Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • While state law mandates that you have to have car insurance, there is no requirement for you to stay with a particular company
  • You are free to switch auto insurance companies at any time as long as you are keeping the required amount of coverage and do not drive on public roads without it
  • If you decide to stop your current coverage early, it is your responsibility to notify your insurance company so that they may process your cancellation. You will be able to get your premium returned to you, but there may be a small fee associated with processing your early cancellation
  • If you get car insurance through a new company, there cannot be any period of time that you are uncovered if you plan to drive. This means that you cannot cancel your existing policy without having coverage through a new car insurance company

You are certainly allowed to cancel your car insurance policy at any point. In fact, if you have a copy of your car insurance policy, there is probably a provision in there dealing with early cancellation of the car insurance policy.

You might pay a small fee to do so, but you can get whatever part of your premium you haven’t used back. The crucial thing in canceling your car insurance policy is that you are not allowed to drive without being insured. If you are going to keep driving, you need to have different coverage ready to go.

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Canceling Your Current Car Insurance

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If you need to find out when your current car insurance policy expires, check your insurance card for the effective dates.

When you cancel your car insurance policy early, a small fee may apply. Check your car insurance policy or call your agent to find out the exact amount. Then you can decide if you still want to car insurance policy early or wait until the end of the policy term.

To cancel your car insurance policy, call your agent and let the insurer know. You do not want to continue paying the premium for your car insurance policy if you do not need it.

If you do not notify your insurer, however, they will not know that you found another car insurance policy and no longer need coverage, so you could be stuck paying the premium still.

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Lining Up Another Auto Insurance Company

As long as you still need to drive on public roads, you need to get another car insurance policy if you cancel your current one early. If you need help identifying the car insurance companies that operate in your state, you could check with the state insurance commissioner.

One of the popular reasons that you may need a new car insurance policy is if you are moving across state lines and your current car insurance company does not do business in that state.

At this point, it is a good time to re-evaluate your car insurance coverage needs and make sure that you are fully protected. You want to have coverage during your move, especially if you are driving a moving vehicle.

When you go to get a different car insurance policy, you need to make sure that there is not any time that you will be driving between when your current policy ends and the new one picks up coverage.

If you have a claim during the timeframe when you are not covered, you may not be able to recover under any car insurance policy for that claim. The best way to make sure that this happens smoothly is to start your new car insurance policy right away and then notify your previous car insurance company that you have switched.

Getting a Good Rate on Your New Policy

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Another popular reason to get a different car insurance policy is that you can get a better rate by switching to another company.

When you switch your car insurance policy, consider the other insurance policies you may have. For instance, if you have a home owner’s insurance policy or a boater’s insurance policy, you may want to use the same insurer for all of your policies. Bundling multiple policies gets you a much better rate from most companies.

Your new car insurance company typically takes care of notifying the state that you have switched companies and are maintaining the required coverage.

Just in case, you will want to keep all of your policy documents for your records. The most important papers to keep are your car insurance card and a copy of the actual car insurance policy itself. That has all the information about your coverage and requirements for filing a claim.

The Bottom Line on Cancelling Your Auto Insurance Early

It does not take much time at all to cancel your auto insurance policy early. You can do this by calling your insurer and letting them know that you want to cancel your coverage.

Your insurance company will be able to tell you if they charge a fee for early cancellation of your policy and what that fee is. You may want to wait to cancel until you do not have to pay the termination fee and you have another insurance company all lined up.

Going any period of time without the required coverage could be very costly in the long run.

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