How to cancel car insurance in Massachusetts

There are many reasons to cancel your car insurance in Massachusetts. You might sell your car, move to another state, switch to a better policy, or buy a new car and drop non-owned auto insurance. When and how you go about the insurance cancellation process matters. If you cancel at the wrong time, you might have to pay a cancellation fee or leave yourself open to liability. But, as long as you’re thoughtful, canceling auto insurance in MA isn’t too complicated.

Important things to consider before canceling your policy

Before canceling your car insurance, be sure that it’s a good idea! In some cases, canceling your policy can result in a cancellation fee, higher premiums in the future, or even violating state laws. Having a lapse in your auto insurance history, especially if the break is more than 30 days, may make you ineligible to be insured by some insurance companies, or put you in a higher rate tier.

Also, you should only cancel your policy if you are either getting a new policy or will no longer be driving the car.

Canceling auto insurance to get a new policy

If you’re planning to cancel your policy but keep driving, make sure you won’t have a gap in your coverage. Here’s why:

• It’s the law. State laws almost everywhere in the U.S. require drivers to have liability insurance. If you get caught driving without insurance, your state could suspend your license, fine you, or even put you in jail.
• You need liability protection. If you cause an accident while uninsured, you’ll be responsible for paying for the property damage and injuries you cause. Most Americans couldn’t afford to pay for an accident out of pocket. The average property damage liability claim is around $4,200 and the average bodily injury claim is more than $20,000.

Canceling insurance because you’re getting rid of your car

Selling, donating, or passing your car on to a relative? If you will no longer be driving your car, you can safely cancel your insurance without buying another policy. Just make sure you set your cancellation date for after the sale or title and registration transfer. If someone test-drives the car and causes an accident while your name is still on the registration, you could be stuck paying for the damages.

Timing is everything in the cancellation process

It’s important not to cancel your policy until you no longer need liability protection. Timing also matters for cancellation fees and your future premiums. If you suddenly ask your insurance company to cancel your policy in the middle of a year-long contract, the company may charge you a cancellation fee. Similarly, canceling your car insurance without another policy lined up will put a gap in your insurance record. Insurers quote higher rates to customers with a gap in their insurance history. Yes, even if the gap is because you didn’t have a car.

Ways to cancel your auto insurance

Cancellation for non-payment

Don’t do this one! Yes, if you stop paying your premiums, your insurer will cancel your policy. But a cancellation for non-payment will show up on your insurance record. When you look for a new policy, insurers will charge you higher rates. It may also affect your credit score.

Pro-rata cancellation

If you chose an insurance policy with pro-rata cancellation, then the insurer will refund you the part of the policy you didn’t use. For example, if you cancel a 12-month insurance policy costing $1,200 after six months, you’ll get a $600 refund.

Short-rate cancellation

If your policy has short-rate cancellation, your insurer decides what to do with your refund. Most short-rate cancellations give back a percentage of the pro-rata refund amount. The insurer keeps the rest as a penalty for early cancellation. Your agent can tell you which type of cancellation your policy includes.

How to cancel your auto insurance policy

Plan for your next policy

If you’re changing policies because you’re moving, trading in your car, or want a better rate, shop around.

Decide exactly what types of car insurance and limits you want in a policy. You may want to stay with the same coverage levels as your current insurer or make changes. To find the best deal, try shopping with an independent insurance agent. An independent agent can get you quotes from multiple insurance companies.

Once you’ve made your choice, make sure you know the date your old policy ends and your new policy starts.

Decide when to cancel your old policy

You always want to be covered, so make sure your plans won’t leave you uninsured for even one day.

If you’re getting new car insurance, choose a cancellation date the same day or the day before your new policy starts.

If you’re not buying new coverage, choose a cancellation date the same day you’ll be relinquishing ownership of the car.

Cancel your old insurance

Call your old insurance company or insurance agent to let them know you want to cancel your policy on the date you’ve chosen. Ask them how the cancellation process works to make sure you follow it correctly.

The insurer might ask you to put your cancellation request in writing, so they have documentation of your request. You should ask for a cancellation notice to confirm that your policy is canceled so you have it in case you ever need it.

What's the 2A form in Massachusetts?

In Massachusetts, there's one more state-specific step to canceling an auto policy - making sure a form called a 2A gets to the agent or insurance company responsible for the policy you are canceling. They'll often refuse to cancel your policy until they get it.

Your new agent or new insurance company will generate the 2A, which can be a paper notice or an email attachment. It's not just a cancellation letter - it has a Massachusetts auto insurance stamp and signature on it as well as your new insurance company name, your policy number, and your effective date. Sometimes your new company will send it directly to your old company or agent, but sometimes they'll give it to you instead. If that happens, call or email the company you are canceling with and ask them where to send the 2A.

Once the cancellation date comes, and assuming your prior company has a 2A for you, you’ll get your refund – pro-rata or short-rate, depending on your policy. If you incurred a cancellation fee, your insurer will subtract it from your refund.

And your new agent or insurance company will notify your prior agent or carrier. That’s it! Now you’ll be able to get back on the road with your new policy or adjust to your car-free life.