When Can I Cancel My Car Insurance After My Car Has Been Repossessed?

You should cancel your car insurance the moment your vehicle is repossessed. Otherwise, you're paying to insure a vehicle that doesn't belong to you. You should also return your license plates promptly. This way, you will likely receive a refund from your insurance provider and your state for your prepaid registration.


Cancelling Your Insurance

As soon as you are no longer in possession of your vehicle or plan to drive it, cancel your car insurance. If you already know that your vehicle is going to be repossessed and have stopped driving the car, return your plates and call your insurance agent to cancel your policy. Keeping insurance coverage on a car you're not driving or don't own any longer is a waste of money. Additionally, any refund you might receive is based on the day you actually cancel your policy or return your license plates.


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Returning Your Plates

You may have to provide your insurance company with proof that your plates have been returned to a motor vehicle office before canceling your policy. If your vehicle was repossessed with your plates still fixed on the car, pick the plates up from the repossession agency that seized the vehicle. If you aren't sure who has your car, call your lender or your police department. If you don't want to get your plates, many states allow vehicle owners to report plates as lost or stolen, so check with your state's motor vehicle department for information.


Insurance Cancellation Requirements

Aside from proving that you returned your plates, insurance companies have different rules for policy cancellations. Your insurance provider may allow you to cancel over the phone, but you may have to sign cancellation documents. Follow your insurance company's procedures. If you use a local agent or broker, you can go to an insurance office to sign and obtain necessary forms. If your insurance company is not local, handle email and fax correspondence quickly so your insurance cancels in a timely manner.



If you paid your policy in full or one month ahead of time, you should receive a refund for the remainder of your policy or month's payment. Ask your insurance provider for details. Because of the opportunity for a refund, it is important you cancel your insurance as soon as possible. Because you also returned your license plates, you should receive a refund for your vehicle's registration. Some states require a one or two year registration payment at the time of registration. Any portion not used on your registration is refundable or transferable if you plan to register another vehicle.



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