Under What Conditions Would You Cancel Your Personal Auto Insurance?

cancelledRecently, one of our clients called to ask us if they could cancel their personal auto policy. The answer to this question is “yes” provided that they turn in their license plates to the motor vehicle department, obtain a receipt (an FS-6) and send it in to us, their insurance agent, to cancel their policy. Without this receipt, we can’t cancel the policy. That is the law!

This prompted me to think about what conditions might lead someone to want to cancel their auto insurance policy. Here is a list of some possible reasons:

Getting rid of your automobile via sale, gift to another, making a decision to stop driving;

Receiving a suspension or revocation of your license in the State of NY. It is against the law to drive a motor vehicle in New York State with a suspended or a revoked license punishable by jail time, probation, loss of your vehicle as well as fines the imposition of fines which can be levied up to $5,000. As for driving in states other than New York, with a suspended/revoked license, most states participate in the National Driver Register (NDR) which has a database that includes and shares driver info regarding suspensions and revocations in most states. This protects other DMV’s from issuing licenses to such drivers who are at risk or whose records have been tagged with an alert. In addition, there is also a Driver’s License Compact (DLC) between most states which helps each state monitor suspension and revocations while their resident drivers are out of state. This measure helps the “home state” as well as the “guest state” put their own terms on whether or not someone is allowed to drive with a suspended or revoked license regardless if they are a resident or non-resident;

Your car is stolen and you have no intention of replacing it;

You have too many accidents and/or tickets on your record making the cost of your insurance prohibitively expensive.

Interestingly enough, having to turn in your license plates is an excellent requirement and one that absolves you of any financial responsibility once the plates are turned in. The motor vehicle department actually destroys the plates so that they can no longer be used by anyone else. This protects you from any ongoing financial responsibility.

So should you decide that you no longer have a need for your automobile, remember that without the FS-6 we can not cancel your policy. And, please, we implore that you do not let your automobile policy cancel for non-payment of premium as the insurance company, by law, must notify the Motor Vehicle Department. This can result in major fines and/or suspension of your driver’s license. If you have any other questions, we suggest you notify your insurance immediately.

- Karen Skoler, CPCU

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