There are numerous reasons why one might want to cancel auto insurance, from having sold a vehicle to its having been totaled in an accident, and even simply switching insurance companies. Whatever the reason, canceling auto insurance the right way is equally as important as purchasing insurance so that overpaying or carrying overlapping coverage is avoided.
Vehicle Sold or Given Away
When a vehicle is sold to a second party, the owner must cancel insurance coverage. To cancel your auto insurance in this manner, it is necessary to first contact your insurance agent and let them know on what date the vehicle will no longer be in your possession. This date will be the date of sale that is noted on the title of the vehicle. On that date, it is then the responsibility of the person who takes possession of the vehicle to have insurance.
Vehicle Totalled in an Accident
If the vehicle is totalled by your insurance company, the insurance policy will automatically cancel on the date that the vehicle is inspected and determined to be a total loss. Until the appraiser makes this determination, however, it is critical to maintain the coverage on the vehicle. In general, it only takes a few days for an appraiser to be dispatched to do the inspection, so you will not lose money by waiting. Once the loss is verified, there is nothing that needs to be done by the owner of the vehicle with regards to cancelling or reinstating insurance. It will be handled automatically by the insurance provider.
Changing Insurers on Car Insurance Policy
When changing auto insurers, you must cancel your auto insurance with your current insurer. This is typically done as a customer service by the new insurance company, though. To streamline the changeover process, insurers offer this service to make the process as user-friendly as possible.
Whatever your reasons for canceling your auto insurance, remember that you must legally carry coverage to drive the vehicle. While you can cancel the coverage at any time you want, you cannot then drive the car. The fines that are levied for driving without insurance alone make carrying coverage worthwhile.