Cancelling the insurance w/in 1 yr - do I absolutely have to pay the fee?

Question

My car was totaled by the car accident just after I switched the insurance company, and I want to cancel my policy to get reimbursed for the rest of the time I have left since I may not get a new car for a while. But my insurance company is telling me that they will charge me 11% of cancellation fee if I cancel my policy w/in 1 year of contract. Can I somehow fight so that I don't have to pay / reduce this fee?

Answer 1

Not really.

You had the terms of the contract available to you before signing.  You are, in fact, benefitting from having the car insurance by having the coverage at the time of your accident. In addition, if you do NOT maintain car insurance coverage for more than 30-60 days, any new car insurance you obtain will have a different premium -- usually higher.  In this case, because of the accident (your fault OR NOT), the premium will undoubtedly be higher!

So, you can either cancel your insurance, pay the 11% cancellation fee, AND then pay a higher premium once you start operating a car again -- or, you can maintain your insurance coverage until it is closer to renewal time -- and even then you should check at least 3 other quotes against your current carrier -- but ONLY if you are completely accurate in reporting your accident/traffic ticket history!