How to Cancel an Auto Insurance Policy

by Neil Kokemuller

The process of canceling an auto insurance policy typically involves communicating your intent as directed by your insurer's policies. Before canceling, check on any cancellation fees and prepare to receive additional information from your existing provider before the policy is terminated.

Cancellation Approaches

Because of the competitive nature of the industry, insurance companies have generally relaxed the requirements for consumers to terminate their policies. Therefore, you may be able to communicate your desire to cancel with a simple phone call to your provider. If you work through an independent agent, call him. He may be able to take care of the cancellation on your behalf. Esurance indicates on its website, for example, that clients can call an 800 number to discuss their cancellation request with an agent.

In some cases, insurers have a more formal cancellation-request process. This may involve completion of a cancellation form or submission in writing of your intent to cancel. Alternatively, you can complete the form electronically or send an email documenting your request. In these cases, the insurance company just wants tangible evidence of the request to guard against any miscommunication or confusion. Companies normally outline cancellation processes on their websites. For example, 21st Century Insurance invites customers to cancel by email, fax or regular mail, outlines details to include in the request and provides all contact details on its website.

Penalties and Refunds

Some insurance companies have early-cancellation penalties if you cancel before your contract term ends. Fees vary, but $25 to $50 is a common range, at the time of publication. Typically, if you pay your insurance in full for six months or a year, you are entitled to a refund of the unused portion at the time of cancellation. If you owe a penalty or cancellation fee, the insurance company may deduct it from your refund amount.

New Policy urges auto insurance customers to have a new policy in place before canceling an existing one. This approach helps guard against gaps in coverage, which is important, since most states legally require liability protection. An independent agent normally manages the cancellation and new policy start at the same time.


To prevent a coverage gap, some insurance companies require you to provide a new policy number as part of your cancellation request.

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About the Author

Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.