How to Cancel Car Insurance

Refunds and cancellation fees

If you paid ahead, you may be owed part of the premium back. Policies use one of two methods. Pro rata means you get back the unused premium for the days left. Short rate means the insurer keeps an extra amount as a cancellation charge. Your policy or your agent can tell you which applies.

If you pay monthly, there may be nothing to refund, but make sure no new payment is drafted after the cancellation date. Turn off automatic payments only after the cancellation is confirmed.

Cancelling mid-term or at renewal

You can usually cancel a personal auto policy before the term ends. Fees and refund rules depend on the policy and the state. Cancelling at renewal is simpler, but don't just let the policy lapse: many policies renew automatically, and some insurers keep billing until they hear from you. Tell them in writing that you won't renew.

When you sell the car

If you sold the car and don't have another one, ask the insurer to cancel as of the date the sale was final, and keep the bill of sale. Check your state's rules on plates and registration first. Some states expect a registered car to stay insured, so you may need to return the plates or cancel the registration before you drop coverage.

If you're replacing the car, you usually don't need to cancel at all. Call the insurer and swap the vehicle on the policy.

GAP insurance is a separate cancellation

GAP coverage bought through a dealer or lender usually isn't part of your auto policy. It has its own cancellation steps and refund rules, often tied to the loan.

Read our GAP insurance guide

What to put in a car insurance cancellation letter

A cancellation letter has one job: make it impossible to argue you didn't ask to cancel. Keep it to one page and include these details.

• Your full name exactly as it appears on the account.
• Your account, member, contract or policy number. If you can't find it, the address and phone number on file help them match you.
• A plain statement that you are cancelling. Use the word cancel, not pause, freeze or downgrade.
• The date you want the cancellation to take effect.
• A request to stop all billing after that date.
• A request for written confirmation, with the email and mailing address where you want it sent.
• Your signature and the date you signed.

Leave out your reasons unless the contract asks for them. A reason gives the company something to argue with or a retention offer to make, and you don't owe one.

Address the letter to the place the contract names for notices. That can be a corporate office, a third-party administrator or your home location, and it is not always the address on your bill. Payment addresses often go to a processing center that never reads mail.

Why send it USPS Certified Mail

USPS Certified Mail gives you a mailing receipt and a tracking number, and the Postal Service records when the letter is delivered. That record is what you point to if the company says it never got your notice.

Some contracts require certified mail. Others only ask for written notice, and certified mail is still the safest way to send it. Some contracts count notice from the day the letter arrives and others from the postmark date. The USPS record shows both.

Regular mail leaves you with nothing to show. A letter can sit in a mailroom, get misrouted or get thrown away, and you have no way to prove when, or whether, it arrived.

When we mail a letter for you, it goes USPS Certified within one business day of your order, and we email you the tracking number. You can follow it on the USPS site until it's delivered. The price is $29, paid when you order.

If your insurer keeps drafting payments

Check the dates first. A charge that covers your notice period or the last billing cycle may be allowed by your contract. A charge for a period after your cancellation date usually isn't.

1. Contact the company in writing. Say when you cancelled and how, and ask them to refund every charge after your cancellation date. Include your proof.
2. If they don't fix it, dispute the charge with your bank or card issuer. Give the cancellation date and send the proof: a copy of your letter and the USPS delivery record, or the confirmation number from your call.
3. If charges keep coming, ask your bank whether it can block future payments to that company.
4. File a complaint with your state attorney general's consumer protection office. It creates a record, and some companies respond faster once one is filed.

Banks and card issuers set deadlines for disputes, usually counted from the statement date. Don't wait for several months of charges to pile up before you act.