Canceling Auto Insurance

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 30, 2010

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Insurance Question from Mount Airy, NC

Asked on 07/30/2010

Canceling Auto Insurance My son recently canceled his automobile insurance and turned in his tags June 28.He called his agent to inform them of this.July 21,2010, he is notified by mail he owes $94.64 and his policy is being canceled due to non-payment for July and August payment. We are told you cannot cancel a policy in mid-term in NC.Is GMAC correct?

Answer given on July 31, 2010

While I don’t know NC law, it seems very unusual that a person could not cancel an insurance policy if they no longer own a car.  I am wondering what his insurance agent told him when he called to cancel his insurance.  Did they say he could not cancel?  it seems odd that he cannot cancel his policy but the insurance company can do so for non payment of the premium and disregard the policyholder’s request to cancel.  He needs to call his agent and get clarification.

You mention GMAC.  If your son had a loan on the car, it is possible he couldn’t cancel the insurance until the car was paid off.  If he still owes money, the insurance company may not be allowed to cancel the policy. 

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