Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Most insurance companies will accept a telephone call as an order to cancel an auto policy. Some may require a signed form but even that should be available over the internet or directly from your agent. If you want the policy cancelled on a date other than the current date, additional information might be required. For example, if you call the company and tell them that you sold the car 45 days ago. They might require a bill of sale, to back-date the cancellation.
Yes, you can cancel your auto insurance policy at any time. If you bought the insurance through an agent, you can simply call them and tell them you need to cancel your policy. If you bought the insurance directly from the insurance company, you contact them.
There are two considerations. The first has to do with the amount of premium refund you will get if you cancel the policy prior to the expiration date. In most states, if the insured cancels a policy before the expiration date, the return premium is calculated on what is known as a "short rate" basis. The short rate calculation may include an extra 10% to the insurance company to cover the expense of cancelling the policy.
The second consideration is whether the auto has a lien against it. If you still owe money on your car, your lender will require that you replace the cancelled insurance right away with a new policy. And you can't hide this from the lender because the insurer you cancel with automatically notifies the lender that the insurance has been cancelled.
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There are two considerations. The first has to do with the amount of premium refund you will get if you cancel the policy prior to the expiration date. In most states, if the insured cancels a policy before the expiration date, the return premium is calculated on what is known as a "short rate" basis. The short rate calculation may include an extra 10% to the insurance company to cover the expense of cancelling the policy.
The second consideration is whether the auto has a lien against it. If you still owe money on your car, your lender will require that you replace the cancelled insurance right away with a new policy. And you can't hide this from the lender because the insurer you cancel with automatically notifies the lender that the insurance has been cancelled.