D. Gilson is a writer and author of essays, poetry, and scholarship that explore the relationship between popular culture, literature, sexuality, and memoir. His latest book is Jesus Freak, with Will Stockton, part of Bloomsbury’s 33 1/3 Series. His other books include I Will Say This Exactly One Time and Crush. His first chapbook, Catch & Release, won the 2012 Robin Becker Prize from Seve...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Sep 9, 2021

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Just the Basics

  • It is okay to cancel your car insurance if you’re planning on switching to a new company
  • Getting rid of your car insurance coverage is risky, so take precautions to ensure you do not have a lapse in coverage
  • Most drivers find it hard to know how to cancel car insurance without charges, so make sure to cancel during periods where you won’t be penalized

Many drivers wonder, is it bad to cancel car insurance? Car insurance cancellation laws vary, and it’s important to stay informed on your local regulations.

There are many reasons you may want to cancel your current car insurance coverage. You may have moved to a new area, found a better offer from a different company, or even sold your car. It can be hard to know how to cancel insurance without charges or fees.

There are some limitations to canceling your car insurance. In some situations, it would be best to maintain your coverage or alter your policy. The last thing you want after an auto accident is to realize you have no coverage.

If you’re looking to cancel your car insurance policy, it’s important to do so quickly. If you push it off, you may find yourself hit with bills for unpaid premiums or extra fees. These charges can even impact your car insurance rates down the line.

Before you learn more about if it is bad to cancel car insurance, enter your ZIP code above to compare local car insurance rates for free.

When is it bad to cancel car insurance?

Car insurance cancellation laws require that insurance companies provide you with 15 to 30 days of notice before they cancel a policy due to nonpayment. Thankfully, you do not need to extend the same notice to them.

It is relatively easy to cancel car insurance, and most providers allow you to do so any time. Unfortunately, after the initial 14-day trial period, you will likely be charged fees if you choose to cancel before the end of the term.

Though you may want to, it’s not always the best idea to cancel your car insurance. You may think you no longer need coverage, but in most situations, you still do.

Here are some instances where canceling your insurance policy would be detrimental:

Canceling Car Insurance Because You Don’t Drive Much

The frequency that you drive does not affect your need for car insurance coverage. Even if you rarely ever get behind the wheel, you still need to be protected from accidents, damages, and other incidents.

Car insurance is immensely important, hence why it is required in almost every state. Those who drive infrequently may qualify for certain discounts through their insurer; check with your agent for more information.

Canceling Car Insurance Because Your Car Is Being Stored

If you’re planning to go on a long trip or need to leave the country for work, you may want to cut costs by canceling your policy.

However, it is still a good idea to keep your policy, even if you aren’t using your car. If your car is registered, it still needs insurance.

You should also protect your car from damages due to natural disasters or “acts of god,” even if it is in storage. Learn more about elements and terms to help you understand your policy before dropping your policy completely.

Canceling Car Insurance When Moving to a State That Doesn’t Require Car Insurance

Most states in the U.S. have some level of car insurance required for all drivers. There are only two exceptions to this rule:

  • New Hampshire
  • Virginia

Drivers moving to these two states may be tempted to cut their losses and drop their coverage completely.

However, car insurance not being required doesn’t make it any less important. As the Insurance Information Institute states, you have a financial responsibility, don’t take chances by being uninsured.

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When should you cancel your car insurance?

Your personal circumstances will dictate whether it’s a good idea to cancel your policy. No matter the reason, drivers should plan ahead for how they will deal without coverage. Considering these factors can save a lot of time and money in the long run.

Canceling Car Insurance When Moving to a State Not Covered

If you are moving to a state that your current car insurance company doesn’t service, you will need to find a new insurer. This should be a high priority when making accommodations in your move.

Try to arrange for a new policy at least two weeks ahead of time to prevent a lapse in coverage.

Canceling Car Insurance When Getting Rid of a Vehicle

Whether you sell your vehicle or simply no longer have it around, it’s a good idea to cancel your car insurance. It is good practice to wait to cancel until the new owner has fully taken possession of the vehicle. Once the title has been transferred over, you can make your policy alterations.

Canceling Car Insurance When You Find a Better Deal

If you have your eye on a better rate, it can be tempting to switch providers. It’s usually best to secure a new policy before dropping your current insurer. The best time to execute the switch would be during the end of a policy term.

If you are dissatisfied with your current rate, start researching new companies about six to eight weeks prior to the end of policy term. That way you will have ample time to select and secure new coverage.

Before making the switch, be sure to review how to reduce the cost of auto insurance in the first place.

Canceling Car Insurance When You Need Less Coverage

Drivers with older or less maintained vehicles may consider removing their optional policies such as collision and comprehensive coverage. These are very important policies, and dropping them can be pretty risky.

If you do discontinue collision and/or comprehensive coverage, you will most likely have to pay for any damages to your car out of pocket. Be prepared financially before canceling your optional coverage.

If you do intend to permanently cancel your car insurance coverage, talk to an insurance agent to discuss your options. Missing coverage can sometimes put a driver in a dangerous legal or financial situation.

There are many factors that affect the price of car insurance, and an agent can help you decipher what is best for you.

Now that you know more about if it is bad to cancel car insurance, enter your ZIP code below to instantly compare car insurance rates near you.