How to Comprehensively Cancel State Farm Car Insurance

Questions: 

• Does State Farm charge a cancellation fee on auto policies? 

• I don't like my State Farm agent. Can I get a new one without cancelling my policy?

• How much notice do I need to give State Farm to cancel my policy?

Jake from State Farm may be the most famous khaki-wearing insurance agent of all time. But even Jake's likable demeanor may not keep you from wanting to part ways with State Farm. Fortunately, the Illinois-based insurer makes it easy for you to cancel your auto coverage on short notice.

State Farm Car Insurance Cancellation Policy 

State Farm will accept your auto policy cancellation over the phone, by mail, or even in person. You'll need to have your name, address, phone number, date of birth, and policy number on hand, plus proof of new insurance or a bill of sale showing you've sold the car. You can cancel your auto coverage immediately, or on some future date.¹

1. To cancel by phone, call 800-STATEFARM.

2. To cancel by mail, send your documentation to Corporate Headquarters, State Farm Insurance, One State Farm Plaza, Bloomington, IL 61710. Pop that information in the mail at least two weeks before the date you want to end your coverage. 

3. To cancel in person, bring the paperwork and information to your agent's office and request your cancellation. 

You will owe prorated premiums through your cancellation date. If you paid beyond that date, State Farm would refund you on a prorated basis for the unused days of coverage.  

State Farm Insurance cancellation fees 

State Farm does not normally charge a cancellation fee.² However, it's wise to read your policy documents or ask your agent if you are subject to a fast rate. The short rate calculation adds a percentage to your premium and then pro-rates what you owe from that higher amount. While that's not a cancellation fee, per se, it does result in you paying more. This practice is only legal in certain states and only applies when you cancel your policy mid-term. 

Cancelling Your State Farm Insurance, Step by Step 

Technically, the act of canceling your State Farm auto policy only takes five minutes. But the process is more complicated if you intend to keep driving your car. That's because most states legally require you to carry auto insurance. Knowing this, your State Farm agent will ask for proof that you have replacement coverage or that you've sold the car. 

If you're getting a new policy anyway, you might as well do the work to ensure you get competitive rates. Here's a breakdown of what to do.

1. Know your State Farm policy details

As a first step, review your current State Farm auto policy. Check the type of coverage you have and your deductible levels. Some questions to ask include: 

• Do you have any redundant coverage? For example, are you paying for roadside assistance through State Farm and maintaining a AAA membership at the same time?  

• Are your deductibles appropriate, given the amount of cash you keep on hand? If you have a savings account with $5,000 in it, you can probably afford to carry $500 or $1,000 deductibles. 

• Are your liability coverages sufficient, given your net worth? Minimum liability limits are cheaper, but they may not offer the protection you need if someone sues you. On the other hand, if you rent your home and don't have much cash on hand, you don't need high liability limits.  

This exercise may reveal opportunities to reduce your premiums or update your coverage levels. At a minimum, you should have a better sense of the coverages you'll want going forward -- and you'll need that when you start shopping around for lower rates. 

Make a note of your desired coverages, along with the date your current policy expires. 

2. Shop for a replacement policy 

Prospective carriers will ask you for your desired coverage levels and a coverage start date, along with your driving and vehicle information. If possible, use the same coverage and deductible levels for every quote you request. That way, you can easily compare premiums from different carriers. For the start date, use one day before your State Farm policy expires. A short overlap between the old and new policies ensures you don't inadvertently go without coverage. 

As you are gathering quotes, insurers may offer you different programs to lower your premiums. Bundling home and auto is a common one, along with good driving, military, and student discounts. Keep track of these deals; you can ask your State Farm agent if there's a similar discount available for your policy. 

3. Ask State Farm for lower premiums  

Most drivers who switch insurance carriers make the change for lower premiums. If that's your motivation and you have no other issues with State Farm, ask about lowering your rates. Your agent isn't going to slash your premiums just because you asked, but he or she may have some thoughts on discounts or policy changes that would save you some cash. One option may be State Farm's Drive Safe & Safe program, which tracks your driving habits to see if you qualify for lower rates.

Listen to your options with an open mind. Since you've already shopped other carriers, you know what State Farm has to offer for you to stick around. 

State Farm may also be able to address other reasons you want to switch, too. Maybe you dislike your agent, for example. In that case, request a new one. Simply call 800-STATEFARM, email agentselection@statefarm.com, or visit State Farm's website and tap on the button labeled "Change My Agent."³ 

4. Start your new policy 

If you don't like State Farm's final offer, it's time to lock in your new coverage. If you already have a quote from the carrier you want -- and you should -- initiating the coverage should be easy. Normally, you sign some documents and provide a form of payment. You may also need to send a picture of your driver's license and the exact odometer reading on your car.  

Don't forget to ask your new agent for an insurance binder or at least your new policy number.

5. Cancel your State Farm coverage 

Now for the easy part. Call up State Farm at 800-STATEFARM with your new policy number handy and ask to cancel your coverage. If you've already initiated the new policy, you can ask for immediate cancellation. Assuming you've timed this to land on the day your policy expires, you won't be charged additional premiums or fees. 

Take care not to skip this step. Your policy may be set up to renew automatically and auto-bill the next term's premium to your credit or debit card. If you don't notify State Farm that you're canceling, you may end up paying for two auto policies at the same time. 

The Fastest Way to Cancel Your State Farm Auto Policy 

The fastest way to cancel your State Farm auto policy is to call 800-STATEFARM. You'll want to have this information on hand when you call: 

• Your State Farm auto policy number 

• The date you'd like the coverage canceled

• If you still own the car, the name of your new insurance carrier, your new policy number, and that policy's start date 

• If you sold the car, you may need to forward a copy of your bill of sale 

Before You Cancel Your State Farm Policy 

Before you cancel your State Farm auto policy, you'll want to confirm a few details to ensure you're making the right move. 

1. Check the customer service ratings of your new insurer. State Farm has fairly high customer satisfaction ratings for its auto coverage. The 2019 U.S. Auto Insurance Study by J. D. Power rates State Farm as the sixth best in customer service, with a satisfaction score of 824 out of 1,000.⁴ If you are switching to a carrier that's less skilled from a customer service perspective, you'll want to know that and adjust your expectations accordingly.  

2. Check the financial standing of your new insurer. If you are switching from State Farm to a smaller carrier, take a few minutes to verify the financial standing of the new provider. An insurer that's unstable could be less reliable and more resistant to paying claims. The Insurance Information Institute explains how to evaluate an insurer's financial standing.

3. Contact your auto lender. Your auto lender requires you to carry minimum levels of coverage. Let your lender know of your plan to switch; you'll likely have to connect the lender with your new insurance agent so your coverage can be verified. 

4. Confirm you're not affecting other policies with State Farm. Insurance companies love to give discounts for bundling your auto coverage with your homeowner's policy. If you have other policies with State Farm, find out how those rates will change if you move your auto policy elsewhere. You could also get a bundled quote from the new insurer and move all your policies at once. 

5. Get proof of your new policy. As soon as you initiate the new policy, ask your new insurer for a binder or temporary proof of coverage. You need to have that insurance documentation on hand before canceling your State Farm coverage, just in case of an accident or getting pulled over.    

Timing Your New Coverage with State Farm Cancellation 

One of the biggest mistakes drivers can make when switching auto carriers is mistiming the transition and ending up without coverage temporarily. It's called a "coverage gap." Driving without insurance, even for a day, can be disastrous financially and legally -- there's no good reason to take that risk. 

Avoid the coverage gap by starting up your new policy the day before you terminate your State Farm auto policy. 

Cancelling State Farm FAQs

You might be inclined to call up State Farm right now, just to see if Jake is around to process your auto policy cancellation. But shop around and get your replacement coverage in place first -- that'll save you some back and forth, and keep you protected at the same time.