When should I cancel insurance?

When should I cancel insurance?

Want to know the exact moment to cancel insurance and avoid a costly gap? Don’t guess — use this checklist.

Short answer: Cancel insurance only after your new policy is active or your legal responsibility ends. Stop the old policy the day after coverage on the new property or vehicle begins, or on the official closing/move-out date — never before.

Quick, practical rule

• Confirm the effective date of your new policy in writing.
• Keep the old policy active until the new policy’s effective date or until you no longer have legal or financial responsibility.
• If you’re selling a home, keep liability and hazard coverage through closing.

When to cancel by insurance type

• Homeowner or condo insurance: Cancel on the day after the buyer’s closing date or when your lender releases interest. Keep it until keys transfer and mortgage obligations end.
• Renters insurance: Cancel the day after you leave the unit and return keys. Keep coverage during move-out for liability and loss during transit.
• Auto insurance: Transfer or start your new policy for the exact day you take possession of a new car. Cancel the old policy the following day to avoid a coverage gap.
• Flood, title, or specialty policies: Maintain these until the new owner or new policy covers the risk.

Steps to cancel safely (7-minute plan)

1. Book the new policy and get the effective date in writing.
2. Verify proof of insurance for the lender or new landlord.
3. Notify your current insurer 30 days in advance if required by contract.
4. Request prorated refund or premium transfer before final cancellation.
5. Ask for a written cancellation confirmation and policy termination date.
6. Update address and VIN information to avoid billing or legal issues.
7. Keep records for at least one year after cancellation.

Avoid these mistakes

• Don’t cancel before closing or before your name is removed from ownership documents.
• Don’t rely on verbal confirmations — get dates in email or letter.
• Don’t assume coverage transfers automatically between states or provinces.

Why this matters

A coverage gap costs more than a prorated premium. One accident, one claim, or one lawsuit during a move can wipe out any short-term savings. Being precise about cancellation timing protects you from liability and financial risk.

Local help and trusted guidance

For moving and transition strategies that reduce risk and save money, work with a local expert who coordinates closing, insurance, and moving timelines. Contact Tony Sousa for clear, local guidance at tony@sousasells.ca or 416-477-2620. Visit https://www.sousasells.ca for moving checklists and one-on-one help.

Bottom line: Don’t cancel early. Confirm effective dates, overlap policies as needed, and keep proof in writing. That simple discipline saves money and prevents disasters during every move.