Is There a Fee to Cancel State Farm Car Insurance?
Last Updated on October 16, 2020
Drivers switch car insurance companies regularly. If you’re a State Farm policyholder, then you may want to cancel State Farm car insurance for several reasons.
Typically, State Farm does not charge a fee to cancel an insurance policy. Instead, you should be able to cancel your State Farm car insurance policy without penalty. In fact, some drivers may receive a refund on any State Farm insurance premiums they have already paid.
However, depending on state insurance laws, you could pay a small penalty to cancel State Farm car insurance in certain states.
Today, we’re explaining how canceling State Farm car insurance works, including whether or not there’s a fee to cancel your State Farm car insurance policy.
State Farm Does Not Typically Charge a Cancellation Fee
In most cases, State Farm does not charge a fee to cancel a car insurance policy. Instead, you call State Farm to cancel your policy, and you can choose the specific date on which your policy is canceled.
You can cancel your State Farm car insurance policy today, for example, and end your contract with State Farm immediately.
In most cases, State Farm will not charge a cancellation fee whether you cancel your policy online or over the phone. In fact, if you have prepaid car insurance premiums for the upcoming weeks, months, or year, then you could receive a refund on any unused premiums.
If you paid your State Farm insurance premiums until the 30th, for example, but you are canceling your car insurance policy on the 15th, then State Farm may refund the unused premiums from the 15th to the 30th. You paid for this insurance coverage, but you did not use it, which is why you’re eligible for a refund.
Most states require you (or your insurance company) to inform the DMV when you cancel or change car insurance coverage. If you cancel your car insurance and do not buy another policy, for example, then the DMV may cancel your vehicle registration, which means you cannot legally drive on roads in your state.
How to Cancel a State Farm Auto Insurance Policy
There are three ways to cancel your State Farm auto insurance policy:
- Cancel by phone
- Cancel by mail
- Cancel in person
Whether canceling by phone, mail, or in person, you should be able to easily end your State Farm auto insurance policy without penalty.
Here’s the basic process for canceling an auto insurance policy with State Farm:
Step 1) Contact State Farm by phone, email, or in-person.
Step 2) Inform State Farm you wish to cancel your auto insurance policy. You should need your policy number, name, date of birth, and other details to cancel your auto insurance policy.
Step 3) If you’re canceling your auto insurance policy because you sold your vehicle, then you may also need to provide proof of your vehicle’s plate forfeiture or a bill of sale.
Step 4) Most State Farm auto insurance cancellations are processed immediately. However, you can also schedule your cancellation date for any point in the future. Whether you want to cancel your State Farm auto insurance immediately or three weeks from now, you can inform State Farm of your desired change.
Step 5) If you plan to continue driving with a different provider, the State Farm agent may ask for your new provider’s name, policy number, and effective date. State Farm isn’t being nosy: they may need to inform your state’s DMV of any changes.
Does State Farm Charge a Cancellation Fee?
State Farm will not charge a cancellation fee to most policyholders in most states. State Farm has no cancellation fee policy listed on its official website. As far as we can tell, State Farm has no formal cancellation fee policy in place, and we can’t find any significant evidence of customers paying a cancellation fee to cancel State Farm auto insurance.
However, because of state insurance law, State Farm may require the following after you cancel your car insurance policy:
- Proof you forfeited your license plate to your state’s DMV (or your state’s equivalent to the DMV)
- Proof you sold your vehicle (like a bill of sale)
- Proof you obtained a new car insurance policy (if you plan to continue driving your vehicle)
In some states, you don’t need to provide any of this information to State Farm. You can simply cancel your policy and switch to a new provider with minimal hassle.
How Auto Insurance Refunds Work
State Farm and most other major insurance providers in the United States do not charge cancellation fees. However, you could qualify for a refund on auto insurance premiums in certain situations.
Typically, your insurance company will refund the entire unused premium after cancellation. If you have prepaid for a month, 6 months, or 12 months of insurance coverage, for example, then you could obtain a refund on this amount.
State Farm Could Charge a Fee for Canceling in the Middle of your Term
In most states and in most situations, State Farm will not charge a cancellation fee for ending your auto insurance policy.
However, based on state law, State Farm could charge a cancellation fee if you cancel your policy in the middle of your term. Some states allow insurers to charge a cancellation fee of around 10% of remaining policy premiums, for example.
If you have 3 months of coverage remaining on your State Farm auto insurance policy, and you pay $100 per month for car insurance, then it’s possible you could pay a $30 cancellation fee (10% fee and $300 of coverage remaining on your policy).
However, most policyholders will not pay any type of cancellation fee when canceling a State Farm auto insurance policy in any state.
Final Word on State Farm Cancellation Fees
State Farm and most other major insurance companies in the United States make it easy to cancel your car insurance policy. Drivers change car insurance policies regularly, and most insurance companies accommodate cancellation requests.
Maybe you sold your car. Maybe you’re no longer driving. Maybe you found cheaper rates or better coverage with a different provider.
Whatever the reason may be, you should be able to easily cancel your State Farm auto insurance policy without a cancellation fee or any other penalty.