So, you managed to get your vehicle insured. Congratulations! But, now, for whatever reason, you want to cancel your policy. We don’t need to know why, but don’t worry, we have some useful tips to help make the process as quick and painless as can be.
Selling your vehicle, moving to a different state, or receiving inadequate service from your insurer are just a few examples of the many different reasons that exist for canceling – or terminating – an auto insurance policy. The good news is that most insurance companies allow customers to cancel a policy at any time – even if it’s not renewal time – with little or no penalty.
The catch, however, is that if you don’t give the insurer adequate notice of your impending cancellation (usually given in writing), you’ll not only find yourself shelling out more cash, your credit report is likely to be hit as well. Not paying your next or final installment before your renewal and expecting your policy to be canceled is a bad idea for several reasons.
Most insurance companies will automatically renew policies in good standing without notifying the customer first. However, letting policyholders know the repercussions they’ll face for canceling without giving proper notice is not a high priority for most insurers. Chances are you will be billed for the next period. Failing to pay the full premium for a policy and it will eventually get canceled thus causing damage to your credit history, and most certainly hurting your chances of getting good rates down the road. Should your policy ever be canceled, potential insurers will not only see you as a greater liability when quoting rates, you might not even be able to obtain a policy in extreme cases.
In general, it’s the customer’s responsibility to terminate a policy in accordance with the insurer’s official termination procedures. The basic procedure for canceling a car insurance policy is to contact the insurance company and inform them of your will to do so by a given date, upon which the cancellation becomes effective. A cancellation request form will be sent to you within a few working days; and, by simply completing this form, endorsing it with your John Hancock and returning it to your insurer quickly, you can save yourself from future hassles and financial hardship. If you have questions about the form itself, don’t be afraid to call your insurance company and ask. Don’t forget, it’s your ass that’s on the line!
Finally, if you’re switching to a different insurance company, the most important thing is to coordinate the official start date of a new policy with the end date of the old policy it’s replacing. While lapses in coverage are also a consideration for potential insurers when quoting rates, getting into a collision while temporarily uninsured is the last thing you need having come this far.