Is There a Fee to Cancel GEICO Auto Insurance?
Last Updated on September 15, 2020
You may want to cancel GEICO auto insurance for various reasons. When you cancel your GEICO insurance policy, will you pay a cancellation fee?
GEICO does not charge a cancellation fee on auto insurance. You can cancel your auto insurance policy over the phone at any time without paying a cancellation fee. In fact, drivers receive a refund on any premiums they have paid.
Today, we’re explaining everything you need to know about canceling GEICO auto insurance, including whether or not you need to pay a GEICO car insurance cancellation fee.
Reasons to Cancel GEICO Auto Insurance
There are plenty of reasons to cancel an auto insurance policy. Generally, GEICO is one of the cheapest car insurance companies in the United States, but there are still good reasons to cancel coverage.
Some of the Common Reasons to Cancel Geico Auto Insurance Include:
- Moving to a different city, state, or country
- Changing your marital status
- Selling your vehicle (say, if it’s totaled or inoperable)
- Putting your car in storage
- Combining multiple policies with one company
- Can no longer afford it
- Found a cheaper rate elsewhere
- Unsatisfied with GEICO for any reason
GEICO offers car insurance in all 50 states and Washington D.C. Generally, wherever you live in the United States, you can get a GEICO car insurance policy without issue.
However, GEICO may not be the best or cheapest option in every part of the United States. Some cities have better local insurance companies, for example. In some states, GEICO is the cheapest option. In other states, you may find better rates with a different company.
Overall, dozens of factors impact car insurance, and you can cancel GEICO insurance for any of the reasons mentioned above.
How to Cancel GEICO Car Insurance
GEICO only allows car insurance policy cancellations over the phone.
You must call (800) 841-1587 to speak with a GEICO agent for assistance. Say ‘cancel insurance policy’ and then ‘auto’ to reach the right destination through the robocall system.
The agent may ask for your GEICO policy number, so have it ready.
GEICO Does Not Charge Cancellation Fees
GEICO, like most car insurance companies in the United States, does not charge a cancellation fee. You will not pay any type of fee to cancel your policy.
However, GEICO and other insurers may use a short rate cancellation policy, which allows the insurer to keep a chunk of your premium. This is similar to a cancellation fee – although it’s technically different from a cancellation fee.
However, GEICO handles money in different ways, depending on your policy, your cancellation, and other factors. You may receive a refund on your policy – or the insurer may keep a portion of your premiums.
Pro-Rata or Short Rate Cancellations
When you cancel car insurance, you receive a refund on any premiums you’ve paid. Depending on your state and insurer, you can receive a refund short rate or pro-rata.
With a short rate refund, your insurer is essentially charging a cancellation fee, although it’s technically not a fee – it’s premiums that you have already paid.
Here’s how pro-rata and short rate insurance policy refunds break down:
Pro Rata: Most insurance companies use pro-rata cancellation policies. With pro-rata, the insurer ‘pro rates’ your insurance policy for the number of days you want to be covered. If you call GEICO and want your policy canceled on December 12, for example, then you will be charged up to that day, paying a pro-rated daily rate for insurance until your policy is canceled. Pro-rata means ‘equal proportions’. If you have already paid premiums for the next month, then GEICO may refund premiums up to your chosen date.
Short Rate: Some states allow insurers to give short rate cancellations. With short rate cancellations, the insurer keeps a larger percentage of the premiums on your policy. Your insurer charges you up to the date you cancel your policy, although they also capture some of the extra premiums you would have paid between your cancellation date and the policy end date.
Most insurers use the more consumer-friendly pro-rata cancellation policy. However, some states allow short rate cancellations, and insurers often take advantage. GEICO’s cancellation policies vary between states, so make sure to ask your insurance agent which type of refund you are receiving on car insurance.
Buy Replacement Insurance Before You Cancel
If you cancel GEICO car insurance and continue driving past your cancellation date, then you have a lapse in coverage. You are driving without car insurance, which is illegal in most states.
Driving without car insurance isn’t just illegal: it’s dangerous. A single accident could lead to bankruptcy. You could be liable for any damages, medical bills, and other expenses you cause while driving.
To avoid a lapse in coverage, buy replacement insurance before you cancel (if you plan to continue driving). Your replacement policy should begin on the date you cancel your previous policy. If you cancel your GEICO auto insurance for December 12, for example, then your new policy should begin on December 12. When you cancel car insurance, it expires at 12:01 am on your cancellation date. If you started your new policy on December 13, you would have a one day lapse in coverage.
Enter your ZIP code and compare quotes online today to find better insurance options than GEICO.
Final Word – GEICO Cancellation Fee
Most car insurance companies in most states do not charge cancellation fees. In most cases, you can cancel your auto insurance policy with any company without issue.
GEICO, like most of its competitors, does not charge any termination fees or cancellation fees. Call GEICO to cancel, then check if you’re getting a pro-rata or short rate policy cancellation.