Can You Cancel Car Insurance?

Today we’re talking about whether you can cancel your car insurance at any time. The short answer is yes. You will even receive a partial refund if you pay your premium in advance and cancel before the end of your policy term. However, some car insurance companies may charge a fee for canceling your policy before the end of the policy term.

There are generally two types of fees car insurance companies charge for cancellation, flat fees and short-rate fees. Flat fees are fixed charges that do not change based on how much of the policy term is left. On the other hand, short-rate fees are a penalty for early cancellation that allow insurance companies to keep more of your premium, above what would be withheld on a pro-rated basis. 

Short-rate fees get less expensive the further into the policy term you are. Before canceling your car insurance, you need to gather some information including your Social Security number, car insurance policy number, driver’s license number, and preferred cancellation date.

Lastly, be sure that you have a new insurance policy set up to overlap with your current one so you can avoid a lapse in coverage. Just note that some insurers require 30-days’ notice before cancellation, so you don’t want to get a new policy too early. Now that you know a bit more about canceling car insurance,  you’re ready to start the transition to a new insurer. To check out WalletHub’s guide to switching car insurance companies, just click the button here. I hope you enjoyed this session on everything you need to know about Can You Cancel Car Insurance? So always be sure to contact a professional before making any financial decisions.