Writing an Auto Insurance Cancellation Letter (Free Samples)

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A person may cancel their auto insurance policy for a variety of reasons. People have gotten better prices with a competitor auto insurance company in some situations.

It’s possible that the policyholder has lost his or her ability to drive, or that he or she has moved to a major city and no longer needs a car. Regardless of the reason, canceling your vehicle insurance policy should be done with caution.

It could result in costly miscommunications between the vehicle insurance provider and the policyholder if not done appropriately. It is possible to avoid any unwanted expenses by doing things correctly.

Right Time To Cancel?

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 selecting when is the ideal time to terminate a vehicle insurance coverage, the policyholder should understand the cancellation portion of the contract. If the policy is terminated before the policy period ends, the vehicle insurance company may incur a cost, depending on the circumstances.

Contact Your Current Insurance Company

The present auto insurance provider should be notified after the decision to terminate a vehicle insurance coverage has been made. Companies have different cancellation rules, but in most circumstances, a phone call will not suffice.

Before the policy is canceled, some auto insurance companies provide an internal form that must be filled and returned. In such circumstances, the policyholder should write a cancellation letter for their auto insurance.

Reason For Cancellation

If the reason for the cancellation was due to bad service, this is an opportunity to explain what went wrong. If a person is canceling their vehicle insurance coverage for any reason that they do not want the company to know about, it is not necessary to disclose it in the cancellation letter.

A person’s policy number, as well as other contact information such as phone number and address, should be included. An email address is not required. Before the cancellation can take effect, some companies want to verify the identity of the person who wrote the letter.

seek a refund

There is no need to seek a refund if the auto coverage is cancelled near the end of the policy period. Some people pay the entire policy premium in advance of the policy going into force. If the insurance is canceled within the policy period, the policy holder will be entitled to a refund.

Any cancellation of an auto insurance coverage in several states must be reported to the state’s Department of Motor Vehicles (DMV). A person can ask their new insurance agent or call their state’s DMV directly to discover if this is required.

avoid gap in insurance coverage

If a person is canceling their auto insurance policy to switch to another provider, it is critical that they avoid a coverage gap. It’s great if the new auto insurance coverage begins at the same time that the old one ends.

There could be a gap in vehicle insurance coverage if there is a period of time between when the old policy ends and the new one begins. If a driver is involved in an accident while their auto insurance is lapsed, they are fully responsible for all damages and any legal difficulties that may arise.

If a person needs to cancel their auto insurance for whatever reason, it’s a simple process. If done correctly, the policyholder will be able to upgrade to preferred coverage, receive a well-deserved rebate, and have no gaps in coverage.

Sample 1 - Auto Insurance Cancellation Letter

[DATE]

[Name on Policy]
[Address of Policy Holder]
[City, State, Zip]

[XYZ Insurance Company]
[Address of Company]
[City, State, Zip]

ATT: Cancellations

RE: Auto Insurance Policy: [#755545]

Please accept this letter as a formal request to terminate the aforementioned auto insurance policy. Please halt all premium payment debits or charges. [DATE] is the effective date of the policy cancellation.

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, 

[Name of Policy Holder]

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.

My decision was based on the desire to obtain more extensive coverage at a reduced cost. Please send me a written confirmation of the cancellation as soon as possible for my records.

Sincerely,

[Name of policyholder]
[Address]

Sample 3 - 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 hate to notify you that I, [Name of policyholder] have opted to stop my auto insurance coverage effective immediately. My decision is based on the fact that my car has been declared totaled. Please send me a written confirmation of the cancellation as soon as possible for my records.

Sincerely,

[Name of policyholder]
[Address]

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