What happens if you cancel car insurance?

You may want to cancel your current car insurance policy for several reasons. For instance, you may want to switch your insurance provider, in which case you’ll be looking for insurance quotes. Or perhaps you’ve sold your vehicle and don’t need insurance coverage anymore.

Most car insurance policies state you can cancel your policy at any time. You just need to send a notice with the effective date of the cancellation. It’s a requirement to notify your previous insurance provider when you switch to a new insurance company. 

What do you need to know when cancelling your insurance policy?

It’s illegal to drive a vehicle without insurance in every province and/or territory in Canada. 

If you’re switching insurers, make sure you have a new insurance policy in place before you cancel the old one. So be sure to get all your insurance quotes in plenty of time to do that. Also, make sure that you inform your new insurance provider when your previous insurance policy will expire. If you have an outstanding car loan or lease, you must also notify your lender that you’ve changed insurance companies.

If, for instance, you’re canceling your insurance policy because you’re moving to a new province, it’s essential to note that you’ll need to show proof of insurance when you register your vehicle there. Different provinces have different rules and regulations concerning the types and amounts of insurance coverage you’re supposed to carry. 

If you cancel your car insurance policy mid-term, you may be subject to additional premium and/or fees. 

How to cancel your auto insurance policy

Be sure to check with your insurer for their rules on cancelling your policy. There may be several ways to cancel, including:

• Call your insurance representative. Most major insurance companies require that policyholders speak with their insurance representative about cancelling an insurance policy. You can find your insurance representative’s phone number on your insurance card. This is perhaps the quickest way to cancel your car insurance, although you may have to sign a cancellation notice or other documents to make your cancellation official.
• Fax or mail your cancellation. You may also have the option to fax or mail your cancellation letter directly to your insurance company or insurance representative. 
• Visit the office. If your insurance representative has a physical location nearby, you may be able to make an appointment to visit their office and handle the documentation in person.

Final thoughts

While there are many reasons to cancel an insurance policy, it’s imperative to cancel your policy properly. 

If you wish to cancel your car insurance for whatever reason, make sure you inform your previous insurance provider when you do.