You might want to cancel your auto insurance policy for a number of reasons. Maybe you are moving to a different state or maybe you have decided to go in for a different auto insurance carrier or you might even be getting rid of your vehicle altogether. But what you need to know is that if you do not give sufficient notice to your insurance provider, it will end up costing you a lot more money and also adversely affecting your credit history.
The only way to cancel a policy on amicable terms is to send a written statement to the insurance company stating that you would like to cancel the policy on a certain date. You will need to give them at least a months notice. You might be under the impression that if you stop paying your installments for the premium, the policy will automatically get terminated. But this is not the case. You will be billed for the next time period and it will also go on your credit history. A bad credit history will make it very difficult to get an affordable auto insurance policy.
And what’s even worse is that once you get a bad credit history, there is nothing you can do about it. You cannot remove it from your record ever. And in order for people to overlook it and disregard it, you will have to wait for at least 5 years and you need to maintain an untarnished profile during this period.
It is very common for auto insurance agents to say that your policy will be automatically terminated at the end of your coverage period. But what they do not say is that there will be repercussions if you do not take proper action.
Another problem with letting your policy to be terminated is that it will make it difficult for you to get future auto insurance policies. If you terminate your policy, you will be marked as a high risk candidate and it will become both very expensive and difficult for you to get future insurance policies.
When you have decided to cancel your policy, the first thing to do is to call the insurance company and let them know that you would like to cancel it on a certain date. After you do this, they will send you a cancellation form which you will have to fill up and return to them.
If you are switching to a new policy, then you will need to make sure that you are covered throughout the transition from one policy to the next. Make sure that you coordinate the end date and the start date of the new policy such that you are not left uninsured during any period. It would be really unfortunate if you end up having an accident during the interim period when you have no coverage.
It may seem trivial to get covered for a few days in the interim period, but accidents are never planned. You have been paying your premium diligently for years and then suddenly you end up without coverage. This will be a huge blow to your finances. And besides being expensive, it will also be illegal. It is illegal in all states of the country to be driving without insurance. Even if the accident is not your fault, your license can be suspended and you will be made to pay heavy fines for the fault.