Alyssa Lane
Dropping your car insurance can be a complicated process, and it's important to understand the implications of doing so. While you can cancel your policy at any time and for any reason, there are a few things to keep in mind to avoid penalties and ensure a smooth transition. Firstly, it's crucial to have another insurance policy in place before cancelling your current one to avoid a lapse in coverage, which can result in higher future rates and legal consequences. Contact your insurance provider to understand their specific cancellation process, as some companies may require a signed cancellation form or charge a cancellation fee. Additionally, consider reviewing your policy to understand any cancellation fees, refund policies, or notice requirements. By following these steps, you can effectively drop your vehicle insurance, even on a Sunday, and avoid potential issues.
| Characteristics | Values |
|---|---|
| How to drop vehicle insurance | Contact your insurance provider, request a coronavirus-related payment delay or plan, reduce your coverage, suspend your coverage, remove yourself from a policy, or cancel your policy |
| Reasons to drop vehicle insurance | You're switching insurance companies, you're covered under someone else's policy, you're moving out of the country, you're selling your car, you want a better deal, you want to reduce coverage |
| When not to drop vehicle insurance | When you will be driving, when you're only temporarily not driving, when your premium is high |
What You'll Learn
Reducing your coverage
To start, you can reduce your auto insurance to the minimum car insurance requirements. Almost every state requires liability insurance, and others mandate uninsured/underinsured motorist coverage, personal injury protection and/or medical payments coverage.
Consider keeping comprehensive insurance (or adding it) if you are storing the vehicle while you don't drive it, in case it suffers damage while stored. Comprehensive pays to replace your car if it's stolen, and it covers non-driving problems such as vandalism and damage from falling objects.
Ordinarily, you must buy comprehensive along with collision coverage, but your insurer may make an exception and let you keep a comprehensive-only policy, sometimes known as "car storage insurance", if you're storing your car long-term. If you have a car loan, your lender may require you to keep both comprehensive and collision coverage.
If your insurer allows you to keep comprehensive and drop everything else, including liability insurance, contact your DMV. You may need to file an affidavit of non-use because your car would no longer have enough insurance for anyone to drive it legally.
If you've paid off or owe a minimal amount on any loans you have on your vehicle, you may not need gap insurance. If you own your car, you may be able to lower or opt out of collision and comprehensive coverages.
GEICO: Salvage Vehicle Insurance
You may want to see also
Suspending your coverage
Suspending your car insurance coverage can be a good way to save money if you have a vehicle that is not being used. However, it is not as simple as cancelling a subscription and there may be limitations depending on your insurance provider and the state you live in.
How to Suspend Your Coverage
To suspend your coverage, you will need to contact your insurance provider. Not all insurance companies allow customers to suspend their coverage, and it may only be permitted in certain situations. For example, if you are experiencing financial hardship due to the loss of work, your insurance provider may suggest this option. However, it is important to note that suspending your coverage will leave you uninsured. Therefore, you should only consider this option if you have alternate transportation available.
You may also need to file an "affidavit of non-use" from your state's department of motor vehicles to halt state-required auto coverage. This document officially notifies the state that you will not be operating your vehicle for a specified period of time.
It is important to note that suspending your policy is typically not an option if you have a car loan. Lenders generally require that you maintain coverage for problems such as theft and vandalism. Additionally, if you live in a state that requires auto liability coverage, you may need to keep your liability coverage to avoid a lapse in coverage.
Reducing Your Coverage
If you are not eligible to suspend your coverage, you may want to consider reducing your coverage instead. This option allows you to avoid cancelling your policy altogether, which can result in higher rates in the future. By reducing your coverage to the minimum requirements, you can save money while still maintaining the necessary insurance.
If you are storing your vehicle, consider keeping comprehensive insurance to protect your vehicle from non-driving problems such as fire, animal damage, vandalism, and theft. Comprehensive insurance can also replace your car if it is stolen. In some cases, your insurance provider may allow you to keep a comprehensive-only policy, also known as "car storage insurance". However, if you have a car loan, your lender may require you to maintain both comprehensive and collision coverage.
Removing Yourself from the Policy
If you are going away but others in your household will be using the vehicle, you may be able to remove yourself from the policy temporarily. This option can save you money, especially if you are a riskier driver than the other drivers on the policy. However, if it does not result in any cost savings, it may be more convenient to remain on the policy.
It is important to note that removing yourself from the policy is not the same as being an excluded driver. If you are simply not listed on the policy, you can still drive the car. Excluded drivers, on the other hand, are not supposed to drive the car and may be required to provide proof of separate insurance.
Insured Drivers or Vehicles: What's the Law?
You may want to see also
Cancelling your coverage
Contact your insurance provider
Get in touch with your insurance provider or agent to initiate the cancellation process. You can usually do this by phone, mail, fax, email, or in person. Ask to speak with an agent about the specific requirements for cancelling your policy, as these can vary depending on the provider.
Understand the requirements
Your insurance provider may require you to pay a cancellation fee or give a certain number of days' notice before cancelling. They may also ask you to sign and send a cancellation letter or form. Make sure you understand what steps are required and any potential consequences of cancelling.
Sign and send the cancellation letter/form
If your insurance provider requires a cancellation letter or form, make sure to include your policy number, name, and the date you want your policy to be cancelled. You may also want to include a refund request for any unused portion of your policy if you have paid upfront.
Request a policy cancellation notice
Once your cancellation is finalized, ask your insurance carrier for a written confirmation or notice of cancellation. This will ensure you have a record of the transaction.
Avoid a lapse in coverage
To avoid a lapse in coverage, which could increase your future rates, make sure to have a new policy in place before cancelling your existing one. Ensure that your new policy starts on the same day that your old policy ends to avoid any gaps in coverage.
Be aware of state-specific requirements
Check with your state's Department of Motor Vehicles (DMV) to understand any specific requirements for cancelling your car insurance. Some states may require you to submit an affidavit of non-use or surrender your license plates before cancelling.
Consider alternative options
Before cancelling your coverage, explore alternative options such as reducing your coverage, suspending your policy temporarily, or removing yourself from the policy if you're going away but others in your household will still be using the vehicle.
Shop Smart: Vehicle Insurance Tips
You may want to see also
Cancelling due to selling your car
If you have sold your car, you will need to cancel your insurance policy. The simplest way to do this is to contact your insurance provider or agent by phone, email, fax, or in person. You will need to provide some details about the sale, including the name of the buyer, the date of the transaction, the make and model of the car, the vehicle identification number, and the price of the car and payment method. You may also need to submit a Notice of Release of Liability to your state's department of motor vehicles.
It is important to note that you should not cancel your insurance policy before the sale of your car is complete. This is because, until the sale is finalised, you are still the owner of the vehicle and are responsible for ensuring it is insured. If a potential buyer takes the car for a test drive and damages it, for example, your insurance will cover the cost of repairs.
In some cases, you may be able to cancel your insurance policy immediately after the sale is complete. However, if you plan to buy a new car in the near future, it may be more financially sensible to keep your policy active. This is because a lapse in coverage may result in higher rates when you purchase a new policy. To avoid this, you could consider getting a non-owner car insurance policy, which will cover you when driving rentals or borrowed cars.
Alternatively, if you are buying a new car, you can simply add it to your current policy instead of cancelling your existing policy. This can save you time and may be more cost-effective, especially if you are happy with the service provided by your current insurer.
Insuring Your Vehicle: Tax and Insurance Days
You may want to see also
Cancelling due to high premiums
If you are considering cancelling your car insurance due to high premiums, there are a few things you should keep in mind. Firstly, it is important to remember that you can cancel your car insurance policy at any time and for any reason. However, you should also be aware of the potential consequences of cancelling your policy, such as a lapse in coverage, which could result in higher future rates.
To avoid a lapse in coverage, it is recommended to secure a new auto insurance policy before cancelling your existing one. This means that you will need to shop around for a new policy that offers the coverage you need at a more affordable price. When choosing a new policy, consider the following:
- How much insurance you need
- What types of coverage you want to include
- Whether you can take advantage of any discounts offered by the insurer
Once you have found a new policy that meets your needs, you can proceed with cancelling your existing policy. Contact your insurance provider to initiate the cancellation process, which may vary depending on the company. Some insurers may allow you to cancel over the phone or online, while others may require written notification or a signed cancellation form. Be sure to ask about any cancellation fees that may apply and request a policy cancellation notice for your records.
After cancelling your existing policy, you may be eligible for a refund of any prepaid premiums, minus any cancellation fees. However, this will depend on your insurance provider and policy.
It is important to note that simply stopping your payments is not a good idea, as your insurance company could cancel your policy for non-payment, which may result in higher rates when you purchase new coverage. Additionally, keeping an uninsured vehicle can have legal and financial implications if you cause an accident. Therefore, it is always best to communicate with your insurer and properly cancel your policy if you are no longer able to afford the premiums.
Older Vehicles: Cheaper Insurance?
You may want to see also
Frequently asked questions
Contact your insurance provider or agent to cancel your car insurance policy. Depending on your insurance company, you may be able to cancel by phone, mail, fax, email, or in person. Some insurers may require you to sign a cancellation form.
Yes, you can cancel your car insurance policy at any time and for any reason. However, it is important to review your policy beforehand to understand any cancellation fees, refund policies, or notice requirements.
Cancelling your car insurance policy can result in a lapse in coverage, which can lead to higher future rates and possible fines from the Department of Motor Vehicles (DMV). It is recommended to have another policy in effect before cancelling your existing coverage to avoid these consequences.
