The Best Way To Switch Auto Insurance Companies
A person may choose to terminate their auto insurance policy for any number of reasons;
maybe theyre getting rid of their car altogether, or moving to another state. Perhaps theyre just dissatisfied with their existing companys service. However, if they dont give their insurer sufficient notice, it could end up costing them money, or negatively affecting their credit history.For most insurance companies, standard practice is to allow a person to cancel their policy at any time during the policy term by sending written notice stating the date of cancellation. A car insurance policy does not necessarily terminate at the end of each policy term, so it isn't safe to assume that one can just cancel by failing to pay their next bill. If no notice of cancellation is sent, the insurance company will automatically bill a customer in advance for the next terms premium payment. If not paid, they'll cancel the policyandit will go on the persons credit report.
Officially terminating a policy prevents future issues
Don't expect this information to be made explicit in the policy; while insurers are quick to inform customers when their coverage will terminate at the end of the policy period if a person fails to pay their next premium, they don't always inform them of the repercussions they may face for not giving formal notice of their policy termination.
Another thing to keep in mind is that allowing a car insurance policy to be canceled for non-payment may hurt the chances of obtaining auto coverage in the future. A person having a cancellation in their insurance history may cause other companies to label them as a high-risk applicant, thus giving them an excuse to charge a higher premium. However, individuals can usually avoid this trap by officially terminating their policy in a timely manner.
The procedure for properly cancelling a policy
Call the insurer and give them an effective date for cancellation of the policy. They will then send out a cancellation request form by mail (or email) - review this form carefully before signing and return it to the insurer.
If switching to another insurer, and planning to continue to drive throughout the process make sure that there is no lapse in the car insurance coverage. Therefore, be sure to coordinate the effective starting date of the new policy with the termination date of the old policy. The worst thing that could happen is to have an accident during an uninsured interim. As long as a person is considerate about giving their insurance company plenty of notice when they want to cancel their auto policy, and then go through the official termination process, they should avoid any negative repercussions.
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