How to Switch or Cancel Your Auto Insurance Policy

If you’re like most people, when it comes time to renew your auto insurance, you simply stay with the insurer that you’ve known and trusted for years. For some, this hassle-free, set-it-and-forget-it approach works out fine. After all, some auto insurance companies even reward loyal customers with a discount on their auto insurance coverage. For many, however, this is a costly mistake. If it’s been a while since you’ve shopped around for auto insurance, you could be throwing hundreds of dollars away every year.

Knowing When to Shop Around for Auto Insurance

While it’s a good idea to research other auto insurers a month or two before your current policy expires, you should also consider looking at your options any time you’ve had a major life change. If you’ve recently moved, gotten married, had a baby or purchased a new vehicle, you may be able to save money by switching to a different company.

Note that you want to shop around and purchase an auto insurance policy before your current auto insurance policy expires. Not only is driving without auto insurance illegal and potentially financially devastating, but you may end up paying a higher premium when you do purchase an auto insurance policy.

Talk to Your Auto Insurance Company

Let your current auto insurance company know that you are shopping around for auto insurance, and if you have any competing offers, let them know. Your auto insurance provider may be able to offer you a discount that you didn’t know was available to you and bring down your current rate.

Research Potential Penalties

While most auto insurance companies allow you to cancel at any time as long as proper notice is provided, there are some companies that penalize customers who cancel their policy before the term is up. If you’re canceling in the middle of a term, make sure that you understand any penalties or fees that you may have to pay.

Conduct Careful Research

Before purchasing a policy from a different auto insurance company, make sure you conduct careful research to ensure that the company is a good fit for your needs. Factors to consider when researching an auto insurance company include the company’s customer complaint ratio, overall customer satisfaction and financial outlook.

How to Cancel Your Auto Insurance Policy Correctly

There are a number of reasons that you may decide to cancel your existing auto insurance policy, such as finding a cheaper rate with another company, being called to active military duty overseas, or having an injury or illness that will keep you from getting behind the wheel of a vehicle indefinitely. In cases like these, canceling your existing policy makes a lot of sense, but it’s important that you do it in the correct way to avoid financial penalties.​

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Make Sure Your Old Policy Is Canceled

Be sure to notify your current company that you are canceling your policy. If you simply stop paying your premium, the auto insurance company may continue to bill you and may even report you to the credit bureaus for non-payment. Contact your current auto insurance provider to cancel your policy, and make sure to get written confirmation that you’ve canceled. The easiest way to transition to a new policy is with the help of an agent. They can help you coordinate the switch to ensure all loose ends are tied up and there are no lapses in coverage.

What to Expect When You Cancel Your Policy

Unless you’ve gotten free assistance from an agent, doing your research and finding a new auto insurance policy that provides great coverage at an affordable rate is a lot of work. However, purchasing and agreeing to a new auto insurance policy is only the first step in making the switch.​