Canceling Auto Insurance In Florida: What You Need To Know

If you're thinking about cancelling your auto insurance in Florida, there are a few things you should know. Firstly, it's important to have another policy in place before cancelling your current one to avoid a lapse in coverage, which can result in fines and penalties. Additionally, your insurance company may require you to pay a cancellation fee, which can range from $20 to $50. When you cancel your policy, you may also be entitled to a refund for any remaining unused funds, minus the cancellation fee. It's also important to note that Florida has specific laws regarding the notice period for cancellation, which is typically 45 days.

Cancellation fees

If you cancel your auto insurance policy before the end of its term, you may have to pay a cancellation fee. This fee depends on the insurance company and state laws. In Florida, if you cancel your policy, the insurance company can keep up to 10% of the unearned premium as a cancellation fee and must refund at least 90% of the unearned premium. The unearned premium is the amount you paid for coverage that you did not receive. For example, if you paid for six months of coverage but only used three months, you would be owed a refund for the remaining three months, minus any cancellation fee.

Short-Rate Cancellation Fees

Some insurance companies use a short-rate cancellation fee, which is a percentage of the unearned premium, usually 10%. So, if you cancel your policy halfway through the term, you would owe the insurance company 10% of the premium for the unused months. This amount would be deducted from your refund, or you might receive a bill if there is no refund owed.

Notification Requirements

Insurance companies are required to notify you of any cancellation or non-renewal of your policy. In Florida, insurance companies must give at least 45 days' advance written notice of non-renewal or cancellation, except in cases of non-payment of premium, where 10 days' notice is required.

Refunds

If you cancel your auto insurance policy, you may be owed a refund for the portion of the premium you paid for coverage that you did not receive. Insurance companies in Florida are required to mail any refund within 30 days of the effective date of the cancellation. If you cancel, the refund will be the unearned premium minus any cancellation fee. If the insurance company cancels, you should receive a full refund of the unearned premium.

Military Service Exception

If you are a member of the military and need to cancel your auto insurance policy because you are called to active duty or transferred to a location where insurance is not required, you are entitled to a full refund of any unearned premium. You will need to provide official military orders or written verification from your commanding officer.

Refund eligibility

In Florida, if a policyholder cancels their motor vehicle insurance, the insurer must mail the unearned portion of any premium paid within 30 days after the effective date of the policy cancellation or receipt of notice or request for cancellation, whichever is later. This requirement applies to a cancellation initiated by an insured person for any reason. The insurer may retain up to 10% of the unearned premium and must refund at least 90% of the unearned premium. If the policyholder has prepaid for their insurance, they may be entitled to a refund for the months they didn't use.

If the insurer cancels the policy, they must refund 100% of the unearned premium. If the unearned premium is not mailed within the applicable period, the insurer must pay the insured 8% interest on the amount due. If the unearned premium is not mailed within 45 days after the applicable period, the insured may bring an action against the insurer.

Some insurance companies charge a fee to cancel auto insurance before the renewal period. This fee is dependent on state laws and company preferences and can cost anywhere between $20 and $50. Other insurers may charge 10% of the remaining rates if the policyholder pays monthly or bi-annually. However, many major insurers do not charge a cancellation fee, including GEICO, Nationwide, and State Farm.

Policy termination notice period

In Florida, if you are the insured party, you must give your insurer a 30-day notice before cancelling your motor vehicle insurance policy. This is a regulatory requirement, and failure to comply may result in fines and penalties. The insurer is then obligated to mail the unearned portion of the premium paid within 30 days of receiving the cancellation notice. If the insurer itself cancels the policy, a 15-day notice period is required, and the full unearned premium must be refunded to the insured within 15 days.

For non-motor vehicle insurance policies, the insured party must be given a 45-day advance written notice of non-renewal or the renewal premium. If the policy is not being renewed, the reason for non-renewal must be stated. This requirement is contingent on the insured party providing all necessary information to determine the renewal premium.

In the case of non-renewal, cancellation, or termination of personal lines or commercial residential property insurance policies, the insurer must provide a 120-day written notice before the effective date. This notice period is shortened to 10 days in the case of nonpayment of the premium.

It is important to note that the cancellation of auto insurance in Florida can have several consequences, including the loss of coverage, which can result in fines and penalties. Additionally, a lapse in coverage may make it more challenging and expensive to obtain a new policy. Therefore, it is advisable to have another policy in place before cancelling your existing coverage.

Reasons for cancellation

There are many reasons why you might want or need to cancel your auto insurance in Florida. Here are some common scenarios:

• Moving to Another State: If you are moving to another state, you will need to register your vehicle in your new state of residence and obtain insurance that complies with the auto insurance laws of that state. You should contact your current insurance provider to find out if they can transfer your coverage to your new location. If not, you will need to obtain a new policy from an insurer that operates in your new state. It is important to ensure that there is no gap in coverage between your old and new policies to avoid penalties and higher rates.
• Changing Your Marital Status: A change in your marital status, such as getting married or divorced, typically requires a review and adjustment of your auto insurance policy. You may need to add or remove your spouse from your current policy or make changes to your coverage levels. In some cases, you may want to switch to a new insurance provider that offers better rates or discounts for married couples.
• Selling Your Vehicle: If you sell your vehicle and do not plan on replacing it, you can cancel your auto insurance. However, it is recommended to keep your insurance active until the new owner takes possession of the vehicle and the title is transferred. Check with your local DMV regarding the requirements for surrendering your license plates and cancelling your insurance.
• Switching to a Different Insurer: You may find a better deal or more suitable coverage with another insurance provider. In this case, you would need to purchase the new policy before cancelling your current one to avoid a lapse in coverage, which could result in higher rates and penalties. Have the quotes from the new insurer ready when speaking to your current insurer, as they may offer you discounted rates to retain your business.
• Reducing Coverage: If you own an older vehicle outright, you may consider dropping optional collision and comprehensive coverage. However, keep in mind that this would mean paying out of pocket for any damage or loss to your vehicle. Such a change would be considered a policy amendment rather than a cancellation.
• Being Covered Under Someone Else's Policy: If you are a member of a household where another person has an auto insurance policy, you may be added to their policy. This is common for married couples and adult children living at home. While this may increase the premium for the policyholder, there may be discounts available to offset the cost. Remember that insurance follows the vehicle, so if you drop your coverage, you would need to ensure that the vehicle is added to the other person's policy.

When considering cancelling your auto insurance in Florida, it is important to be aware of the potential consequences and ensure that you comply with state laws and regulations.

Consequences of cancellation

There are several consequences of cancelling your car insurance in Florida. Firstly, you will no longer have insurance coverage, which is mandatory in almost all states. Driving without insurance in Florida can result in fines, suspension of your license, and even jail time. A lapse in coverage also leaves you financially vulnerable in the event of an accident, as you would be responsible for paying for any injuries or damage out-of-pocket.

Cancelling your car insurance can also make it more difficult and expensive to purchase a new policy in the future. Insurance providers may consider you a higher risk and charge higher rates. You may also lose discounts, such as loyalty discounts, if there is a gap between your old policy and the new one.

In Florida, if you cancel your car insurance policy, the insurance company is required to refund the unearned portion of any premium paid within 30 days of the cancellation. The company may retain up to 10% of the unearned premium and must refund at least 90% to the insured. If the cancellation is due to the insured being called to active military duty, the insurance company must refund 100% of the unearned premium.

It is important to note that Florida has specific requirements regarding the timing of insurance cancellation when moving out of state. You should not cancel your Florida insurance until you have registered your vehicle in the new state or surrendered your Florida license plates. If you are keeping the same insurance carrier, they can change your coverage to your new state of residence when you register your vehicle there. However, there may be a brief overlap where you have insurance in both states to avoid penalties.

Frequently asked questions