Canceling Your Car Insurance? Here’s What You Need to Know

When premiums start to rise, it can make you consider canceling your policy and choosing a different insurance company. While it’s true you can shop around at any time for new coverage, it’s important to make sure that you don’t have a lapse in coverage for even a day. Here are important things to consider about canceling car insurance.

When to Cancel

Although you can technically switch insurance companies whenever you want, to avoid any possible penalty fees, it’s best to cancel at renewal time. For the smoothest transition, you should set up a new policy first and make your first payment before canceling your old policy. Your reason for canceling and the timing will determine whether you pay a penalty. Each insurer has its own policy regarding penalties, but quickly canceling after purchasing a plan will most likely way trigger a cancellation fee. It is always good to know the cancellation policy of any company you are looking to be insured with.

You might consider canceling your insurance if you get rid of your vehicle and opt to use public transportation or other alternatives. Although a traditional policy is no longer needed, you may want to consider purchasing a non-owners policy that offers liability protection during the period in which you do not own a vehicle.

Avoiding a Lapse in Coverage

Most states require that drivers carry insurance at all times. Driving without insurance creates various risks, both legally and financially. If you’re caught driving without insurance, it can be difficult to find a new insurer since you will be placed in the high-risk category. It’s imperative when you decide to switch carriers that you have your new car insurance policy already in effect. Even one day of no insurance counts as a lapse in coverage! Talking with your insurance agent will help clarify your coverage needs and ensure you won’t go a day without coverage.

Meeting Changing Needs

An individual’s car insurance needs may change over time, depending on where they live and how far they drive to work. Many people are driving much less during the pandemic either because they work from home or their employer offers fewer hours. With tighter budgets and less income, many people are looking for ways to cut monthly expenses.

If your driving miles have decreased significantly, ask your insurance agent about lower rates. Many insurers now offer telematics programs in which the insurance agency monitors driving miles and driver behavior with a connected digital device. You can get reduced rates if the data confirms that you’re a safe driver or drive minimal miles on the road.

Options Besides Cancellation

Just because you have a bad experience with a car insurance company doesn’t mean you need to cancel right away. It is wise to spend time researching other companies before you make any decisions. It’s possible that the insurer raised your rate for the same reason other companies would raise your rate. Getting a speeding ticket, for example, can raise rates regardless of the insurer.

If you intend to save money, you don’t necessarily need to jump to another company. First, look at your policy and consider reducing coverage in certain areas. If you’ve paid off your vehicle, you may not need comprehensive coverage and can switch to minimum coverage. Cutting things like towing and roadside service is another option, especially if you do not drive.

There are many reasons to want to cancel your car insurance. It is important that you do it the right way to help avoid any negative consequences. Do you have any questions when it comes to your auto insurance policy? Call the professionals at Kneller Agency today to get started on quality coverage you can count on.

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