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The TRUTH about Canceling Your USAA Car Insurance

There may be situations where you need to cancel your car insurance policy. For example, if you have obtained a new insurance carrier or sold your car. However, before you pick up the phone to cancel, there are some things you need to consider. Here are the steps you should follow to cancel your car insurance with USAA.

Step 1: Reflect on Cancellation Reason

The first step in canceling your USAA policy is determining the reason you are looking to cancel. If you are getting rid of your car completely, this step will be easy. However, if you are looking to cancel for any other reason, there may be other options for you.

No Longer Driving

Are you no longer driving your car? In the event that you aren’t going to be driving your car, canceling your insurance policy should be done only after the registration is canceled. Remember that insurance is mandatory in many states, and penalties can be incurred if you cancel your policy prematurely. Also, there are losses your car can incur even without being driven. For example, if your vehicle is parked and is vandalized, stolen, or damaged by hail, you will potentially want coverage for that. Many companies offer coverage for cars that aren’t being actively used for some time, so it’s definitely worth looking into.

Sold My Car/Car was Totaled

Not having a car is the best reason for canceling your car insurance, right? Not necessarily. Before you cancel your policy, you should consider when you might be getting a new one. It is typically recommended that you keep your current policy active if you are going to be getting a new car relatively soon, generally within the next 30 days. It is much easier to add/replace a car on your policy than to cancel and apply for a new one. This can also help with keeping continuous coverage in place. You should also consider whether you will be driving anyone else’s car during this time. If so, be sure that you’ve been added as a driver on their policy in the meantime to ensure you have coverage.

Cannot Afford Insurance

Insurance can be costly, especially if you’re an inexperienced or high-risk driver. Luckily, there are other options outside of going without insurance. Each company has its own rates and discounts, so it’s worth getting quotes elsewhere to see if you can save some money. USAA also has agents willing to review your policy with you to see if there are ways to lower your premium without having to switch. Maybe your car is older, and you can eliminate physical damage coverage, for example. It’s also critical to remember that while you might be saving some money in the short term by forgoing insurance, you may end up paying more in the long term if you are in an accident and have to pay for those damages out of pocket.

Got a New Car

Contrary to popular belief, you do not need a new insurance policy when you get a new car. If you have an existing auto policy, you can simply add that car or replace your old car with the new one. Most often, you get to keep the same policy number, your tenure with the company, and any applicable discounts you have earned. And while there is a chance you can save money by switching to another company, that is not always the case. Your best bet most times is to keep your existing policy and update the car.

Change in Marital Status

Similar to a vehicle change, you do not necessarily need to switch insurance companies when you have had a change in marital status. If you are recently married or divorced, you can easily add or remove your spouse by contacting USAA. The benefit to doing this is that you keep your tenure with the company, and it’s much easier than switching companies altogether.

Bundling Auto/Home Policies

USAA offers many other lines of business in addition to auto insurance. If you haven’t already, it is recommended to get a quote for your home as well to see how much you can save on your auto insurance. They might even be able to save you money on your homeowners’ insurance too! While bundling has the potential to save you money, it’s not always the case. In fact, the convenience of having both of those policies with one carrier is often the primary driver of bundling. But another option is to quote the most cost-effective insurer for your homeowners, even without the accompanying auto policy. Sometimes keeping policies separate can save you more money than bundling with one company, which will allow you to keep your auto insurance right where it is.

I Am Being Deployed

One of the most significant benefits to remaining insured with USAA is that they are the experts on Military families and their needs. They even have a specialized team who can help you navigate deployments. In general, if your car is not going to be driven, you may want to consider covering it for the events that could still happen while parked. You may also need to add any additional drivers to your policy that will have access to your car while you’re away.

Step 2: Obtain New Insurance

Next, you will need to get a new insurance policy lined up before canceling your current one if you haven’t already. There are a few reasons for this. First, insurance is mandatory in many states. This means that the state will require you to carry liability insurance on any car that is actively registered. Unless you have canceled the registration, you need to maintain insurance coverage to avoid any penalties or fees from the State. Secondly, almost all insurance companies will use prior insurance as a basis for your premium. If you have any lapse in coverage, even for a few days, your insurance price can be higher than it would be if you have maintained continuous coverage. Last, if you have a lease or loan on the car, your bank will also require you to keep insurance on your vehicle. Otherwise, they will force place coverage, meaning they take out a policy for you and charge you a significant amount of money for it.

Researching New Carriers

While researching new carriers, it’s critical to compare your quotes with your current USAA policy. The coverages being quoted and the reputation and financial stability of the company are some of the aspects you need to consider. For example, if the price is lower, but you are sacrificing coverage, then you are comparing apples to oranges. Be sure to ask the new company to quote you with the same coverage you have with USAA to ensure you are truly saving money.

While the price may be an important consideration, it shouldn’t be your only one. Check the Better Business Bureau for consumer reviews on the company you’re looking to switch to. Are their customers satisfied with their claim and customer service? USAA is known for its stellar customer service and high claims satisfaction, so it’s crucial to understand what you’re getting into with a new company. Financial stability is another piece you should research. AM Best and Demotech are some of the agencies used to rate insurance companies and are a great way to determine a carrier’s financial strength.

Step 3: Contact USAA

After you have determined why you need to cancel your policy and obtain new insurance, you need to contact USAA. The main policyholder needs to request the cancellation, and a power of attorney may be required if you are canceling on behalf of someone else. Fortunately, USAA makes canceling your policy with them very easy by offering numerous options to do so. You can contact them directly via phone, web, or mail to cancel or via their mobile app. If calling, simply dial 800-531-8722 during their available hours. But be aware that you will need to enter your policy number or the main policy holder’s social security number in the IVR to get a representative and start the process. Once you are speaking with a USAA representative, they can walk you through the remaining steps to get your policy canceled.