How to Cancel Your GEICO Car Insurance Policy

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Can I Cancel My Car Insurance at Any Time?

The best time to cancel your car insurance is after you have another policy set in place. While you can cancel your coverage any time, there are some cases where you may have to pay a penalty. For instance, this is common if you cancel within 14 days after getting your new policy.

Cancellation fees can vary from a set dollar amount up to a percentage of your overall premium cost. The good news is that fees are usually not charged for a standard cancellation, but policies vary.

Talk to your insurer about cancellation, and find out whether you'll be charged any penalties or still owe money on the policy.

If you cancel your insurance within the grace period, it is likely you will still owe money on the policy. A grace period provides coverage for a certain number of days past your payment due date. It also allows you extra time to get your premium paid, but that doesn’t mean you can get a free few weeks of coverage just by switching insurers. The only way to get out of paying for those days is to provide proof of coverage through another carrier for that time.

Warning Just because you can cancel your car insurance at any time, that does not mean you should. Going without car insurance can put you into a high-risk pool in many states when it comes time to purchase car insurance again.

3. Compare car insurance quotes from multiple carriers

If you have decided it’s a good time to change carriers, the first thing you might want to consider doing is getting quotes from several different auto insurers. The Insurance Information Institute (Triple-I) recommends you get a minimum of three quotes when shopping for your coverage. This will allow you to compare auto policy premiums, coverage options and discounts. Just make sure you are getting quotes for the same coverage, so you are comparing apples-to-apples premiums. Whether you are getting quotes online, by phone or at an agency, you’ll likely need to be prepared with some basic information:

  • Address where the car will be stored
  • Vehicle year, make and model
  • Vehicle Identification Number (VIN)
  • Driver’s license or Social Security number (auto insurers will use this information to review your motor vehicle record and any other personal factors that might affect your premium, such as your credit-based insurance score in some states)

As you are researching companies, you can also review available discounts. Asking companies to include all the discounts you qualify for on a quote could help you to find cheaper coverage.

Learn more: Average cost of car insurance

8. Print out your new car insurance ID cards

Once you have officially canceled your old policy and started your new one, you’ll likely want to switch out your old insurance ID card for an updated one to keep in your vehicle or wallet. If you get stopped by law enforcement or become involved in an accident, you will need proof of coverage under your new auto insurance provider.

3. Get Confirmation of the Cancellation

When you request to cancel your car insurance policy, you can generally expect it to happen. But it’s still important to ask for confirmation so you have something to fall back on if you get charged again or run into other issues.

You’ll first want to get confirmation from the agent or customer service representative about when the policy will be canceled. If you’re replacing it with a new policy, make sure there’s no lapse in coverage—we’ll cover why in a minute.

You’ll also want to receive written confirmation after the policy has been terminated. You may receive this in the form of an email or a letter in the mail. Check with your carrier to find out how it generally handles confirmations.

Downsides to not canceling insurance properly

Not canceling your policy accordingly leads to problems. Here are a few reasons to make sure you cancel the right way:

Grace period costs: If you fail to properly cancel your policy and don’t make a payment at renewal time, you will eventually be canceled for non-payment. “Don’t let your policy just lapse for non-payment,” Walden says.  “A surprising number of people think that they can stop paying their insurance premium and their provider will eventually drop them. This is a mistake. The company will continue to insure your vehicle, and they’ll continue to charge you for coverage,” Walden says.

Many insurance companies automatically put a policy into a “grace period” at renewal time if they don’t receive a payment. This extends the policy for 20 days in the event you forget to send a payment or if it gets lost in the mail.

This grace period ensures you’re not driving without insurance because of an overlooked payment. If you’re switching insurers though and have no intention of sending in a renewal check, you could be on the hook for the grace period premium. Once the grace period has ended, your insurer will cancel your policy and send you a bill for the 20 days of coverage.

In most cases, it’s possible to avoid paying for the grace period but you will have to contact the insurance company and show proof of your new policy.

While it will depend on the terms of your policy and state laws, it’s very likely that if you show proof of another policy being in place, your insurer will just cancel your policy or non-renew you back to that end date of your policy, waiving the grace period fees.

You may end up paying for both policies: This usually pops up if you pay for your current car insurance via electronic funds transfer. If you fail to notify your insurer that you’re canceling your policy, the policy will simply renew on your renewal date. They will take the money from your account.

The good news is that you can usually get that money back by sending proof of your new coverage to your old insurance company. Nevertheless, it will most likely require a few phone calls and lots of time.

Flag for non-payment: If you decide not to contact your current insurer and don’t pay your premium, your old insurer will cancel your policy and drop you as a customer. However, cancellation for “non-payment” can be an issue in the future.

Non-payment cancellations are a red flag on your insurance record. It may result in insurers considering you a higher risk and charge you higher premiums. Or you could even get denied for another policy. It’s always best to cancel your current insurance the right way to avoid issues in the future.

When should you cancel your auto insurance after selling a car?

You should cancel your auto insurance after you've signed the title over and surrendered your plates to the DMV. However, if you're planning on buying another vehicle soon, it might make more sense to switch your coverage to non-owner auto insurance until you've purchased your new vehicle.

How to Cancel Your Auto Insurance Policy

If you still need auto insurance but want to switch providers, it’s crucial to nail down coverage before getting rid of your current policy. You’ll want to make sure your new coverage begins when the previous coverage expires. Your new insurer can coordinate the time new coverage will begin with the expiration of the previous policy.

Once you secure a new policy, contact your current insurance company to verify its cancellation process. You may be asked to put your cancellation request in writing, for their records.

You’ll want to understand your insurer’s specific procedure to make sure you correctly terminate the policy.

Do insurers charge cancellation fees?

Most insurance companies will not charge a cancellation fee for cancelling a car insurance policy or a specific coverage. However, some may charge a flat fee, usually less than $100, or a short rate fee for cancelling auto insurance early.

Insurers use a proprietary “short rate” to calculate their earned premium when policyholders cancel their car insurance prior to the policy’s expiration date. The short rate is multiplied by the premium remaining on your policy.

A 15% short rate applied to a cancellation of a 12-month policy nine months after initiation would be 15% of the remaining 3-month premium. A 10% short rate applied to a cancellation of a 6-month policy four months after initiation would be 10% of the remaining 2-month premium.

Some insurers let you avoid the cancellation fee if you wait to cancel until the date your policy is set to expire.

What Happens When You Cancel Your Policy?

When you cancel an auto insurance policy, your insurer will likely notify your state that you and your vehicle are no longer insured. Because it’s illegal to drive without insurance in virtually every state, your state’s department of motor vehicles may ask you for proof that you either sold the vehicle or have obtained other insurance. If you don’t respond, then the state can suspend your registration and driver’s license. In some states, you also may be required to return your license plates.

If you still have time left on the policy, your insurer may issue a prorated refund of the premium that you paid most recently. However, some insurers also charge a cancellation fee if you want to get out of your policy early.

If you’re switching insurance companies, make sure to have the new policy lined up before you cancel the old one—and tell the new insurer exactly when your old policy is set to expire. Lapses in car insurance are illegal in many states and can result in fines. If you have an outstanding car loan or lease, you should also notify your lender that you have changed insurers.

If you’re cancelling your policy because you’re moving to a new state, note that you will typically have to show proof of insurance when you register your car there. States have different rules regarding the types and amounts of insurance that you’re required to carry.

The Bottom Line

There are several reasons to consider canceling your car insurance, but it’s important to walk through each step to make sure you do it correctly and receive confirmation that it’s been completed.

It may also be a good idea to have another policy in place, even if you’re selling your car, to avoid the potential consequences of not having any coverage at all. Compare quotes with different insurers to get the best deal if you plan to leave your current insurer. Think carefully about your situation and future driving plans to determine the best approach.

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