July 1, 2009

If you are looking to save money on car insurance quotes, one of the best ways is to switch companies. Also, if you are looking for a new company due to a recent move, not being satisfied with your existing one, not being able to afford the rate, or any other reason, understanding the proper way to cancel an auto insurance policy is very important.

There is a right way to cancel an auto insurance policy and many wrong ways. Of all the wrong ways, stopping your premium payments is by far the worst.

According to a recent article on InsuranceAgents.com, “Simply ceasing payment on your auto insurance policy and not contacting your insurance company will cause your carrier to take it upon themselves to cancel your policy. What’s the downside? The failure to pay your policy’s premiums on time will go on your credit report. And it’ll make it harder for you to find another carrier to insure you.” 

Instead, you will want to contact your current auto insurance company and let them know you want to cancel your existing policy with them and it’s important that you also define a date that you want your policy to terminate on.

Try to comply with all the cancellation procedures the company may ask of you, because the sooner you fill out and return any forms or answer their questions, the sooner you can be released from your financial commitment to them.

Make sure before all the cancellation procedures are complete that you have asked for any potential refunds that you are owed. Some insurance companies do not pay out refunds, so you will need to discuss your options with your agent.

Lastly, and most important of all, do not cancel your existing policy until you have lined up a new one! The InsuranceAgents.com article says, “[D]o not drive your car on the road until you obtain the new policy. It is illegal in most states to drive a car without auto insurance,”

For more information, please visit InsuranceAgents.com.