If you own a vehicle, operate a vehicle that you don’t own, or required to carry the Sr-22, then auto insurance is mandatory. But for one reason or another, people cancel their auto insurance without considering the consequences. This post will go through what to consider before canceling auto insurance.
No Longer Own Vehicle
In some cases people lose access to their vehicle, they may barely drive, or it may be non-operational. This scenario may prompt them to cancel their auto insurance policy, but that could be a mistake.
If you plan on driving the insured vehicle in the near future, keeping the policy can save you a lot of time and money. When you cancel a policy, the next policy you take may not be the same rate.
If you plan on canceling auto insurance, you should make it a point to get it confirmed. Some people will purposely miss a payment to get their insurance canceled, however, this has more negative consequences than positive.
First, many companies will charge you through a grace-period after you have missed a payment, so you end up paying anyway. Second, the next insurance company you use will see the lapse in coverage and missed a payment, which will alter your rates.
Out With The Old, In With The New
Another common mistake people make when canceling an old policy is not simultaneously purchasing a new one. Since auto insurance is mandatory, it is illegal for you to drive uninsured. When cancelling a policy, make sure you have written confirmation from the new company.
Cheap Auto Insurance
Take Home Message
Auto insurance is mandatory, so if you are considering canceling a policy, make sure you do it correctly. In order to avoid a lapse in coverage, you should seek confirmation of the new policy before you hit the road.