as the reason. This will give them a heads up so that they are not alarmed when they get word that the vehicle no longer has valid insurance.
No matter what the case may be, you need to be sure that your insurance policy is canceled completely when you need it to be canceled. If the policy continues, you become liable for all of the charges since the insurance policy continues until it is canceled. The agent and the company cannot read minds, they do not know that you need your policy to be canceled, and they don’t know that your car has been sold or that a loved one has passed away. This is why you need to contact them so that the bills do not pile up since when they do, you are still responsible for paying them, even though the policy was not needed anymore. If you are in a place where you simply want cheaper auto insurance, you can compare auto insurance companies with AutoInsurance.us to get the best price before you cancel your current policy.
Richard Ackerman is an auto insurance expert who has worked in the industry for more than twenty years. His articles appear on a number of auto and personal finance blogs.
Category: Car Insurance
