Is it a bad idea to remove a car from your insurance?

Removing a car from your auto insurance is easy, but you'll need to find another policy if you're still driving your vehicle. If you sell your vehicle, you can remove the car from your car insurance policy without consequence. You can get auto insurance rates for as low as $90/mo at another company, but you'll need to cancel your current insurance policy. Shop around and compare multiple companies before you remove a vehicle from your car insurance.

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Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Reviewed by Rachael Brennan
Licensed Insurance Agent

UPDATED: Aug 30, 2021

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Can't-Miss Facts

  • You should remove a vehicle from your auto insurance if you have sold it
  • Some auto insurance companies charge you a cancellation fee
  • It’s recommended that you have another auto insurance policy waiting before you cancel

Did you sell your car recently? If you’ve sold your vehicle or lost your car in a total loss accident, you’ll need to remove the car from your auto insurance policy.

Maybe you want to buy another car insurance policy. If so, you’ll need to set up insurance with another company.

But what happens if you don’t get another auto insurance policy? Is it bad to remove a car from insurance? Don’t worry – we’re here to help.

Our guide explains everything you need to know about when to cancel insurance after selling a car, how to compare auto insurance, and how to cancel car insurance without charges.

Before you remove a car from auto insurance, enter your ZIP code in the free online quote tool above to compare multiple companies near you.

Is it bad to remove a car from your auto insurance?

It depends on your situation. If you’re shopping for car insurance, it’s a bad idea to remove your vehicle from your current insurance policy before you get another one.

It’s not a good idea to remove auto insurance from a car with no coverage set up. This would create a coverage gap, ultimately increasing your risk.

Increased risk means more expensive auto insurance rates at the former and upcoming insurance companies.

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When should I remove a car from an auto insurance policy?

When a person sells a car or loses it due to a total loss accident, you’re safe to remove the vehicle from your auto insurance policy.

For example, you can remove a car from a GEICO insurance policy after you’ve purchased car insurance at another company or you’ve sold the vehicle to another driver.

If you want to switch auto insurance companies, you should shop around. Continue reading to see which car insurance companies are the best in the nation.

Why is comparing auto insurance companies essential?

If you’re looking for a better car insurance deal, don’t get in a hurry to grab cheaper rates. Instead, take your time and look for auto insurance quotes that work for you.

According to the National Association of Insurance Commissioners (NAIC), you could pay as low as $90 a month for full coverage car insurance. However, your rates will vary.

That’s because auto insurance is determined by several personal characteristics, such as age, driving record, credit history, location, vehicle, and coverage type.

Check out the information below to see how much full coverage and liability-only coverage cost.

Average Monthly Full Coverage vs. Liability-Only Auto Insurance Rates
CompaniesMonthly Full Coverage Auto Insurance RatesMonthly Liability-Only Auto Insurance Rates
Allstate$318$162
American Family$224$114
Farmers$288$147
GEICO$179$91
Liberty Mutual$398$203
Nationwide$229$117
Progressive$283$144
State Farm$235$120
Travelers$287$147
USAA$161$82
Average$260$133

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Liability-only coverage is much cheaper than full coverage. But full coverage auto insurance has more perks, such as collision and comprehensive insurance.

Drivers who are still making payments on their vehicles are required to carry full coverage car insurance.

If you’re not making payments on your car and want to save money, you can reduce your coverage by switching to liability-only auto insurance.

When auto insurance becomes too expensive, start looking for better deals at other companies. But you’ll need to cancel your car insurance policy before you can start another one.

How do I cancel an auto insurance policy?

Canceling your car insurance policy is easy. Contact your auto insurance company and let them know you want to cancel your insurance policy.

Some car insurance companies make you pay a cancellation fee, which can be between $25 and $50.

The other type of fee you may encounter is called a short rate fee. A short rate fee is about 10% of your policy balance.

But some of the best companies will let you out of your auto insurance policy without any fees.

If you can help it, try to cancel your policy on a specific date. This gives you time to change your mind if a policy doesn’t turn out the way you want.

Also, picking a specific date can prepare you for any delays, which are likely to occur more during the COVID-19 pandemic.

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Can I remove a driver instead of removing a car from an auto insurance policy?

The answer is yes. You can remove teen drivers, roommates, and other drivers you’ve added to your policy.

However, a teen that still lives with the policyholder should remain on the policy as a driver. Also, spouses cannot be removed as drivers unless you have permission to do so.

Is it a bad idea to remove a car from your insurance? The Bottom Line

It’s safe to remove a car from your insurance policy if you’ve sold the vehicle or have another policy waiting for you.

We don’t recommend removing a vehicle without getting another policy to cover you. Give yourself time to shop for another auto insurance policy before you cancel.

Now that you know how to remove a car from insurance, use our free online quote tool below to compare multiple companies in your local area.

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