At the time of selling a car you don’t have to pay for the auto insurance on that car after the transaction has gone through and the title is transferred. If you are purchasing a new or different car then make sure to insure that vehicle from the onset. At the time of selling a car you need time to for the cancellation of the insurance policy or the insurance transfer so that you are never driving an uninsured. Always remember that auto insurance cancellation is an easy process which doesn’t have any penalty on your credit score.
Contact to your insurance company
The first thing you must do is to contact to your insurance company. The most effective way is to do is by calling them. Tell them your plans and the exact date on which you would like to cancellation of the insurance policy. For the proper cancellation of your insurance policy you have to send the insurance cancellation form. The letter contains the detail of the cancellation order. Make sure to read the terms and condition of the cancellation letter after that sign the letter and return it to your insurance company.
Align your dates
If you are selling your car then there is chance that you are buying another car. If there is no lapse in the coverage then align the date for the cancellation with the date of the purchase so that you are always insured. Remember that to inform your insurance company for the exchange of the vehicle. So if you are cancelling the one policy and begin another policy make sure that your dates are matching up.
When to cancel
There is no set amount of time that you give to your insurance company. Always provide the at least the one week of notice to your insurance company so that your request has the time to processed. At the time of selling a car you don’t have an idea when your transaction is going to be complete so don’t forget to set the date of the cancellation to the day after.
What not to do
The one thing you should not to do at the time of selling your car is letting your insurance company cancel the insurance policy as a result of you not paying. If you decided not to pay your monthly installments for the month in which you sell your car then it will not even expose you to the period of being uninsured buy it could have the negative effects on your credit score. The best way is to inform your insurance company or give the formal notice about the cancelling of your insurance policy. In case you paid your premium in full or make the payments then you are entitled to a refund after some necessary steps. Cancelling your insurance policy is very important at the time of selling your car. Follow the right procedure you will insure in which you are covered up until the time of transfer of the ownership is complete and you will get the partial premium refund. From this there will be no negative effect on your credit score. Make sure to give your insurance company at least the five business days to allow them to cancel your insurance policy.
Owing money on the cancelled insurance policy is a very common situation which people feel by their insurance company. You need to know how to avoid the unexpected bills on your cancelled insurance policy which may damage your insurance score. Here are some common insurance mistakes which may leads you to the higher car insurance rates.
- Make sure that your state knows you are no longer the owner of the car
When you sell your car then you allow the new buyer to drive your car with your license plate that you sold. If you are still the registered owner of the car then you are liable for its use. There is a proper procedure to change the registered ownership and the legal responsibility of the car which is varying by the state. The owner of the car has to fill the form in order to change the registration of the car in to the new owner name. Don’t ever trust the new owner to change the registration of the car which you sold. Before selling your car make sure that your state knows that you are no longer the owner of the car and you will not hold any responsibility for the use of the car which you sold.
- Avoid the problems and the costly mistakes when cancelling the insurance on the car which your sold
Cancelling the insurance policy at the time of selling the car is straight forward for the insurance company to handle it for you. The most important thing to do when you are selling your car is to get the bill of the sale which will identify that the car is sold, about the new owner, the seller and the date of sold. If you are having this document then you can able to cancel the insurance policy after the sale. When your car insurance company is having the copy of the bill of sale which proves the date of sale then your insurance company has to cancel the policy after the sale. If you are paying for the auto insurance coverage after the sale date then you will get your money back.
Many insurance companies allow you to give the written and signed cancellation request by the fax, mail or by sending your agent. Whereas some insurance companies allows the cancellation request by the phone. The procedure for cancellation of the insurance policy is different from company to company. If you are having any query asks your insurance agent how to cancel your car insurance policy. Make sure to keep the copy of the cancellation request and the bill of the sale. Always keep the notes of what was mailed when and to which office the confirmation replies received.
If you mail directly to your insurance company to cancel the insurance policy or if you are not having the local agent then allow 10 business days to your insurance company from the date of mailing. So that your insurance company gets the enough time to process your mailed cancel request. If you mail to your local agent about the cancellation of the policy then allow them 2-3 business day after the mail delivered. You can also call them to make sure that they get the mail or not.
After mailing to your insurance agent or company if you don’t get any mail or any written confirmation then make a phone call and ask them when you will get the confirmation about the cancellation and don’t forget to ask about the premium if it is being refunded or not. Still if you don’t receive the confirmation and you make a call second time then talk to the supervisor and they will advise you to file the complaint to your state insurance department. If your insurance companies get the mail and they signed your cancel request then your insurance company will cancel your insurance policy in a reasonable time.
Every time when you are speaking to your insurance company or the agent note the name of the person to whom you spoke, what was spoke as well as the date and time of the call. Many times the cancel request of the customers is handled without any problem. But sometimes the problem happens. Make sure they receive the mail regarding the cancel request so that they cancel it on the right date and bill you or refund you properly.
Some insurance companies may charge the cancellation fees if the customer request them to cancel the insurance policy before it renews. If your vehicle is sold then the fees will not apply.
Reasons to cancel the auto insurance policy
There are many reasons to cancel the current car insurance policy. For example:
- If you are getting rid of your car
- If your vehicle is being restored
- If you are planning to donate your car
- If you are no longer satisfied with your current provider
- Having the major life changes such as the marriage or death of the person in your policy.
Consequences of letting your car insurance lapse
All states required to show the proof of your financial responsibility when you get in an accident. Car insurance is the best way to fulfill your requirement. If you are cancelling your insurance policy without putting the new car insurance policy in place then surely you can face:
- The fines and penalties for driving uninsured
- You are liable for all the personal injury and the property damage incurred in the accident for which you are legally responsible.
- Higher premium in the future when you are going to sign the new policy
- If your insurance lapsed on your record then you are seen as a high risk driver and will face the higher insurance rates.
Always take the proper steps to cancel your policy and make sure you can get your new policy with no negative effects.
How to cancel car insurance effectively
- Let your company know when you want to end your policy- don’t cancel your policy without informing to your insurance company. If you inform to your insurance company then there might be an opportunity for you to get a discount. In case if you don’t inform them your insurance company will continue to send the letters or bills. For the non-payment they will report that to your credit agencies and after that surely you will face the higher insurance rates.
- Follow their lead- the insurance companies are handling the cancellation request differently. Some may ask you to sign the company document and formally indicating the desire to stop the coverage. Whereas the other companies want you to write the letter which will stating your intent and talk to the agent. An insurance company has established the ways to deal with this matter.
- Ask for the refund if you have the weeks or months left on your policy- if you are canceling your policy for the unexpected reason such as the death in the family. If you already paid for the full year and there is time left in your policy then you are entitled for the refund.
- Contact your lienholder- if you are still making the payments for your car then you are usually maintain the certain coverage such as the comprehensive coverage or the collision coverage. Make sure that your lienholder knows that you are changing the auto insurance policy.
- Cancel automatic payments- if you are using the electric fund transfer then make sure to stop those payments.