No matter how happy you are with your car insurance company, there may come a time when you will need to cancel your car insurance with one company and go with another.
You may also be in a position where you need to cancel your insurance and you are not replacing it with another policy. You may have gotten married and are now part of another policy, or maybe you sold your vehicle and will not be replacing it or continuing to carry insurance.
If you have decided to change insurance companies, you will need to purchase the new policy before you cancel your current insurance.
You may want to wait until your premium is due to do your auto insurance comparison. By comparing at a renewal time, you will not need to worry about pro-rated refunds and fees that your insurance company may assess for cancellation during policy period.
There are a few things you need to know for the proper cancellation of your current insurance. The following list covers steps you should take in order make your insurance transition go smoothly.
Get your new car insurance
Once you have decided upon a car insurance company that you wish to do business with, then you will want to purchase their policy before you cancel your current insurance.
Look over your new policy to make sure that it is everything that you agreed to and pay for your new premium. You will sign the policy and you will be given a piece of paper that recaps your coverage and includes the vehicle and driver information. This is called a binder and it means that you are bound to the new company. It will include a time and date stamp.
At this point, you have two car insurance policies.
You do not want to go one minute without insurance coverage for many reasons besides the possibility of an accident. Your Department of Motor Vehicles can suspend licenses of drivers without insurance.
By purchasing your new policy first, you will have continual coverage and this can result in a cheaper car insurance rate. Lapses in policies do count against you.
Contact your current car insurance company
You can call your insurance company and find out what is needed to cancel your policy.
They may require that you put your request for cancellation in writing and fax, email or hand-deliver this to your agent or company representative. You may also be required to provide proof that you have a new policy in effect.
Many states require insurance companies to notify the Department of Motor Vehicles of any insurance cancellation and once the companies do, the state may suspend your license and registration for lapse in insurance. Should the state do this, you may be required to provide proof of insurance to the Department of Motor Vehicles to re-instate your license.
Confirm your cancellation
Like any other type of legal paperwork, you will want to follow up and make sure that your requests have been honored. You can call your insurance company’s main office and make sure that a cancellation has been processed.
If the insurance company does not cancel the policy, you may be requested to pay for additional time that you are insured under a policy that continually renews at either the 6-month or the one-year mark.
If you have found another car insurance company while doing your auto insurance comparison, then your next step is to purchase the insurance and do your cancellation paperwork.