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How do I purchase online auto insurance if my contract is still active?

Things to Remember...
  • Always have a new car insurance policy in place before you cancel your old policy
  • Lapses in coverage can have serious consequences including high insurance rates
  • Make sure you contact your insurance provider to see if you have to pay a cancellation fee

It is simple to purchase online auto insurance if your current contract is still active. In fact, if you are considering changing car insurance providers, you should complete this step first.

Switching car insurance companies is your right as a consumer. Many customers believe they must wait until the renewal period; however, this is not true.

If at any time you feel the need to change, you can. The best way to complete this task is to obtain a new policy in advance.

A car insurance policy is non-contractual so you are not under obligation to remain with them for any length of time.

Insurance companies do not have the right to deny your request to cancel. You do not need to go into detail either. You can explain your reason in simple terms.

Enter your ZIP code into the FREE toolbox on this page to receive great car insurance rates quick and easy today!

Table of Contents

Obtain a New Auto Insurance Policy Before You Cancel Your Old Policy

To avoid negative implications, always obtain a new policy first. It is never a good idea to cancel your service with your current car insurance provider first.

Remember, as soon as you cancel, you will no longer have car insurance. You need to make sure you never have a lapse in coverage, even for a day.

The Consumer’s Guide to Auto Insurance shows how the car insurance companies make specific inquiries. When you approach them for a new policy, they do research on you.

One of the most important issues they investigate is previous car insurance statistics, like information on your previous coverage options and your status.

If they discover a lapse in your coverage, they may quote you a higher rate. They may not know you canceled to switch providers. All they see is a span of time when you did not have coverage.

The only way for you to keep your positive history is to find your new car insurance provider before making the switch. Start reviewing your options and compare the pros and cons.

Once you decide on your new auto insurance provider, go online to their website. Complete the steps required to obtain the level of coverage you desire.

Penalties for Early Cancellation

Under normal circumstances, you can walk away without penalties. Unfortunately, some car insurance companies will charge an early termination fee.

This information is likely included in their disclosure statement. You can also review the terms and agreements of hidden costs.

If it is included, it will be difficult to challenge. Chances are, you agreed to this fee whether you realized it or not. They may consider this a way to recoup losses because you cancel while your policy is still active.

During renewal periods, most car insurance companies expect a certain level of loss so they plan accordingly.

However, when the cancellation occurs and your policy is still in effect, it takes them by surprise. Be sure to review the conditions.

Your auto insurance provider may have a way of costing you more when you cancel.

Other penalties may not be monetary but could include renewal discounts or earned rewards. You may lose these benefits when you cancel your policy.

Contacting Your Current Auto Insurance Provider

Once you initiate coverage with your new car insurance company, contact your current provider. Try to reach out to them as soon as your new policy is effective.

You should complete this step within 24 to 48 hours of activating your new account.

Try to gather a few handy items before you call. Find your current policy and locate the effective date. The effective date is important if you cancel during the beginning or middle of your policy.

Many auto insurance providers will accept a verbal notice of cancellation. Others may require you to send a written request. Since they all vary by policy, you should not make assumptions.

When you contact the representative, ask them for specific instructions. If they accept your oral request, you can move forward. If not, you will need more information.

A written cancellation request means you need to draft a letter. The notice should include your name and address, policy number, the effective date of the cancellation and contact phone number.

The representative can provide you with all of the specifications. They may accept an email rather than a standard hard copy. Ask about your options.

You may not have the ability to cancel immediately, and this means you may have two active policies. If this is the case, your cancellation will be in a pending status.

Waiting Periods

Most car insurance companies do not have waiting periods. That means as soon as you contact them to cancel, it is completed. Others, however, require between 15 to 30 days before your request is complete.

These types of providers may continue to bill you as well. While they may still generate a statement, you should only have an obligation to pay up to the cancellation date.

In many cases, you may not have to make the payment at all because the administration process could take up to 30 days.

This is why it is essential that you obtain your new car insurance policy before you cancel.You may want your cancellation to take effect immediately, but they have steps to complete.

Just make sure you confirm everything. Get the dates and ask as many questions as possible.

Once they complete the process on their end, you will receive an update. You should wait until you receive their notice advising of the cancellation.

The letter will have the effective date that should match the date on your written request.

They should honor your original request date and backdate all of the charges. Most times, they will prorate the amount you used.

If you paid your premium in full, the notification should include refund details.

Consider Other Requirements

At times, you may need to take another step when changing car insurance providers. Your new car insurance provider should inform the finance company, but it can sometimes take up to 30 days.

Meanwhile, the finance company may receive notice from the Motor Vehicle Commission from your old car insurance company. They must inform the MVC of the cancellation so they can record the data.

Every state needs to have information on uninsured motorists.

To avoid this common situation, just give them a call. They will more than likely require proof. Some will accept a scanned copy or ask you to fax it to their office.

This is also true if you want to make a name change; like when the insurance is in your name, but the car registration is not.

For example, in New York City both must match. If not, they consider the change a lapse in your coverage. You will need to report to the MVC to register the vehicle in your name.

Not all states are as strict, but the laws are very specific. You should make sure you understand all of the implications involved.

Before you make any changes to your current car insurance policy, check with the Department of Insurance or a similar agency in your state.

A lapse in auto insurance coverage in any state results in major penalties. You can even lose your right to drive. A simple phone call can prevent this type of problem.

Make Sure Your New Provider Meets Your Expectations

If you are switching auto insurance providers based on price only, this can backfire.

The J.D. Power 2012 U.S. Insurance Shopping Study shows 25 percent of the consumer population shopped for car insurance last year. However, 43 percent of these shoppers actually switched providers.

While price was a major factor, it was not the only one. They also considered the policy offerings and availability.

When you make the decision to purchase a new policy, it may be best for you to consider this. 

Certain auto insurance companies may have sub-standard customer service. Others may not provide you with a diverse number of options.

A reputable company has the ability to measure the customer’s expectations with their business demands.

If you want the option of receiving great car insurance rates, just click here to add your ZIP code in the FREE tool!


  1. https://www.thebalance.com/can-i-cancel-car-insurance-anytime-527400
  2. https://www.moneysupermarket.com/car-insurance/articles/cancelling-car-insurance-what-to-expect/
  3. http://www.dbr.state.ri.us/documents/divisions/insurance/property_casualty/com_guide-auto_insur.PDF
  4. http://www.dmv.ny.gov/insurance.htm
  5. http://www.jdpower.com/content/press-release/cObh6yM/2012-u-s-insurance-shopping-study.htm

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