Is there a fee to cancel auto insurance?
You can always cancel your car insurance at your renewal period, but your auto insurance company may have a fee to cancel auto insurance early. Fees to cancel car insurance can range between $25-$50, but you may have hidden fees that aren't disclosed until you officially cancel. There is a fee to cancel GEICO car insurance, among others, so it's safest to wait until your renewal period. In the meantime, start shopping around for free auto insurance quotes online. Enter your ZIP code below to get started.
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Tracey L. Wells
Licensed Insurance Agent & Agency Owner
Tracey L. Wells is a licensed insurance agent and Farmers insurance agency owner with 23 years of experience. He is proud to be a local Farmers agent serving Grayson, Georgia and surrounding areas. With experience as both an underwriter and agent, he provides his customers with insight that others agents may not have. His agency offers all lines of insurance including home, life, auto, RV, busi...
Licensed Insurance Agent & Agency Owner
UPDATED: Jan 1, 2024
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Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Jan 1, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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There are a number of reasons why you might want to cancel your car insurance. Some people are switching to a new insurance provider. Others are getting rid of a vehicle altogether. Some are just tired of paying the insurance premiums or dealing with a disreputable carrier. When you cancel car insurance, however, you may have to pay a fee.
Do you have to pay a fee to cancel car insurance? What kinds of fees will your insurance company charge to cancel car insurance? Today, we’re explaining everything you need to know about canceling car insurance.
Some Insurers Charge a Fee, While Others Do Not
Most insurance companies make it easy to cancel car insurance. Depending on your state and your insurance company, however, you may have to pay a fee.
Fees vary widely between insurance companies.
Some insurers charge no fee whatsoever, allowing you to cancel car insurance without penalty in minutes online. Other insurance companies charge fees to cancel your policy. Some charge a flat rate fee of $25 to $50. Others charge a fee based on a percentage of your policy – like 10% of your remaining premium.
Today, most of America’s largest car insurance companies no longer charge cancelation fees.
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How Cancelation Fees Work
There are a few different types of cancelation fees in the car insurance world today, including all of the following policies:
- Flat rate fees of $25 to $50, regardless of when you cancel your insurance contract or how many months are remaining on your policy
- Hidden fees that aren’t transparently disclosed until you actually cancel your policy, although typically these are small fees of under $50
- No fee whatsoever, regardless of when you are canceling your policy
- A fee of 10% of your remaining insurance premium
- A flat rate cancelation fee only if you owe more than a certain amount on your car insurance – say, $300 or more
Which Insurance Companies Charge Cancelation Fees?
Auto insurance cancelation policies vary widely across the industry. Depending on your state and your insurance company, you could pay hefty cancelation fees or no fees whatsoever. Some of the major insurance companies and their cancelation policies include:
Many of America’s biggest car insurance companies, including Allstate, Geico, Liberty Mutual, Nationwide, State Farm, The Hartford, Travelers, and USAA, do not charge a cancelation fee, although you may have to pay pro-rated premiums over the next 30 days until your policy is officially canceled.
21st Century Insuranceand Esurance charge a $50 flat rate fee to cancel car insurance in most states
Mercury’s cancelation fee is 10% of your remaining premium, plus an additional $30 penalty if you still owe $300 or more on your policy
GMAC has a cancelation fee of $0 to $50, depending on your state.
Read more:
- What do I need to do to cancel my auto insurance policy with Travelers?
- How To Cancel USAA Auto Insurance in 5 Steps
- What is the process for canceling my auto insurance policy with AARP?
- What do I need to do to cancel my auto insurance policy with Allstate?
- What do I need to do to cancel my auto insurance policy with Esurance?
- What is the process for canceling my auto insurance policy with Mercury Insurance?
- What is the process for canceling my auto insurance policy with State Farm?
- What is the process for canceling my auto insurance policy with Nationwide?
Most Insurance Companies Want at Least 30 Days Notice
Most of America’s largest car insurance companies do not charge insurance cancelation fees. However, there’s a small catch: most insurance companies also want at least 30 days notice before officially canceling your policy.
Let’s say you’re in the third month of a six-month insurance contract with Geico. You want to cancel your car insurance policy because you found a new provider. Geico may cancel your policy without penalty, although you will need to pay pro-rated car insurance premiums for the next 30 days until your policy is officially canceled.
If you have paid for your car insurance upfront, or if the insurance company does not have a 30 day waiting period, then your insurance company might actually give the money back to you. You might receive a refund on any premiums paid after you no longer needed coverage.
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Other Things to Know When Canceling Car Insurance
- Don’t cancel your current car insurance until you have a new policy picked out; you don’t want your insurance coverage to lapse. Most car insurance companies allow you to choose the date your new policy goes into effect.
- Once you cancel your current auto insurance policy, it may expire immediately. Or, you may have to wait 30 days. Make sure you’re not doubly insured, paying for two insurance policies at the same time while you wait for your current policy to get canceled.
- Don’t forget to get your money back. Most car insurance companies will refund any money pre-paid towards your car insurance premiums, although some car insurance companies might ‘forget’ to send the money to you.
Read More: Do I have to turn in my license plates when I cancel auto insurance?
Conclusion
Ultimately, most of America’s largest car insurance providers have no cancelation fees, making it easy to switch to a new provider if you find a cheaper rate.
However, some insurance companies continue to charge cancelation fees. And, most insurance companies will require at least 30 days notice. You may have to continue paying for your current car insurance policy for the next 30 days even after you cancel your policy. Insurers will pro-rate this amount over a 30 day period.
Overall, it’s easy to cancel car insurance. Depending on your state and your insurance company, you may not even pay an auto insurance cancelation fee.
Frequently Asked Questions
Is there a fee to cancel auto insurance?
Yes, in many cases, there may be a fee associated with canceling your auto insurance policy. However, the specific fees and policies vary among insurance companies. It is important to review the terms and conditions of your policy or contact your insurance provider directly to understand the cancellation fees that apply in your situation.
Why do insurance companies charge cancellation fees?
Insurance companies charge cancellation fees to cover administrative costs associated with processing the cancellation of a policy. These costs may include paperwork, system updates, and other administrative tasks that need to be performed when a policy is canceled.
How much is the typical cancellation fee for auto insurance?
The amount of the cancellation fee can vary significantly depending on the insurance provider and the terms of your policy. Some insurance companies may charge a flat fee, while others may calculate the fee based on a percentage of the remaining premium or a predetermined amount. It is essential to check your policy documents or contact your insurance company to determine the exact amount of the cancellation fee applicable to your specific situation.
When are cancellation fees typically charged?
Cancellation fees are typically charged when you decide to cancel your auto insurance policy before its expiration date. The fees may apply if you choose to cancel mid-term or at the end of your policy term. It is advisable to review your policy documents or contact your insurance provider to understand the specific circumstances under which cancellation fees are charged.
Are there any situations where cancellation fees are waived?
While cancellation fees are common, some insurance companies may waive the fee under certain circumstances. For example, if you are canceling your policy within a specified grace period (usually a few days) of initially purchasing it, some insurers may not impose a cancellation fee. Additionally, if you are canceling due to specific qualifying reasons, such as selling your vehicle or moving out of the coverage area, some insurance companies may be more lenient regarding cancellation fees. It is best to consult your insurance provider to determine if any exceptions apply in your case.
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Tracey L. Wells
Licensed Insurance Agent & Agency Owner
Tracey L. Wells is a licensed insurance agent and Farmers insurance agency owner with 23 years of experience. He is proud to be a local Farmers agent serving Grayson, Georgia and surrounding areas. With experience as both an underwriter and agent, he provides his customers with insight that others agents may not have. His agency offers all lines of insurance including home, life, auto, RV, busi...
Licensed Insurance Agent & Agency Owner
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.