Do I Need to Cancel My Insurance Policy or Can I Just Stop Paying?

by Jane Meggitt
If you've sold your car, it's important to notify your insurance company to cancel your policy.

If you sell your car and don't purchase a new one, you no longer need automobile insurance. Unless you inform your insurance agent, there is no way for your insurance company to know that you no longer need its services. It will continue to send you bills, which can cause problems if you never formally cancel the policy and don't pay the premiums.

Debt Collection

Although canceling an insurance policy doesn't affect your credit score, having a debt sent to collection causes major damage. That's what might happen if you don't formally cancel a policy and the insurance company just keeps sending you bills. By the time the debt collection agency contacts you, it's not just a question of canceling your policy but of trying to repair your credit rating. Picking up the phone or emailing your insurance agent to cancel the policy takes little time and can save you a lot of problems. Your agent will tell you exactly what needs to be done. You might even receive a refund from the unused portion of the premium.

About the Author

Jane Meggitt has been a writer for more than 20 years. In addition to reporting for a major newspaper chain, she has been published in "Horse News," "Suburban Classic," "Hoof Beats," "Equine Journal" and other publications. She has a Bachelor of Arts in English from New York University and an Associate of Arts from the American Academy of Dramatics Arts, New York City.

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