Auto insurance holders may terminate their policies before the end of their insurance term. Most insurance companies offer a grace period of about 2 weeks after purchase for customers to cancel without penalty. However, you may need to cancel your insurance policy after the grace period is over. Depending on the terms of your policy, your insurance company may charge an insurance cancellation fee.
Cancellation charges vary according to how the insurance company calculates costs. Some insurance companies charge a flat cancellation fee which is to be paid upon cancellation. Others determine the cancellation fee by looking at how much time remains on the policy. In cases where cancellation charges are determined by time remaining, cancellation fees become lower as the policy gets closer to maturity.
The amount of auto insurance cancellation charged is also determined by the reason the policy is terminated. In some cases insurance companies may terminate your policy before the policy term ends. For example, if you have a poor driving record, excessive claims or too many accidents, your insurer may cancel your policy. In most cases where your insurance company decides to terminate the policy, a termination fee is not charged.
You may also incur Insurance cancellation charges if your insurance policy has an auto renewal feature and you fail to cancel the policy before it is automatically renewed. To avoid paying cancellation fees in such cases, you should inform your insurance company of your intentions to cancel your policy towards the end of your insurance term.
A common mistake most people make in the cancellation of policies with an auto renewal feature is failing to officially cancel the policy with insurance companies. They simply stop paying premiums so that the policy cancels. Though failing to pay your premiums does cause your insurance company to cancel your policy, you’ll be considered to have defaulted on your policy. This can negatively affect your credit. Thus, it’s important to cancel ahead of time by speaking with or writing to a representative.
In most cases when you decide you want to cancel an auto insurance policy, it’s best to examine your policy’s terms and conditions and consult your insurance agent for advice. Becoming well informed allows you to take advantage of factors such as discounts on cancellation fees. You can also stand up for yourself if you are overcharged for cancelling your policy.
Call Loftis & Wetzel at 855-360-0466 if you’d like some more information about Edmond Auto insurance policies, or are considering switching auto insurance carriers.