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Fact Checked
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Kudos has partnered with CardRatings and Red Ventures for our coverage of credit card products. Kudos, CardRatings, and Red Ventures may receive a commission from card issuers. Kudos may receive commission from card issuers. Some of the card offers that appear on Kudos are from advertisers and may impact how and where card products appear on the site. Kudos tries to include as many card companies and offers as we are aware of, including offers from issuers that don't pay us, but we may not cover all card companies or all available card offers. You don't have to use our links, but we're grateful when you do!

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Special Offer:

How to Cancel Car Insurance — And Know When It’s the Right Move

Get tips to avoid penalties, lapses in coverage, and costly mistakes before you cancel.

July 1, 2025

Small Kudos square logoAn upside down carrot icon
Person inside a car on a field

Steps to Cancel Your Car Insurance

1. Prepare Before You Cancel

Before pulling the plug on your auto insurance, get a few things in order. If you’ll still be driving (now or in the future), line up a new policy first so you aren’t left uninsured. Nearly every state requires car insurance to drive legally, and having another policy in place prevents a lapse in coverage. Check your current policy for any cancellation requirements or fees, and note your policy number and renewal date. It’s also wise to review if you’ve paid ahead – you may be due a prorated refund once you cancel.

2. Contact Your Insurer to Cancel

The only way to officially cancel is to notify your insurance company. Call your insurer’s customer service or your local agent and say you want to cancel your car insurance policy. They’ll guide you through the process – some companies can cancel immediately over the phone or online, while others might require a written cancellation notice or signed form. Be firm if they try to persuade you to stay, especially if you’ve already found a better deal. Confirm the date and time you want the coverage to end (usually the start date of your new policy, to avoid any gap).

3. Finalize the Cancellation

Follow any final steps your insurer requires to complete the cancellation. You may need to sign a cancellation request form and send it back, or verify your identity for security. Once processed, ask for a cancellation confirmation in writing (email or letter) for your records. If you paid your premium in advance, request details about your refund – most major insurers will refund the unused portion of your premium after the cancellation date. Also ask if there’s any cancellation fee or penalty. (Fortunately, in most cases there is no fee for canceling a car insurance policy mid-term.) Keep an eye on your bank or credit card to ensure you’re not auto-billed after the end date.

More:

10 Smart Ways to Slash Your Car Insurance Costs (2025)

Put your cards to work.

Kudos is your ultimate financial companion, helping you effortlessly manage multiple credit cards, monitor your credit score, and maximize your rewards—all in one convenient platform.
Add to Chrome – It’s Free

When It Makes Sense to Cancel Your Car Insurance

Not sure if you should cancel your policy? Here are some situations when canceling your car insurance is appropriate – and tips to do it safely.

If You’ve Sold Your Car (and Aren’t Replacing It)

Maybe you’re moving to a city and relying on public transit, or you just decided to downsize to one vehicle. If you no longer own a car, canceling the insurance on that vehicle is reasonable. Just make sure the sale is fully complete before you cancel – the title transferred, bill of sale done, and (if your state requires) a Notice of Release of Liability filed with the DMV. Until those steps are done, you’re technically still the owner and need coverage in case of any mishaps. Important: if you sold one car but plan to buy a new car very soon, you might not need to cancel entirely – you can usually transfer or update your existing policy to cover the new vehicle instead of canceling. Only cancel outright when you truly won’t have a car for the foreseeable future.

If You’re Switching Insurance Companies

Switching to a new insurance provider for a better rate or service? That’s fine – just time it right. Buy your new auto policy first, then cancel the old one. This way, your old coverage stays active until the moment your new coverage kicks in. Seamlessly overlapping the dates means no gap in insurance, which is critical to avoid a lapse on your record. Driving uninsured, even for a day, is illegal in most places and financially risky. Plus, insurers can hike your premiums if they see you had a coverage lapse, even a short one. So, overlap your policies by a day if needed or have the new policy start the same day the old one ends. Once the new insurance is confirmed active, go ahead and cancel the previous policy. (Bonus: When you switch, you’ll likely get a refund of any prepaid premium from your old insurer for the unused days.)

If You’re Joining Someone Else’s Policy

Life changes like getting married or moving in with family can mean you’ll be covered under another driver’s insurance policy. For example, if you get married and add your car to your spouse’s auto policy, you won’t need your separate policy anymore. In this case, make sure you’ve been added to the new joint policy before canceling your own coverage. The new policy should list you as a named insured and cover your vehicle. Once that’s active, you can safely cancel your old policy. Joining a multi-vehicle or family policy often comes with discounts, so this move can save money. Just don’t cancel your solo policy until the new insurer’s proof of insurance is in hand – you want zero days uncovered in between.

(Other valid reasons to cancel can include no longer driving at all (for instance, you’ve retired from driving completely) or moving abroad. In those cases, follow the same principles: only cancel once you’re certain you won’t need the coverage, and turn in your license plates if required by your state.)

An icon of a lightbulb
Kudos Tip

Shopping for insurance? Kudos quickly compares top carriers and finds hidden perks—free and easy to use.

More:

Car Insurance 101: The Complete Beginner's Guide to Auto Insurance in 2025

When You Should Not Cancel Your Car Insurance

Think twice about canceling in the following situations – keeping your coverage (or finding an alternative) is usually the better move:

If You Still Drive – Even Occasionally

Do not cancel your car insurance if you plan to drive any vehicle at all. It’s illegal in nearly every state to drive without at least basic liability coverage, no matter how infrequently you drive. For example, maybe you’re now working from home and hardly use your car – it might be tempting to drop insurance to save money. But if you ever need to run an errand or take a road trip, you’d be driving uninsured, which could lead to hefty fines, license suspension, or even jail time for a worst-case scenario accident. Instead of canceling, look into alternatives like a usage-based insurance plan or a low-mileage discount that can lower your premium when you drive less. You could also adjust coverages (e.g. drop optional coverages or raise your deductible) to cut costs, rather than eliminating insurance entirely. The bottom line: as long as you might drive, you need some insurance.

If You’ll Need Insurance Again Soon

Maybe you’re temporarily between cars – say you sold your current car and plan to buy a new one in a month or two. In this case, canceling your policy outright can backfire. Going even a few weeks without auto insurance is considered a coverage lapse, and insurers view that as risky behavior. A lapse on your record can lead to significantly higher premiums when you do get insured again. In fact, an analysis found that a lapse of just 30 days could trigger around a 9% rate increase, and a 60-day lapse could spike rates by as much as 48%. To avoid this, you have options: you can switch to a non-owner car insurance policy (which is a cheap policy for people who don’t currently own a car but want to maintain continuous coverage). Or simply coordinate the dates so your old policy cancels the same day you activate a new policy for your next car. The key is not to leave a gap. If you know you’ll need insurance again soon, it’s usually better to suspend or scale back coverage rather than cancel completely.

If Your Vehicle Is Parked or In Storage

Planning to not use your car for an extended period (for example, a military deployment, a long vacation, or keeping a classic car in storage)? You might consider canceling to save money, but think twice. Even when a car isn’t being driven, things can happen – theft, vandalism, fire, floods, etc. If you cancel insurance, you’d have no coverage for those incidents. Plus, when you eventually return to driving, you’d face the higher rates due to a lapse. A smarter move is to keep comprehensive-only coverage on the stored vehicle (which covers non-driving perils like theft or storm damage) instead of full coverage, or ask your insurer about suspending the policy for a while. Many insurers can temporarily pause certain coverages or offer a “storage discount” if the car is not being driven for a stretch. By keeping some insurance (or officially suspending the policy), you protect the car and avoid resetting your insurance history. Canceling should be a last resort here – for short periods of non-use, it usually isn’t worth losing continuous coverage.

If Your Car Is Financed or Leased

If you still owe money on your car (through a loan or lease), canceling your insurance is not an option. Your finance or lease agreement requires you to maintain full coverage (both collision and comprehensive) on the vehicle until it’s paid off. If you cancel the insurance on a financed car, you’re violating your contract. The lender will likely be notified of the cancellation and can respond in a couple of unpleasant ways. They might purchase a very expensive force-placed insurance policy on your behalf and send you the bill, or they could even repossess the car for breach of contract. In short: do not cancel insurance on a car that’s still under a loan or lease – you could “lose” the car entirely. Wait until the vehicle is paid off (and even then, you must keep at least the state-required liability coverage if you drive it).

If the Car Is Still Registered in Your Name

Even if you aren’t personally driving a particular car, canceling insurance could be risky if the vehicle is still registered under your name. For example, say you’re selling a car and let someone test-drive it, or you loan a car to a friend for a while. If an accident happens and the car is still registered to you while uninsured, you could be held liable for damages or face penalties for the lapse. In many states, any registered vehicle must carry liability insurance by law, whether or not you’re the one using it. So, don’t drop coverage on a car until you’ve officially transferred the registration or plates and notified the DMV if required. Similarly, if you have an older car you rarely drive (like a classic show car), don’t fully cancel the policy – keep at least comprehensive coverage on it to protect against unforeseen damage in storage. It’s about protecting yourself as long as your name is tied to that vehicle.

More:

Car Insurance Rates Are Going Up – Here’s Why and What You Can Do

FAQ: Canceling Car Insurance

Can I cancel my car insurance at any time?

Yes. You have the right to cancel your auto insurance policy whenever you want, even mid-term. You don’t have to wait until your renewal date – insurers allow cancellation for any reason. Just be sure to line up other coverage if you’ll still need it, and check whether your insurer requires notice in writing or any cancellation fee. Canceling early shouldn’t negatively affect you as long as you avoid a coverage gap.

Will I get a refund if I cancel my car insurance?

Yes, in most cases you’ll receive a pro-rated refund of any unused premium after you cancel. If you paid for a 6-month policy and cancel with two months remaining, for example, the insurer will owe you a refund for those unused two months. Major insurance companies typically refund the unused days once the policy is terminated. Be aware that if an insurance company does charge a small cancellation fee or short-rate penalty, it might be deducted from your refund. Always ask your insurer about your refund amount and timing when you cancel – you may need to wait a couple of weeks for the refund to process.

Is there a cancellation fee or penalty for ending a car insurance policy early?

No, usually there is no penalty for canceling your car insurance before the term ends. The majority of big insurers do not charge any cancellation fees and will simply refund your remaining premium. However, policies can vary. A few companies or certain state regulations might impose a nominal fee (or use a “short-rate” calculation that gives you slightly less than a full pro-rated refund). It’s best to double-check your policy or ask your agent. In most cases, though, you can cancel free of charge. Just don’t forget to actually cancel – if you stop paying without notice, that’s not the same thing and could have consequences (see next question).

Can I just stop paying my car insurance instead of canceling it?

No – don’t ever just stop paying your insurance bill without officially canceling. If you halt payments, the insurer will eventually cancel your policy for non-payment, but this comes with downsides. For one, it will count as a lapse in coverage on your record (your policy didn’t end on good terms, it was cut off for non-payment). Future insurers will see that gap and it could make you look higher-risk, potentially raising your quotes. You also risk still being technically on the hook for the owed premium. Insurance companies can send the unpaid balance to collections, which could hurt your credit. It’s always better to cancel the proper way – contact your insurer to terminate the policy – rather than ghosting on payments. A clean cancellation ensures you won’t owe anything extra and keeps your insurance history in good shape.

Can I cancel my car insurance if my car is financed or leased?

No, you shouldn’t cancel insurance on a financed/leased car. If your vehicle is still under a loan or lease, your lender requires continuous coverage. Canceling your policy would violate the loan/lease agreement and the lender can respond by repossessing the car or buying expensive force-placed insurance to charge you. Always maintain the required full coverage (collision and comprehensive) on financed cars until they’re paid off. Once you own the car outright, you can choose to drop certain coverages, but you must still carry at least the minimum liability insurance to drive legally. In short, for financed and leased cars: keep the insurance active – it’s not optional.

Conclusion: Making the Right Call (and How Kudos Can Help)

Canceling your car insurance isn’t complicated – a quick call to your insurer and a bit of paperwork will do it. The real art is knowing when to cancel versus when to keep your coverage. If you have a solid reason (no car, new policy elsewhere, etc.) and you’ve lined up everything responsibly, go ahead and cancel with confidence. Just avoid knee-jerk cancellations to save a buck or two; the short-term saving could cost you more in the long run if an accident or higher premiums hit.

Remember, you have options beyond canceling if affordability is the issue: shop around, adjust your coverage, or look for discounts. In fact, this is where Kudos can be your savvy sidekick. Kudos is a free tool that helps you compare top insurance offers and even uncovers hidden perks and discounts – kind of like having a friendly financial advisor at your fingertips. Before you make any big insurance moves, it doesn’t hurt to explore your options. With the right strategy (and the right information), you can decide whether canceling your car insurance is the best move for you and step into that decision fully prepared. Safe driving, and good luck!

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Experience smarter spending with Kudos and unlock more from your credit cards. Earn $20.00 when you sign up for Kudos with "GET20" and make an eligible Kudos Boost purchase.

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Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

In this article

No items found.
Advertiser Disclosure
A blue checkmark icon
Fact Checked
A black x icon

Kudos has partnered with CardRatings and Red Ventures for our coverage of credit card products. Kudos, CardRatings, and Red Ventures may receive a commission from card issuers. Kudos may receive commission from card issuers. Some of the card offers that appear on Kudos are from advertisers and may impact how and where card products appear on the site. Kudos tries to include as many card companies and offers as we are aware of, including offers from issuers that don't pay us, but we may not cover all card companies or all available card offers. You don't have to use our links, but we're grateful when you do!

Got it
Special Offer:

How to Cancel Car Insurance — And Know When It’s the Right Move

Get tips to avoid penalties, lapses in coverage, and costly mistakes before you cancel.

July 1, 2025

Small Kudos square logoAn upside down carrot icon

Steps to Cancel Your Car Insurance

1. Prepare Before You Cancel

Before pulling the plug on your auto insurance, get a few things in order. If you’ll still be driving (now or in the future), line up a new policy first so you aren’t left uninsured. Nearly every state requires car insurance to drive legally, and having another policy in place prevents a lapse in coverage. Check your current policy for any cancellation requirements or fees, and note your policy number and renewal date. It’s also wise to review if you’ve paid ahead – you may be due a prorated refund once you cancel.

2. Contact Your Insurer to Cancel

The only way to officially cancel is to notify your insurance company. Call your insurer’s customer service or your local agent and say you want to cancel your car insurance policy. They’ll guide you through the process – some companies can cancel immediately over the phone or online, while others might require a written cancellation notice or signed form. Be firm if they try to persuade you to stay, especially if you’ve already found a better deal. Confirm the date and time you want the coverage to end (usually the start date of your new policy, to avoid any gap).

3. Finalize the Cancellation

Follow any final steps your insurer requires to complete the cancellation. You may need to sign a cancellation request form and send it back, or verify your identity for security. Once processed, ask for a cancellation confirmation in writing (email or letter) for your records. If you paid your premium in advance, request details about your refund – most major insurers will refund the unused portion of your premium after the cancellation date. Also ask if there’s any cancellation fee or penalty. (Fortunately, in most cases there is no fee for canceling a car insurance policy mid-term.) Keep an eye on your bank or credit card to ensure you’re not auto-billed after the end date.

More:

10 Smart Ways to Slash Your Car Insurance Costs (2025)

Put your cards to work.

Kudos is your ultimate financial companion, helping you effortlessly manage multiple credit cards, monitor your credit score, and maximize your rewards—all in one convenient platform.
Add to Chrome – It’s Free

When It Makes Sense to Cancel Your Car Insurance

Not sure if you should cancel your policy? Here are some situations when canceling your car insurance is appropriate – and tips to do it safely.

If You’ve Sold Your Car (and Aren’t Replacing It)

Maybe you’re moving to a city and relying on public transit, or you just decided to downsize to one vehicle. If you no longer own a car, canceling the insurance on that vehicle is reasonable. Just make sure the sale is fully complete before you cancel – the title transferred, bill of sale done, and (if your state requires) a Notice of Release of Liability filed with the DMV. Until those steps are done, you’re technically still the owner and need coverage in case of any mishaps. Important: if you sold one car but plan to buy a new car very soon, you might not need to cancel entirely – you can usually transfer or update your existing policy to cover the new vehicle instead of canceling. Only cancel outright when you truly won’t have a car for the foreseeable future.

If You’re Switching Insurance Companies

Switching to a new insurance provider for a better rate or service? That’s fine – just time it right. Buy your new auto policy first, then cancel the old one. This way, your old coverage stays active until the moment your new coverage kicks in. Seamlessly overlapping the dates means no gap in insurance, which is critical to avoid a lapse on your record. Driving uninsured, even for a day, is illegal in most places and financially risky. Plus, insurers can hike your premiums if they see you had a coverage lapse, even a short one. So, overlap your policies by a day if needed or have the new policy start the same day the old one ends. Once the new insurance is confirmed active, go ahead and cancel the previous policy. (Bonus: When you switch, you’ll likely get a refund of any prepaid premium from your old insurer for the unused days.)

If You’re Joining Someone Else’s Policy

Life changes like getting married or moving in with family can mean you’ll be covered under another driver’s insurance policy. For example, if you get married and add your car to your spouse’s auto policy, you won’t need your separate policy anymore. In this case, make sure you’ve been added to the new joint policy before canceling your own coverage. The new policy should list you as a named insured and cover your vehicle. Once that’s active, you can safely cancel your old policy. Joining a multi-vehicle or family policy often comes with discounts, so this move can save money. Just don’t cancel your solo policy until the new insurer’s proof of insurance is in hand – you want zero days uncovered in between.

(Other valid reasons to cancel can include no longer driving at all (for instance, you’ve retired from driving completely) or moving abroad. In those cases, follow the same principles: only cancel once you’re certain you won’t need the coverage, and turn in your license plates if required by your state.)

An icon of a lightbulb
Kudos Tip

Shopping for insurance? Kudos quickly compares top carriers and finds hidden perks—free and easy to use.

More:

Car Insurance 101: The Complete Beginner's Guide to Auto Insurance in 2025

When You Should Not Cancel Your Car Insurance

Think twice about canceling in the following situations – keeping your coverage (or finding an alternative) is usually the better move:

If You Still Drive – Even Occasionally

Do not cancel your car insurance if you plan to drive any vehicle at all. It’s illegal in nearly every state to drive without at least basic liability coverage, no matter how infrequently you drive. For example, maybe you’re now working from home and hardly use your car – it might be tempting to drop insurance to save money. But if you ever need to run an errand or take a road trip, you’d be driving uninsured, which could lead to hefty fines, license suspension, or even jail time for a worst-case scenario accident. Instead of canceling, look into alternatives like a usage-based insurance plan or a low-mileage discount that can lower your premium when you drive less. You could also adjust coverages (e.g. drop optional coverages or raise your deductible) to cut costs, rather than eliminating insurance entirely. The bottom line: as long as you might drive, you need some insurance.

If You’ll Need Insurance Again Soon

Maybe you’re temporarily between cars – say you sold your current car and plan to buy a new one in a month or two. In this case, canceling your policy outright can backfire. Going even a few weeks without auto insurance is considered a coverage lapse, and insurers view that as risky behavior. A lapse on your record can lead to significantly higher premiums when you do get insured again. In fact, an analysis found that a lapse of just 30 days could trigger around a 9% rate increase, and a 60-day lapse could spike rates by as much as 48%. To avoid this, you have options: you can switch to a non-owner car insurance policy (which is a cheap policy for people who don’t currently own a car but want to maintain continuous coverage). Or simply coordinate the dates so your old policy cancels the same day you activate a new policy for your next car. The key is not to leave a gap. If you know you’ll need insurance again soon, it’s usually better to suspend or scale back coverage rather than cancel completely.

If Your Vehicle Is Parked or In Storage

Planning to not use your car for an extended period (for example, a military deployment, a long vacation, or keeping a classic car in storage)? You might consider canceling to save money, but think twice. Even when a car isn’t being driven, things can happen – theft, vandalism, fire, floods, etc. If you cancel insurance, you’d have no coverage for those incidents. Plus, when you eventually return to driving, you’d face the higher rates due to a lapse. A smarter move is to keep comprehensive-only coverage on the stored vehicle (which covers non-driving perils like theft or storm damage) instead of full coverage, or ask your insurer about suspending the policy for a while. Many insurers can temporarily pause certain coverages or offer a “storage discount” if the car is not being driven for a stretch. By keeping some insurance (or officially suspending the policy), you protect the car and avoid resetting your insurance history. Canceling should be a last resort here – for short periods of non-use, it usually isn’t worth losing continuous coverage.

If Your Car Is Financed or Leased

If you still owe money on your car (through a loan or lease), canceling your insurance is not an option. Your finance or lease agreement requires you to maintain full coverage (both collision and comprehensive) on the vehicle until it’s paid off. If you cancel the insurance on a financed car, you’re violating your contract. The lender will likely be notified of the cancellation and can respond in a couple of unpleasant ways. They might purchase a very expensive force-placed insurance policy on your behalf and send you the bill, or they could even repossess the car for breach of contract. In short: do not cancel insurance on a car that’s still under a loan or lease – you could “lose” the car entirely. Wait until the vehicle is paid off (and even then, you must keep at least the state-required liability coverage if you drive it).

If the Car Is Still Registered in Your Name

Even if you aren’t personally driving a particular car, canceling insurance could be risky if the vehicle is still registered under your name. For example, say you’re selling a car and let someone test-drive it, or you loan a car to a friend for a while. If an accident happens and the car is still registered to you while uninsured, you could be held liable for damages or face penalties for the lapse. In many states, any registered vehicle must carry liability insurance by law, whether or not you’re the one using it. So, don’t drop coverage on a car until you’ve officially transferred the registration or plates and notified the DMV if required. Similarly, if you have an older car you rarely drive (like a classic show car), don’t fully cancel the policy – keep at least comprehensive coverage on it to protect against unforeseen damage in storage. It’s about protecting yourself as long as your name is tied to that vehicle.

More:

Car Insurance Rates Are Going Up – Here’s Why and What You Can Do

FAQ: Canceling Car Insurance

Can I cancel my car insurance at any time?

Yes. You have the right to cancel your auto insurance policy whenever you want, even mid-term. You don’t have to wait until your renewal date – insurers allow cancellation for any reason. Just be sure to line up other coverage if you’ll still need it, and check whether your insurer requires notice in writing or any cancellation fee. Canceling early shouldn’t negatively affect you as long as you avoid a coverage gap.

Will I get a refund if I cancel my car insurance?

Yes, in most cases you’ll receive a pro-rated refund of any unused premium after you cancel. If you paid for a 6-month policy and cancel with two months remaining, for example, the insurer will owe you a refund for those unused two months. Major insurance companies typically refund the unused days once the policy is terminated. Be aware that if an insurance company does charge a small cancellation fee or short-rate penalty, it might be deducted from your refund. Always ask your insurer about your refund amount and timing when you cancel – you may need to wait a couple of weeks for the refund to process.

Is there a cancellation fee or penalty for ending a car insurance policy early?

No, usually there is no penalty for canceling your car insurance before the term ends. The majority of big insurers do not charge any cancellation fees and will simply refund your remaining premium. However, policies can vary. A few companies or certain state regulations might impose a nominal fee (or use a “short-rate” calculation that gives you slightly less than a full pro-rated refund). It’s best to double-check your policy or ask your agent. In most cases, though, you can cancel free of charge. Just don’t forget to actually cancel – if you stop paying without notice, that’s not the same thing and could have consequences (see next question).

Can I just stop paying my car insurance instead of canceling it?

No – don’t ever just stop paying your insurance bill without officially canceling. If you halt payments, the insurer will eventually cancel your policy for non-payment, but this comes with downsides. For one, it will count as a lapse in coverage on your record (your policy didn’t end on good terms, it was cut off for non-payment). Future insurers will see that gap and it could make you look higher-risk, potentially raising your quotes. You also risk still being technically on the hook for the owed premium. Insurance companies can send the unpaid balance to collections, which could hurt your credit. It’s always better to cancel the proper way – contact your insurer to terminate the policy – rather than ghosting on payments. A clean cancellation ensures you won’t owe anything extra and keeps your insurance history in good shape.

Can I cancel my car insurance if my car is financed or leased?

No, you shouldn’t cancel insurance on a financed/leased car. If your vehicle is still under a loan or lease, your lender requires continuous coverage. Canceling your policy would violate the loan/lease agreement and the lender can respond by repossessing the car or buying expensive force-placed insurance to charge you. Always maintain the required full coverage (collision and comprehensive) on financed cars until they’re paid off. Once you own the car outright, you can choose to drop certain coverages, but you must still carry at least the minimum liability insurance to drive legally. In short, for financed and leased cars: keep the insurance active – it’s not optional.

Conclusion: Making the Right Call (and How Kudos Can Help)

Canceling your car insurance isn’t complicated – a quick call to your insurer and a bit of paperwork will do it. The real art is knowing when to cancel versus when to keep your coverage. If you have a solid reason (no car, new policy elsewhere, etc.) and you’ve lined up everything responsibly, go ahead and cancel with confidence. Just avoid knee-jerk cancellations to save a buck or two; the short-term saving could cost you more in the long run if an accident or higher premiums hit.

Remember, you have options beyond canceling if affordability is the issue: shop around, adjust your coverage, or look for discounts. In fact, this is where Kudos can be your savvy sidekick. Kudos is a free tool that helps you compare top insurance offers and even uncovers hidden perks and discounts – kind of like having a friendly financial advisor at your fingertips. Before you make any big insurance moves, it doesn’t hurt to explore your options. With the right strategy (and the right information), you can decide whether canceling your car insurance is the best move for you and step into that decision fully prepared. Safe driving, and good luck!

Our favorite card right now

Supercharge Your Credit Cards

Experience smarter spending with Kudos and unlock more from your credit cards. Earn $20.00 when you sign up for Kudos with "GET20" and make an eligible Kudos Boost purchase.

Get Started

Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

In this article

No items found.
Advertiser Disclosure
A blue checkmark icon
Fact Checked
A black x icon

Kudos has partnered with CardRatings and Red Ventures for our coverage of credit card products. Kudos, CardRatings, and Red Ventures may receive a commission from card issuers. Kudos may receive commission from card issuers. Some of the card offers that appear on Kudos are from advertisers and may impact how and where card products appear on the site. Kudos tries to include as many card companies and offers as we are aware of, including offers from issuers that don't pay us, but we may not cover all card companies or all available card offers. You don't have to use our links, but we're grateful when you do!

Got it
Special Offer:

How to Cancel Car Insurance — And Know When It’s the Right Move

Get tips to avoid penalties, lapses in coverage, and costly mistakes before you cancel.

July 1, 2025

Small Kudos square logoAn upside down carrot icon
Person inside a car on a field

Steps to Cancel Your Car Insurance

1. Prepare Before You Cancel

Before pulling the plug on your auto insurance, get a few things in order. If you’ll still be driving (now or in the future), line up a new policy first so you aren’t left uninsured. Nearly every state requires car insurance to drive legally, and having another policy in place prevents a lapse in coverage. Check your current policy for any cancellation requirements or fees, and note your policy number and renewal date. It’s also wise to review if you’ve paid ahead – you may be due a prorated refund once you cancel.

2. Contact Your Insurer to Cancel

The only way to officially cancel is to notify your insurance company. Call your insurer’s customer service or your local agent and say you want to cancel your car insurance policy. They’ll guide you through the process – some companies can cancel immediately over the phone or online, while others might require a written cancellation notice or signed form. Be firm if they try to persuade you to stay, especially if you’ve already found a better deal. Confirm the date and time you want the coverage to end (usually the start date of your new policy, to avoid any gap).

3. Finalize the Cancellation

Follow any final steps your insurer requires to complete the cancellation. You may need to sign a cancellation request form and send it back, or verify your identity for security. Once processed, ask for a cancellation confirmation in writing (email or letter) for your records. If you paid your premium in advance, request details about your refund – most major insurers will refund the unused portion of your premium after the cancellation date. Also ask if there’s any cancellation fee or penalty. (Fortunately, in most cases there is no fee for canceling a car insurance policy mid-term.) Keep an eye on your bank or credit card to ensure you’re not auto-billed after the end date.

More:

10 Smart Ways to Slash Your Car Insurance Costs (2025)

When It Makes Sense to Cancel Your Car Insurance

Not sure if you should cancel your policy? Here are some situations when canceling your car insurance is appropriate – and tips to do it safely.

If You’ve Sold Your Car (and Aren’t Replacing It)

Maybe you’re moving to a city and relying on public transit, or you just decided to downsize to one vehicle. If you no longer own a car, canceling the insurance on that vehicle is reasonable. Just make sure the sale is fully complete before you cancel – the title transferred, bill of sale done, and (if your state requires) a Notice of Release of Liability filed with the DMV. Until those steps are done, you’re technically still the owner and need coverage in case of any mishaps. Important: if you sold one car but plan to buy a new car very soon, you might not need to cancel entirely – you can usually transfer or update your existing policy to cover the new vehicle instead of canceling. Only cancel outright when you truly won’t have a car for the foreseeable future.

If You’re Switching Insurance Companies

Switching to a new insurance provider for a better rate or service? That’s fine – just time it right. Buy your new auto policy first, then cancel the old one. This way, your old coverage stays active until the moment your new coverage kicks in. Seamlessly overlapping the dates means no gap in insurance, which is critical to avoid a lapse on your record. Driving uninsured, even for a day, is illegal in most places and financially risky. Plus, insurers can hike your premiums if they see you had a coverage lapse, even a short one. So, overlap your policies by a day if needed or have the new policy start the same day the old one ends. Once the new insurance is confirmed active, go ahead and cancel the previous policy. (Bonus: When you switch, you’ll likely get a refund of any prepaid premium from your old insurer for the unused days.)

If You’re Joining Someone Else’s Policy

Life changes like getting married or moving in with family can mean you’ll be covered under another driver’s insurance policy. For example, if you get married and add your car to your spouse’s auto policy, you won’t need your separate policy anymore. In this case, make sure you’ve been added to the new joint policy before canceling your own coverage. The new policy should list you as a named insured and cover your vehicle. Once that’s active, you can safely cancel your old policy. Joining a multi-vehicle or family policy often comes with discounts, so this move can save money. Just don’t cancel your solo policy until the new insurer’s proof of insurance is in hand – you want zero days uncovered in between.

(Other valid reasons to cancel can include no longer driving at all (for instance, you’ve retired from driving completely) or moving abroad. In those cases, follow the same principles: only cancel once you’re certain you won’t need the coverage, and turn in your license plates if required by your state.)

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Kudos Tip

Shopping for insurance? Kudos quickly compares top carriers and finds hidden perks—free and easy to use.

More:

Car Insurance 101: The Complete Beginner's Guide to Auto Insurance in 2025

When You Should Not Cancel Your Car Insurance

Think twice about canceling in the following situations – keeping your coverage (or finding an alternative) is usually the better move:

If You Still Drive – Even Occasionally

Do not cancel your car insurance if you plan to drive any vehicle at all. It’s illegal in nearly every state to drive without at least basic liability coverage, no matter how infrequently you drive. For example, maybe you’re now working from home and hardly use your car – it might be tempting to drop insurance to save money. But if you ever need to run an errand or take a road trip, you’d be driving uninsured, which could lead to hefty fines, license suspension, or even jail time for a worst-case scenario accident. Instead of canceling, look into alternatives like a usage-based insurance plan or a low-mileage discount that can lower your premium when you drive less. You could also adjust coverages (e.g. drop optional coverages or raise your deductible) to cut costs, rather than eliminating insurance entirely. The bottom line: as long as you might drive, you need some insurance.

If You’ll Need Insurance Again Soon

Maybe you’re temporarily between cars – say you sold your current car and plan to buy a new one in a month or two. In this case, canceling your policy outright can backfire. Going even a few weeks without auto insurance is considered a coverage lapse, and insurers view that as risky behavior. A lapse on your record can lead to significantly higher premiums when you do get insured again. In fact, an analysis found that a lapse of just 30 days could trigger around a 9% rate increase, and a 60-day lapse could spike rates by as much as 48%. To avoid this, you have options: you can switch to a non-owner car insurance policy (which is a cheap policy for people who don’t currently own a car but want to maintain continuous coverage). Or simply coordinate the dates so your old policy cancels the same day you activate a new policy for your next car. The key is not to leave a gap. If you know you’ll need insurance again soon, it’s usually better to suspend or scale back coverage rather than cancel completely.

If Your Vehicle Is Parked or In Storage

Planning to not use your car for an extended period (for example, a military deployment, a long vacation, or keeping a classic car in storage)? You might consider canceling to save money, but think twice. Even when a car isn’t being driven, things can happen – theft, vandalism, fire, floods, etc. If you cancel insurance, you’d have no coverage for those incidents. Plus, when you eventually return to driving, you’d face the higher rates due to a lapse. A smarter move is to keep comprehensive-only coverage on the stored vehicle (which covers non-driving perils like theft or storm damage) instead of full coverage, or ask your insurer about suspending the policy for a while. Many insurers can temporarily pause certain coverages or offer a “storage discount” if the car is not being driven for a stretch. By keeping some insurance (or officially suspending the policy), you protect the car and avoid resetting your insurance history. Canceling should be a last resort here – for short periods of non-use, it usually isn’t worth losing continuous coverage.

If Your Car Is Financed or Leased

If you still owe money on your car (through a loan or lease), canceling your insurance is not an option. Your finance or lease agreement requires you to maintain full coverage (both collision and comprehensive) on the vehicle until it’s paid off. If you cancel the insurance on a financed car, you’re violating your contract. The lender will likely be notified of the cancellation and can respond in a couple of unpleasant ways. They might purchase a very expensive force-placed insurance policy on your behalf and send you the bill, or they could even repossess the car for breach of contract. In short: do not cancel insurance on a car that’s still under a loan or lease – you could “lose” the car entirely. Wait until the vehicle is paid off (and even then, you must keep at least the state-required liability coverage if you drive it).

If the Car Is Still Registered in Your Name

Even if you aren’t personally driving a particular car, canceling insurance could be risky if the vehicle is still registered under your name. For example, say you’re selling a car and let someone test-drive it, or you loan a car to a friend for a while. If an accident happens and the car is still registered to you while uninsured, you could be held liable for damages or face penalties for the lapse. In many states, any registered vehicle must carry liability insurance by law, whether or not you’re the one using it. So, don’t drop coverage on a car until you’ve officially transferred the registration or plates and notified the DMV if required. Similarly, if you have an older car you rarely drive (like a classic show car), don’t fully cancel the policy – keep at least comprehensive coverage on it to protect against unforeseen damage in storage. It’s about protecting yourself as long as your name is tied to that vehicle.

More:

Car Insurance Rates Are Going Up – Here’s Why and What You Can Do

FAQ: Canceling Car Insurance

Can I cancel my car insurance at any time?

Yes. You have the right to cancel your auto insurance policy whenever you want, even mid-term. You don’t have to wait until your renewal date – insurers allow cancellation for any reason. Just be sure to line up other coverage if you’ll still need it, and check whether your insurer requires notice in writing or any cancellation fee. Canceling early shouldn’t negatively affect you as long as you avoid a coverage gap.

Will I get a refund if I cancel my car insurance?

Yes, in most cases you’ll receive a pro-rated refund of any unused premium after you cancel. If you paid for a 6-month policy and cancel with two months remaining, for example, the insurer will owe you a refund for those unused two months. Major insurance companies typically refund the unused days once the policy is terminated. Be aware that if an insurance company does charge a small cancellation fee or short-rate penalty, it might be deducted from your refund. Always ask your insurer about your refund amount and timing when you cancel – you may need to wait a couple of weeks for the refund to process.

Is there a cancellation fee or penalty for ending a car insurance policy early?

No, usually there is no penalty for canceling your car insurance before the term ends. The majority of big insurers do not charge any cancellation fees and will simply refund your remaining premium. However, policies can vary. A few companies or certain state regulations might impose a nominal fee (or use a “short-rate” calculation that gives you slightly less than a full pro-rated refund). It’s best to double-check your policy or ask your agent. In most cases, though, you can cancel free of charge. Just don’t forget to actually cancel – if you stop paying without notice, that’s not the same thing and could have consequences (see next question).

Can I just stop paying my car insurance instead of canceling it?

No – don’t ever just stop paying your insurance bill without officially canceling. If you halt payments, the insurer will eventually cancel your policy for non-payment, but this comes with downsides. For one, it will count as a lapse in coverage on your record (your policy didn’t end on good terms, it was cut off for non-payment). Future insurers will see that gap and it could make you look higher-risk, potentially raising your quotes. You also risk still being technically on the hook for the owed premium. Insurance companies can send the unpaid balance to collections, which could hurt your credit. It’s always better to cancel the proper way – contact your insurer to terminate the policy – rather than ghosting on payments. A clean cancellation ensures you won’t owe anything extra and keeps your insurance history in good shape.

Can I cancel my car insurance if my car is financed or leased?

No, you shouldn’t cancel insurance on a financed/leased car. If your vehicle is still under a loan or lease, your lender requires continuous coverage. Canceling your policy would violate the loan/lease agreement and the lender can respond by repossessing the car or buying expensive force-placed insurance to charge you. Always maintain the required full coverage (collision and comprehensive) on financed cars until they’re paid off. Once you own the car outright, you can choose to drop certain coverages, but you must still carry at least the minimum liability insurance to drive legally. In short, for financed and leased cars: keep the insurance active – it’s not optional.

Conclusion: Making the Right Call (and How Kudos Can Help)

Canceling your car insurance isn’t complicated – a quick call to your insurer and a bit of paperwork will do it. The real art is knowing when to cancel versus when to keep your coverage. If you have a solid reason (no car, new policy elsewhere, etc.) and you’ve lined up everything responsibly, go ahead and cancel with confidence. Just avoid knee-jerk cancellations to save a buck or two; the short-term saving could cost you more in the long run if an accident or higher premiums hit.

Remember, you have options beyond canceling if affordability is the issue: shop around, adjust your coverage, or look for discounts. In fact, this is where Kudos can be your savvy sidekick. Kudos is a free tool that helps you compare top insurance offers and even uncovers hidden perks and discounts – kind of like having a friendly financial advisor at your fingertips. Before you make any big insurance moves, it doesn’t hurt to explore your options. With the right strategy (and the right information), you can decide whether canceling your car insurance is the best move for you and step into that decision fully prepared. Safe driving, and good luck!

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Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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How to Cancel Car Insurance — And Know When It’s the Right Move

Get tips to avoid penalties, lapses in coverage, and costly mistakes before you cancel.

July 1, 2025

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Steps to Cancel Your Car Insurance

1. Prepare Before You Cancel

Before pulling the plug on your auto insurance, get a few things in order. If you’ll still be driving (now or in the future), line up a new policy first so you aren’t left uninsured. Nearly every state requires car insurance to drive legally, and having another policy in place prevents a lapse in coverage. Check your current policy for any cancellation requirements or fees, and note your policy number and renewal date. It’s also wise to review if you’ve paid ahead – you may be due a prorated refund once you cancel.

2. Contact Your Insurer to Cancel

The only way to officially cancel is to notify your insurance company. Call your insurer’s customer service or your local agent and say you want to cancel your car insurance policy. They’ll guide you through the process – some companies can cancel immediately over the phone or online, while others might require a written cancellation notice or signed form. Be firm if they try to persuade you to stay, especially if you’ve already found a better deal. Confirm the date and time you want the coverage to end (usually the start date of your new policy, to avoid any gap).

3. Finalize the Cancellation

Follow any final steps your insurer requires to complete the cancellation. You may need to sign a cancellation request form and send it back, or verify your identity for security. Once processed, ask for a cancellation confirmation in writing (email or letter) for your records. If you paid your premium in advance, request details about your refund – most major insurers will refund the unused portion of your premium after the cancellation date. Also ask if there’s any cancellation fee or penalty. (Fortunately, in most cases there is no fee for canceling a car insurance policy mid-term.) Keep an eye on your bank or credit card to ensure you’re not auto-billed after the end date.

More:

10 Smart Ways to Slash Your Car Insurance Costs (2025)

When It Makes Sense to Cancel Your Car Insurance

Not sure if you should cancel your policy? Here are some situations when canceling your car insurance is appropriate – and tips to do it safely.

If You’ve Sold Your Car (and Aren’t Replacing It)

Maybe you’re moving to a city and relying on public transit, or you just decided to downsize to one vehicle. If you no longer own a car, canceling the insurance on that vehicle is reasonable. Just make sure the sale is fully complete before you cancel – the title transferred, bill of sale done, and (if your state requires) a Notice of Release of Liability filed with the DMV. Until those steps are done, you’re technically still the owner and need coverage in case of any mishaps. Important: if you sold one car but plan to buy a new car very soon, you might not need to cancel entirely – you can usually transfer or update your existing policy to cover the new vehicle instead of canceling. Only cancel outright when you truly won’t have a car for the foreseeable future.

If You’re Switching Insurance Companies

Switching to a new insurance provider for a better rate or service? That’s fine – just time it right. Buy your new auto policy first, then cancel the old one. This way, your old coverage stays active until the moment your new coverage kicks in. Seamlessly overlapping the dates means no gap in insurance, which is critical to avoid a lapse on your record. Driving uninsured, even for a day, is illegal in most places and financially risky. Plus, insurers can hike your premiums if they see you had a coverage lapse, even a short one. So, overlap your policies by a day if needed or have the new policy start the same day the old one ends. Once the new insurance is confirmed active, go ahead and cancel the previous policy. (Bonus: When you switch, you’ll likely get a refund of any prepaid premium from your old insurer for the unused days.)

If You’re Joining Someone Else’s Policy

Life changes like getting married or moving in with family can mean you’ll be covered under another driver’s insurance policy. For example, if you get married and add your car to your spouse’s auto policy, you won’t need your separate policy anymore. In this case, make sure you’ve been added to the new joint policy before canceling your own coverage. The new policy should list you as a named insured and cover your vehicle. Once that’s active, you can safely cancel your old policy. Joining a multi-vehicle or family policy often comes with discounts, so this move can save money. Just don’t cancel your solo policy until the new insurer’s proof of insurance is in hand – you want zero days uncovered in between.

(Other valid reasons to cancel can include no longer driving at all (for instance, you’ve retired from driving completely) or moving abroad. In those cases, follow the same principles: only cancel once you’re certain you won’t need the coverage, and turn in your license plates if required by your state.)

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Shopping for insurance? Kudos quickly compares top carriers and finds hidden perks—free and easy to use.

More:

Car Insurance 101: The Complete Beginner's Guide to Auto Insurance in 2025

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When You Should Not Cancel Your Car Insurance

Think twice about canceling in the following situations – keeping your coverage (or finding an alternative) is usually the better move:

If You Still Drive – Even Occasionally

Do not cancel your car insurance if you plan to drive any vehicle at all. It’s illegal in nearly every state to drive without at least basic liability coverage, no matter how infrequently you drive. For example, maybe you’re now working from home and hardly use your car – it might be tempting to drop insurance to save money. But if you ever need to run an errand or take a road trip, you’d be driving uninsured, which could lead to hefty fines, license suspension, or even jail time for a worst-case scenario accident. Instead of canceling, look into alternatives like a usage-based insurance plan or a low-mileage discount that can lower your premium when you drive less. You could also adjust coverages (e.g. drop optional coverages or raise your deductible) to cut costs, rather than eliminating insurance entirely. The bottom line: as long as you might drive, you need some insurance.

If You’ll Need Insurance Again Soon

Maybe you’re temporarily between cars – say you sold your current car and plan to buy a new one in a month or two. In this case, canceling your policy outright can backfire. Going even a few weeks without auto insurance is considered a coverage lapse, and insurers view that as risky behavior. A lapse on your record can lead to significantly higher premiums when you do get insured again. In fact, an analysis found that a lapse of just 30 days could trigger around a 9% rate increase, and a 60-day lapse could spike rates by as much as 48%. To avoid this, you have options: you can switch to a non-owner car insurance policy (which is a cheap policy for people who don’t currently own a car but want to maintain continuous coverage). Or simply coordinate the dates so your old policy cancels the same day you activate a new policy for your next car. The key is not to leave a gap. If you know you’ll need insurance again soon, it’s usually better to suspend or scale back coverage rather than cancel completely.

If Your Vehicle Is Parked or In Storage

Planning to not use your car for an extended period (for example, a military deployment, a long vacation, or keeping a classic car in storage)? You might consider canceling to save money, but think twice. Even when a car isn’t being driven, things can happen – theft, vandalism, fire, floods, etc. If you cancel insurance, you’d have no coverage for those incidents. Plus, when you eventually return to driving, you’d face the higher rates due to a lapse. A smarter move is to keep comprehensive-only coverage on the stored vehicle (which covers non-driving perils like theft or storm damage) instead of full coverage, or ask your insurer about suspending the policy for a while. Many insurers can temporarily pause certain coverages or offer a “storage discount” if the car is not being driven for a stretch. By keeping some insurance (or officially suspending the policy), you protect the car and avoid resetting your insurance history. Canceling should be a last resort here – for short periods of non-use, it usually isn’t worth losing continuous coverage.

If Your Car Is Financed or Leased

If you still owe money on your car (through a loan or lease), canceling your insurance is not an option. Your finance or lease agreement requires you to maintain full coverage (both collision and comprehensive) on the vehicle until it’s paid off. If you cancel the insurance on a financed car, you’re violating your contract. The lender will likely be notified of the cancellation and can respond in a couple of unpleasant ways. They might purchase a very expensive force-placed insurance policy on your behalf and send you the bill, or they could even repossess the car for breach of contract. In short: do not cancel insurance on a car that’s still under a loan or lease – you could “lose” the car entirely. Wait until the vehicle is paid off (and even then, you must keep at least the state-required liability coverage if you drive it).

If the Car Is Still Registered in Your Name

Even if you aren’t personally driving a particular car, canceling insurance could be risky if the vehicle is still registered under your name. For example, say you’re selling a car and let someone test-drive it, or you loan a car to a friend for a while. If an accident happens and the car is still registered to you while uninsured, you could be held liable for damages or face penalties for the lapse. In many states, any registered vehicle must carry liability insurance by law, whether or not you’re the one using it. So, don’t drop coverage on a car until you’ve officially transferred the registration or plates and notified the DMV if required. Similarly, if you have an older car you rarely drive (like a classic show car), don’t fully cancel the policy – keep at least comprehensive coverage on it to protect against unforeseen damage in storage. It’s about protecting yourself as long as your name is tied to that vehicle.

More:

Car Insurance Rates Are Going Up – Here’s Why and What You Can Do

FAQ: Canceling Car Insurance

Can I cancel my car insurance at any time?

Yes. You have the right to cancel your auto insurance policy whenever you want, even mid-term. You don’t have to wait until your renewal date – insurers allow cancellation for any reason. Just be sure to line up other coverage if you’ll still need it, and check whether your insurer requires notice in writing or any cancellation fee. Canceling early shouldn’t negatively affect you as long as you avoid a coverage gap.

Will I get a refund if I cancel my car insurance?

Yes, in most cases you’ll receive a pro-rated refund of any unused premium after you cancel. If you paid for a 6-month policy and cancel with two months remaining, for example, the insurer will owe you a refund for those unused two months. Major insurance companies typically refund the unused days once the policy is terminated. Be aware that if an insurance company does charge a small cancellation fee or short-rate penalty, it might be deducted from your refund. Always ask your insurer about your refund amount and timing when you cancel – you may need to wait a couple of weeks for the refund to process.

Is there a cancellation fee or penalty for ending a car insurance policy early?

No, usually there is no penalty for canceling your car insurance before the term ends. The majority of big insurers do not charge any cancellation fees and will simply refund your remaining premium. However, policies can vary. A few companies or certain state regulations might impose a nominal fee (or use a “short-rate” calculation that gives you slightly less than a full pro-rated refund). It’s best to double-check your policy or ask your agent. In most cases, though, you can cancel free of charge. Just don’t forget to actually cancel – if you stop paying without notice, that’s not the same thing and could have consequences (see next question).

Can I just stop paying my car insurance instead of canceling it?

No – don’t ever just stop paying your insurance bill without officially canceling. If you halt payments, the insurer will eventually cancel your policy for non-payment, but this comes with downsides. For one, it will count as a lapse in coverage on your record (your policy didn’t end on good terms, it was cut off for non-payment). Future insurers will see that gap and it could make you look higher-risk, potentially raising your quotes. You also risk still being technically on the hook for the owed premium. Insurance companies can send the unpaid balance to collections, which could hurt your credit. It’s always better to cancel the proper way – contact your insurer to terminate the policy – rather than ghosting on payments. A clean cancellation ensures you won’t owe anything extra and keeps your insurance history in good shape.

Can I cancel my car insurance if my car is financed or leased?

No, you shouldn’t cancel insurance on a financed/leased car. If your vehicle is still under a loan or lease, your lender requires continuous coverage. Canceling your policy would violate the loan/lease agreement and the lender can respond by repossessing the car or buying expensive force-placed insurance to charge you. Always maintain the required full coverage (collision and comprehensive) on financed cars until they’re paid off. Once you own the car outright, you can choose to drop certain coverages, but you must still carry at least the minimum liability insurance to drive legally. In short, for financed and leased cars: keep the insurance active – it’s not optional.

Conclusion: Making the Right Call (and How Kudos Can Help)

Canceling your car insurance isn’t complicated – a quick call to your insurer and a bit of paperwork will do it. The real art is knowing when to cancel versus when to keep your coverage. If you have a solid reason (no car, new policy elsewhere, etc.) and you’ve lined up everything responsibly, go ahead and cancel with confidence. Just avoid knee-jerk cancellations to save a buck or two; the short-term saving could cost you more in the long run if an accident or higher premiums hit.

Remember, you have options beyond canceling if affordability is the issue: shop around, adjust your coverage, or look for discounts. In fact, this is where Kudos can be your savvy sidekick. Kudos is a free tool that helps you compare top insurance offers and even uncovers hidden perks and discounts – kind of like having a friendly financial advisor at your fingertips. Before you make any big insurance moves, it doesn’t hurt to explore your options. With the right strategy (and the right information), you can decide whether canceling your car insurance is the best move for you and step into that decision fully prepared. Safe driving, and good luck!

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Supercharge Your Credit Cards

Experience smarter spending with Kudos and unlock more from your credit cards. Earn $20.00 when you sign up for Kudos with "GET20" and make an eligible Kudos Boost purchase.

Get Started

Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

In this article

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