All you need to know about auto insurance cancellation
Having your insurance company cancel your auto insurance isn’t an ideal situation since it can be a black mark on your record.
This will make it harder for you to get new insurance and you might have to end up paying higher premiums than before.
Knowing about the factors which contribute to insurance cancellation can help you avoid getting your auto insurance canceled or appeal if it has been wrongfully canceled.
Given below is everything you need to know about auto insurance cancellation.
What Are The Reasons For Auto Insurance Cancellation?
Your insurance company can cancel your auto insurance if you don’t adhere to the state laws or pay your premiums on time.
Apart from this, there are other reasons your auto insurance could be canceled.
You provide wrong information about your vehicle – If your insurance company finds out that you have given them wrong information about your vehicle, they have the right to cancel your policy. You might also fail to receive compensation in case of accident or damage.
You make a false claim – Making a false claim is considered as a serious offense and can get your policy canceled.
Your license gets suspended or revoked – If the state suspends or revokes your license, your insurance company has the right to cancel your policy.
You violate traffic rules constantly – If you break traffic rules all the time and get too many speeding tickets within a certain time frame, your insurance policy might get canceled.
Your health status changes – If you are diagnosed with a condition which makes you unfit to drive and you still drive, your policy will be subject to cancellation.
How Do I Cancel My Auto Insurance?
You might want to cancel your car insurance because of the following reasons.
You want to sell your car – You will need to cancel your old insurance policy and get a new one.
You are moving – If you are moving out of state and your current insurance company doesn’t offer policies in your new location, you will have to find a new company.
You are not satisfied with your insurance company – Some people end up being dissatisfied with their insurance company because of reasons like high premiums or high waiting periods.
If you want to cancel your insurance, go through your insurance company’s cancellation requirements.
You will need to draft a formal letter with important details like date of notice, name of the insurance company, contact information, policy number and coverage period.
In your letter body you should mention when you want your policy to be canceled and put in a request for refund of unused premiums.
Make sure you follow the procedure laid down by your company for cancellation. This might take one to two weeks if all important documents are submitted on time.
How Do I Get New Auto Insurance After Cancellation?
Once you cancel your car insurance, it is important to get a new one without any delay to avoid higher premiums or penalties.
Compare different insurance companies and policies to decide which one is the best for your needs and budget.
States like California and Arizona rank at the top of the list for having high insurance costs but with proper research and tools, you can definitely find a plan for your budget.
Make sure you know the car insurance requirements of the state you reside in. For example if you reside in Arizona, adhere to all the car insurance requirements in Arizona.
If your insurance was canceled because you violated certain terms or you are considered as a high-risk driver, it might be a little more difficult for you to get insurance.
You can consider a residual market which serves high risk drivers but your premiums might be higher than before.
How Do I Receive A Refund After I Cancel My Car Insurance?
If you cancel your insurance before the start of your policy, you will receive a full refund minus the processing fees for cancellation.
If you cancel after your policy term starts, you will receive your refund on a pro-rata basis.
Depending upon your preferred payment channel you will receive your refund within one to two weeks.
If you feel that your auto insurance has been canceled without any justification, you can send a formal complaint to your state’s insurance department. If a legitimate reason is found, you will have to start looking for a new policy.
We hope this information helps you take the next step wisely.