You should cancel your insurance after you junk your car. You want to keep your coverage active until your vehicle has left your property. This will help to avoid any coverage gaps. You're liable until the car is gone, accidents can happen before towing, theft is possible leading up to the pickup date, and insurance may be required to complete a legal sale.
Steps to properly cancel:
- Get your receipt from the buyer confirming the sale is complete
- Wait until your vehicle is off your property
- Call your insurance company or cancel online
- Get cancellation confirmation in writing
Refunds for unused premium:
- Most insurers prorate refunds from the cancellation date
- Refund amount depends on how much time was left on your policy
- Payment usually takes 1 to 4 weeks
- Some policies have cancellation fees so check your terms
If you have multiple vehicles on one policy, remember to just remove the vehicle you got rid of rather than canceling the policy entirely.
