Writing an Auto Insurance Cancellation Letter

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Auto Insurance Cancellation Letter

There are many different reasons for a person to cancel their auto insurance policy. In some cases people have gotten better rates with a competing auto insurance provider. There may be a situation where the policyholder is no longer able to drive a vehicle or has moved to a big city and no longer has any need for a car.

Avoid Unnecessary Charges

No matter what the reason, cancelling an auto insurance policy is something that should be handled properly. If not done correctly, it could lead to costly miscommunications between the auto insurance company and the policyholder. Doing it right is a way to avoid any unnecessary charges.
Deciding when the time is right to cancel an auto insurance policy will depend on a number of factors. Most policies have a section that permits the holder to stop insurance coverage at any time. Before deciding the best time to cancel an auto insurance policy, the holder should know the specifics of the policy’s cancellation section. Depending on the conditions, the auto insurance company may charge a fee if the policy is canceled prior to completion of the policy period.

Phone Call Won't Meet All Requirements

Once the decision has been made to cancel an auto insurance policy, the current auto insurance company should be contacted. The cancellations policies of companies vary, but in most cases a phone call won’t meet all the requirements. Some auto insurance companies provide an internal form that must be completed and returned before the policy is canceled. In all cases, the policyholder should draft an auto insurance cancellation letter.

Give Reason For Cancellation

If the reason for cancellation is poor service, this is an opportunity to provide the details of what happened. If a person is canceling their auto insurance policy for any reason they don’t want the company to know, it does not need to be mentioned in the cancellation letter.

Include Policy Number

It’s also important for a person to include their policy number as well as other contact information such as phone number and address. An Email address is optional. There are companies who want to confirm the identity of the person who wrote the letter before the cancellation can take effect.

Seek A Refund

If the auto policy cancellation occurs at the end of the policy period, there will be no need to seek a refund. Some people do pay the entire policy prior premium prior to it taking effect. In this case, if the policy is canceled during the policy period, a refund will be due to the policyholder. 

Report To DMV

There are certain states where any cancellation of an auto insurance policy must be reported to their Department of Motor Vehicles (DMV). In order to see if this must be done, a person can ask their new insurance agent or contact their state’s DMV directly.

Avoid Gap In Coverage

If a person is canceling their auto insurance policy because of going to another company, it’s important they try to avoid experiencing a gap in their auto insurance coverage. It’s best to make certain the new auto insurance policy starts at the exact time the old one stops. If there is a period of time between when the old policy stops and the new one begins, it could create a gap in auto insurance coverage. If a driver experiences an accident during a gap in auto insurance coverage, they will be solely responsible for all damages and any legal issues that could occur as a result.
If a person feels the need to cancel their auto insurance for any reason, it’s something that can be easily accomplished. If done correctly, it will enable the policyholder to move on to preferred coverage, obtain a deserved refund and experience no gaps in coverage.

Sample 1 - Auto Insurance Cancellation Letter

Date

Name of Insurance
Cancellation Department
Address

Re: Policy Number

To Whom It May Concern:

This letter is to inform you I wish to have my auto insurance policy referenced above cancelled effective (cancellation date). Please send a written confirmation letter to me within 30 days after the cancellation takes effect. Please refund any and all unused portion of my premium.

I look forward to hearing from you.

Sincerely,

Policy holder’s name
Address

Sample 2 - Auto Insurance Cancellation Letter

Today’s Date

Attn: Cancellations Department
Insurance Company Name
Insurance Company Address  

Re: Cancellation of Auto Insurance Policy #:

To Whom It May Concern:

I regret to inform you that I, [Name of policyholder along with  auto insurance policy #] have decided to terminate my auto insurance coverage effective immediately. The reason for my decision is based on finding a more comprehensive coverage for a lower cost. Please, send me a written confirmation of the cancellation for my records at your earliest convenience.

Sincerely,

Name of policyholder
Address

Sample 3 - Auto Insurance Cancellation Letter

Today’s Date

Name on Policy
Address of Policyholder

ABC Insurance Company
Address of Company

ATT: Cancellations

RE: Auto Insurance Policy #

Please consider this letter as a formal request to cancel the referenced auto insurance policy. Please stop all debits or charges for premium payments. The effective date of policy cancellation is [cancellation date].
I am also requesting written confirmation of the cancellation and the return of any premiums. The cash value of the policy should also be sent with any returned premium. This action needs to occur within a period of 30 days from the receipt of this letter.

Sincerely,
Name of Policyholder