Canceling Your Policy

Standard practice for most insurance companies is to allow you to cancel your policy at any given time during the policy term - and most insurance companies request that you send a written notice stating the date of your cancellation request.
 

You might choose to cancel your insurance policy for any reason.
 
   Maybe you were a little short on cash and put off your
    payment until your next paycheck,
 
   You're switching companies,
 
   Turned in your plates to DMV and getting rid of your car,
 
   or maybe you're just dissatisfied with your existing
    insurance company (hopefully that's not the case).
   
Whatever your reason may be, keep in mind that your policy does not necessarily cancel at the end of each policy term. So if you just happen to turn in your plates - it doesn't mean that your carrier will know that you will not be needing your coverage. Therefore, it isn't safe to assume that you can just cancel your insurance by failing to send in your payment when the bill comes.


In order to avoid the many problems that sometimes come with surrendering your plates, there are a few steps you can take:
 
   Provide proof:
 
    Be sure to provide your broker/agent/carrier proof that
    your license plates have been surrendered to DMV.
    Upon surrendering you license plates to DMV, you will be
    provided with a receipt (called an FS-6) from the DMV
    which must then be provided to your broker/agent/carrier
    in order for the cancellation to reflect the date after the
    plates were surrendered. 

   Avoid any charges/penalties:
 
    Depending when the receipt (FS-6) is provided to your
    broker/agent/carrier, there is a procedure and a grace
    period in order to cancel a policy avoiding penalties.
    There may be a grace period of thirty (30) days,
    however we recommend that you consult your
    broker/agent or carrier.

As long as you are considerate about giving your insurance company plenty of notice when you want to cancel your policy and go through their termination process, you should be able to avoid any negative repercussions.
 

   Short Rate Cancellation:
 
    "SHORT RATE” simply means that your auto insurance
    company will retain a portion of the policy premium due
    to your request for cancellation before the policy period
    and may result in a 10% penalty fee (may vary by
    company).

   Pro Rata Cancellation:
 
    If your policy is canceled by your auto insurance
    company upon your request for reasons beyond your
    control such as, the insured deceased, theft of your
    vehicle and a total loss of the vehicle from an accident,
    your policy would be canceled "PRO-RATA".

Canceling your policy “PRO-RATA” excludes you from a penalty fee for the cancellation of the policy before the policy period. Coverage for the vehicle would be calculated to the cost of insuring your vehicle daily and you would only pay for the coverage provided by your insurance company up until the day the policy is canceled.
 

   Consequences of Late Payments (considered "Pro Rata") 
 
    Cancellation of your insurance policy simply because you
    were a little short on cash and put off your payment until
    your next paycheck could really end up costing you a
    whole lot more.
 
 
    Depending on the length you have maintained insurance
    coverage on your vehicle(s) and kept a clean driving
    record, many companies will reward you with a Careful
    Driver Credit (CDC) discount.

 
   One Year Continuous Coverage (no lapses):
 
    One year continuous coverage & a clean driving record
    can award you an 18% Careful Driver Credit (DCD).

   Two Years Continuous Coverage (no lapses):
 
    Two years continuous coverage & a clean driving record
    can award you a 25% Careful Driver Credit (DCD).

   Three Years Continuous Coverage (no lapses):
 
    Three years continuous coverage & a clean driving record
    can award you a 30% Careful Driver Credit (DCD).