Car insurance policies can be terminated for a variety of reasons. If you are moving or relocating to a different state, selling or junking you car, of just want to try a different insurance company, you’ll need to cancel your old policy. It’s important however to follow some guidelines and do it properly.
For most insurance companies, the standard practice is to allow you to cancel your policy at any time during by sending written notice with the date you want cancellation to be. Insurance policies don’t necessarily end at the end of the policy term, so you don’t want to assume that you are cancelling by simply failing to pay your next bill.
You also shouldn’t expect this to be clear on your policy. Most insurers will be quick to let you know that your coverage terminates at the end of the policy period if you don’t pay your premium, but they aren’t always so quick to let you know of the repercussions you may face for not providing formal notice of your policy termination.
You should also recognize canceling your policy, particularly if done improperly, can impact your chances of getting good auto coverage in the future. Canceling your policy through default may get you labeled as a high-risk applicant. The best way to avoid this trap is to make sure you are terminating your policy properly and in a timely manner.
If you’re planning to switch coverage to a different insurer, and you want to continue to drive your car throughout the process, you’ll have to make sure you don’t allow a lapse in your car insurance coverage. Be careful to coordinate your new policy’s start date on or before the termination date of your old policy.
Providing you are considerate about giving proper notice to your old insurance company when you want to cancel your auto policy, and go through the official termination process, you probably won’t have to worry about any potential negative repercussions.
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Tags: auto insurance, automobiles, car insurance, cars, cars and trucks, insurance, personal finance