In other cases, they might charge you a small percentage of the final premium you were going to pay in the future. Most of the time, you won't have to pay any cancellation fees. You can cancel an auto insurance policy at any time. You can even receive a partial or full refund of premiums you paid in advance.
However, it's a good idea to do some research before canceling your insurance to avoid consequences, such as the interruption of coverage. A lapse can cause your premiums to increase in the future. Many companies don't charge cancellation fees. Your policy should indicate if there are any penalties for ending coverage before the renewal date.
Your insurance company can issue a refund if your policy is canceled and you have paid your premium in advance. Receiving an insurance refund will largely depend on the reason you canceled the policy and the amount of the premium you paid in advance. If you pay the full premium up front, you'll usually get a refund when you cancel your policy. If you pay your premium monthly, you may or may not receive a refund depending on when you cancel.
You can cancel car insurance at any time, even if you bought a 12-month policy. If you decide to cancel coverage, be sure to take appropriate steps to ensure that there isn't a gap in coverage. The final step in all of this is to get a cancellation confirmation from your insurer or agent. This confirms that your policy has been formally canceled.
Your current insurer must also reimburse prepaid premiums less cancellation fees. If you cancel your policy after just three months, your insurer will issue an insurance refund for the remaining nine months. However, make sure you have another policy in place before you cancel, or you'll suffer a gap in coverage. In many cases, the lack of insurance will result in higher rates when you take out coverage in the future, even if the reason for the cancellation is that you no longer have a vehicle.
Keep in mind that canceling car insurance without having new insurance in place will cause an insurance gap in your history. If your car is stolen, damaged, or involved in an accident while you're not insured, you could be responsible for repairs and medical bills. Changing states is a good time to compare auto insurance prices and quotes from at least three insurers to see if you can find the best rates for you. If your policy is canceled, you can look for a policy from another car insurance company, but be prepared to pay higher car insurance rates.
Consider your insurance needs, rates in your area, and possible charges when making the decision to cancel. Canceling comprehensive and collision coverage means that your car is only covered if it is hit by an at-fault driver; in that case, the other driver's liability insurance would pay. You generally need to get a new car insurance policy if you change states, even if you stay with the same company. Many people decide to wait until the insurance renewal date before canceling their policy, because they want to avoid paying a penalty, but sometimes staying with the insurance company just to avoid a penalty isn't the best option.
If you cancel car insurance without getting a new policy, driving without insurance puts you at greater financial and legal risk. If the insurance company cancels your policy, you'll normally get a refund from car insurance, unless they cancel the policy for non-payment. You can reduce your coverage without canceling your policy, such as canceling comprehensive insurance and car insurance by collision. If you cancel your car insurance before the renewal date, you may be reimbursed for some or all of the unused premium if you paid in advance.
You can choose to cancel your car insurance policy at any time, regardless of the reason, but it's a good idea to know the charges or the consequences that this could cause...