How to cancel car insurance: Easy steps for a smooth transition

There are many reasons why you might need to cancel your car insurance – a move, a new vehicle or a more attractive rate with another company. Contrary to what some drivers might believe, you don’t need to wait until the end of your policy to cancel. But there are steps you’ll need to take to ensure you cancel the right way – and with as little hassle as possible.

If you have the right information before starting the cancellation process, it's pretty simple. Just follow the steps outlined in this guide. It’s worth noting that the actions may not be in the order you’d expect, but they’re critical to prevent a gap in coverage, which is an expensive — and avoidable — mistake.

Key highlights:

• When planning to cancel your policy, remember to secure new car insurance before canceling your current policy. Even short lapses in coverage can be expensive.
• You can cancel your car insurance at any time, not just when your policy is up for renewal.
• Be sure to follow your insurance company’s process and state laws regarding notice periods, methods of cancellation and cancellation fees.

How to cancel car insurance

Be prepared to cancel your car insurance by following these seven steps:

• Search for and secure new insurance. Once you’ve decided to cancel your existing policy, ensure you have one to replace it. A lapse in coverage of even a day could cause your rates to increase significantly, and many providers won’t honor a cancellation request if you cannot provide proof of new insurance.
• Know what your current insurer needs in order to cancel your policy. Your insurance company might require you to provide notice that you will terminate your policy with them – if these notice periods exist, they’re often 30 days. You don’t have to maintain a policy for any set amount of time, but you might need to pay a cancellation fee depending on your insurance provider and where you live.
• Have the right documentation ready. Before contacting your insurance company to initiate the cancellation, have all the information you need to make the process as easy and fast as possible. Gather your new policy information, current policy information, Social Security number, driver’s license – and proof of vehicle sale if you’re canceling because you sold your car.
• Learn about your local requirements. Insurance is different in every state. For example, Louisiana requires that you cancel your policy in writing. California drivers are more likely to need to pay a cancellation fee. It’s a good idea to familiarize yourself with your local laws – especially if you’re canceling your insurance policy because you’re moving to a different state.
• Contact your current insurance provider to submit a formal cancellation request. If you have a relationship with an agent, you can contact them directly. Alternatively, you can call the insurance company’s toll-free number to speak with a representative who can help you (see list below). Canceling by phone is the most widely used method, but some companies may allow you to cancel online. Some insurers also will accept a cancellation request via fax or postal mail. Check with your provider to find out their preferred method.
• Make sure you receive proof of cancellation. After canceling your policy, your insurance company should send you documentation that confirms that the policy is no longer active. You may receive this electronically or via regular mail.
• Wait for your refund. If you terminate your coverage before the end of your policy period, you may be eligible to get a refund for the amount of coverage you canceled. When you speak with your insurance company to cancel, confirm how and when you can expect those funds.

Why cancel: Scenario-based guides for canceling insurance policies

What are some of the reasons you’d cancel your policy? Maybe you found a better rate with another company, or are unhappy with your current provider. Or you’re moving to another state, selling or trading in your vehicle, or planning to stop driving altogether. Here are some common scenarios for canceling your car insurance and how to handle them.

Switching providers for better rates

Insurance rates are competitive, so it’s always a good idea to periodically shop around to ensure you’re getting the best value. Many online marketplaces allow you to compare multiple policies in one place.

If you find a rate better than your current one, secure coverage online or with a licensed insurance agent. Don’t cancel your policy before you confirm your new one is active – and make sure there is a policy overlap around midnight on the day the new policy starts. Usually, once you’ve made your first payment, your new coverage will be immediately effective.

Moving to a new state

Not all insurance companies do business nationwide. If you’re moving to a state where your provider doesn’t operate, you’ll need to find a new policy and cancel your existing one.

Insurance laws vary widely from state to state, so learn about your new location’s insurance laws and coverage requirements. Visit your state government’s website for more information on the regulations where you live, or talk to a local agent to find out more.

You should secure coverage in your new state before you move. Doing so ensures that you’ll be covered from day one as a new resident, and may also be helpful when you’re making other, related changes, like updating your car registration and driver’s license.

Even if you decide to stay with the same insurance provider in your new state, you’ll need to notify them that you’re moving.

Additionally, laws about canceling your policy may be different in your new state, so be sure to check with your provider about any locally specific regulations you’ll need to follow now or in the future.

Selling or trading in your vehicle

You may be canceling your insurance policy because you’re selling or trading in your car, but in most cases you still need to remain insured.

Keep your policy active until you are no longer the legal owner of the car; you’re required to have insurance to sell a vehicle, whether to an individual or a dealership. If there’s a period of time after you’ve sold or traded in your car when you will be without a vehicle, it is still wise to be insured. Again, it’s critical to avoid any gaps in coverage – even short ones – to avoid potential rate hikes in the future.

If you’re putting your car in storage – either short- or long-term – don’t cancel your policy just yet. Some states require drivers to maintain minimum coverage on stored vehicles; if it's registered, it needs to be insured. Check your local laws to make sure you’re complying with them.

A quick note: A non-owner insurance policy is a great option for times of transition if you don’t own a car. A non-owner policy is coverage for people who don't own a car; it provides additional liability protection if you get into a car accident while driving someone else's car. It doesn’t provide protection for the vehicle but will offer coverage in case you’re responsible for an accident that causes harm to people or property.

There are other reasons to cancel - but it’s not always the wise move

There are other reasons to cancel outside of the common ones listed above. If your car has been totaled or you’ll be without a vehicle for a few weeks or months, canceling your policy isn’t wise. Instead, you might be able to save money on a different tier of coverage, such as a non-owner’s policy.

Even if you’re not driving your car, you still need to keep it insured – even with just the minimum coverage.

Finally, if you’ve decided you’re not going to drive at all anymore, once you’ve sold, traded in or given away your (insured) vehicle, you can safely cancel your insurance policy without having to worry about securing a new one first.

Understanding your policy’s cancellation rules

Your policy documentation should clearly articulate what to expect when you want to cancel – that includes notice periods, fees and other considerations. Search for those terms in your policy prior to communicating with an agent so you can be better prepared for an easy cancellation.

Preparing to cancel your car insurance

Before you cancel your policy, you must secure new coverage. It’s against the law for car owners to be without car insurance in almost every state (New Hampshire is the sole exception) – and having even a small interruption in coverage may mean rate hikes in the future. So be sure to find and purchase a new policy before canceling your existing one.

“A lapse in coverage may cause auto insurers to rate you as high risk, even if you have a clean driving record,” says Mark Friedlander, director of corporate communications at the Insurance Information Institute (Triple-I), an industry group. “Keeping continuous coverage will get you the best insurance rate based on your driving record and other common rating factors such as make, model, location, age, claims history and credit record.”

Before reaching out to your provider to cancel your policy, but sure to gather the necessary documents and information, including:

• Current policy information
• New policy information
• Driver’s license number
• Social Security Number
• Proof of vehicle sale if you sold your car
• The date you’d like your coverage to end

Once you’ve completed these tasks, contact your current insurer to inform them that you’d like to cancel your policy.

Once again, the most common cancellation method is via phone. The agent you speak with may try to get you to stay with your current plan or offer cheaper, more convenient alternatives. Still, you’re not obligated to stay and can request to continue with the cancellation process.

If you prefer to speak with an agent face-to-face and your insurance company offers that option, you can typically cancel in person. Some companies also accept cancellation requests by mail. Check with your provider to determine which contact options work best for you.

Mistakes to avoid when canceling

Being well-prepared to cancel your insurance policy can help you avoid oversights, but they could still occur. Common mistakes include:

• Canceling your policy without new coverage in place. Again, having even a small window in which you are uninsured can be expensive – and illegal, if you get behind the wheel. Make sure you’re continuously covered.
• Not adhering to your insurer’s notice period. As mentioned, your provider may require that you give cancellation notice; it’s not always possible to “turn off” your current coverage immediately. Look into what your insurance company requires and plan accordingly.
• Not following up to confirm a cancellation. Your insurer should send proof of cancellation (electronic, hard copy or both). If you don’t receive one, reach out to them and request that they send it to you for your records.
• Overlooking potential cancellation fees. Check the policy you are trying to cancel before reaching out to initiate cancellation so you’re prepared to pay any related fees. These fees are typically around $50 or less.

Next steps following cancellation

The hard part is out of the way, right? You’ve found a new insurance policy you’re happy with and broken up with your old provider. But there are a few more steps you can take to make sure you’ve completed the entire cancellation process.

• Receive confirmation of cancellation. Once again, your old insurance company should automatically send you proof that your policy is inactive. If you don’t receive one within several business days, contact them for this documentation in case you need a record of it in the future.
• Wait for your refund. In your conversation with your insurance company, remember to ask if you’ll receive a refund for unused future coverage on the canceled policy – and, if so, how and when you can expect to receive that refund.
• Notify your lender. If you still owe money on your vehicle, notify the bank with whom you have your auto loan that you’ve changed policies.

Alternatives to canceling your policy

Before you cancel your policy, it can be helpful to know about these options to ensure you’re making the best choice for your circumstances:

• Suspend your policy temporarily. If you’re planning on taking a short break from driving – maybe you’re experiencing an illness or planning an extended vacation – you can temporarily suspend your policy, essentially putting your coverage and payments on pause.
• Downgrade your level of coverage. Depending on your situation, it may make sense to switch to a lower tier of coverage. Work with your insurance provider to determine a reasonable solution. For example, if your limits are higher than you need, such as 300/500/300, downgrading to limits of 100/300/100 would be an option ($100,000 for bodily injury per person, $300,000 for bodily injury per incident and $100,000 for property damage per incident).
• Keep your current policy. If you’re not finding any appealing alternatives as you search for replacement coverage, you may just want to stick with your current plan. It’s always a good idea to periodically shop around to make sure you’re getting the best rates, but don’t cancel your policy if you don’t need or want to. Ask your provider if you’re eligible for discounts, like those for safe drivers or energy-efficient vehicles.

Cancellation fees and refunds: What to expect

Car insurance policy cancellation fees are rare but some carriers charge them, the III’s Friedlander says.

“Insurers that implement early cancellation fees charge between $50-$100 on average if you cancel your policy prior to the expiration date. If you are not clear if your policy is subject to an early cancellation fee, check with your insurance agent or carrier,” he says.

Usually, insurance is paid for in advance. If you’re canceling your policy before it’s up for renewal, you might be eligible to receive a refund for the rest of the term, known as an unearned premium. If your insurance company determines that you still owe money on the policy you’re trying to cancel, they’ll require payment for the outstanding balance before terminating coverage.

Essential tips on how to cancel car insurance with insurers

Find details on canceling auto insurance policies with some of the largest insurers below. For specific details about your policy cancellation, contact your provider directly.

How to cancel State Farm car insurance

• Cancel with an agent or by phone: 800-782-8332
• Cannot cancel online
• Cancellation can be immediate or scheduled for a later date
• No cancellation fee
• Information needed: Current policy information, new policy information, driver’s license, Social Security Number, vehicle bill of sale if applicable

How to cancel Progressive car insurance

• Cancel by phone: 866-416-2003
• Cannot cancel online
• Cancellation can be immediate or scheduled for a later date
• Fees vary; may be none, a flat fee or a percentage of funds owed
• Information needed includes: Current policy information, new policy information, driver’s license, Social Security Number, vehicle bill of sale if applicable

How to cancel Geico car insurance

• Cancel by phone: 800-841-1587
• Cannot cancel online or in the app
• Cancellation can be immediate or scheduled for a later date
• No cancellation fee; North Carolina residents may need to pay based on local laws
• Information needed includes: Current policy information, new policy information, driver’s license, Social Security Number, vehicle bill of sale if applicable

How to cancel Allstate car insurance

• Cancel by phone: 800-676-5456
• Cannot cancel online
• Cancellation can be immediate or scheduled for a later date
• Cancellation fee
• Information needed includes: Current policy information, new policy information, driver’s license, Social Security Number, vehicle bill of sale if applicable

How to cancel USAA car insurance

• Cancel by phone: 800-531-8722
• Can cancel online through your USAA account
• Cancellation can be immediate or scheduled for a later date
• No cancellation fee
• Information needed includes: Current policy information, new policy information, driver’s license, Social Security Number, vehicle bill of sale if applicable

How to cancel Liberty Mutual car insurance

• Cancel by phone: 800-290-8711
• Cannot cancel online
• Cancellation can be immediate or scheduled for a later date
• Cancellation fees vary by state
• Information needed includes: Current policy information, new policy information, driver’s license, Social Security Number, vehicle bill of sale if applicable

Frequently asked questions

Can I cancel my car insurance anytime?

Yes. Other than a possible cancellation fee, there’s no penalty for canceling your car insurance before your policy is up for renewal. 

What happens if I stop paying my premiums without formally canceling?

This is not recommended. If you stop paying your premiums, your insurance company will probably cancel the policy after a certain period of non-payment. However, having a history of missed or late payments may cause your rates to jump in the future. It’s best to contact your insurer and initiate cancellation.

How does cancellation affect my future insurance rates?

There’s no penalty for going through the appropriate channels to cancel your insurance policy the right way. In fact, comparison shopping for competitive rates and switching providers when it makes sense for you is a great way to ensure you’re getting the best price for the coverage you require.

Will canceling my policy affect my credit?

Canceling your policy won’t affect your credit score. However, missing or making late payments might have a negative effect, so be sure you stay current.

Bottom line

Canceling your car insurance can be the right decision – and it’s not as daunting as it may seem, provided you’re well-prepared.

A few key takeaways to remember when thinking about canceling your car insurance: Remember to secure new car insurance before canceling your current policy and be sure to follow your insurance company’s process, as well as state laws, regarding notice periods, method of cancellation and cancellation fees.