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How to cancel your renters insurance policy
If you don’t need your renters insurance policy anymore, either because you found a new provider or you just don’t need the coverage anymore, you can cancel it in just a few steps.
Before you begin
First, read the cancellation terms on your existing policy and visit your insurer’s website to make sure there aren’t any penalties (i.e. cancelation fees) you don’t know about.
Once you’re ready, there are several different ways you can cancel your policy:
- By using your insurer’s website or mobile app
- Over the phone
- By mailing a letter
- In person
Some companies (like Lemonade) encourage you to use their mobile app, but more traditional insurers still prefer you call and speak to an agent. Your insurer will indicate which method they prefer on their website.
Canceling your renters insurance in five steps
Regardless of what method you use, these are the steps you need to take when you cancel your policy:
- Contact your insurer: Using one of the options above, contact your insurer and let them know you want to cancel your policy.
- Provide your name, policy number, and contact information: Unsurprisingly, your provider will need these details before they can make any changes to your policy.
- Specify the date that you want your policy to end: Many insurers require at least 30 days of notice, so read your policy terms before you specify the final day of coverage. If you’re switching to a new provider, you should schedule your current policy to end after your new one kicks in.
- Provide any additional documentation your insurer asks for: At this point, your insurer might ask you to send them a signed letter to complete your request, or to send them additional information in another form. Provide whatever they ask for.
- Confirm your mailing address and bank account details to receive a refund: If you’re entitled to receive a refund for your unused premiums, your provider might need your bank info to send you a direct deposit. They also might send you a refund check through the mail.
After canceling your policy, watch your mail for any cancellation documents your insurance company indicated they’d send. Once you receive those, you’re done!
Can you cancel your renters insurance at any time?
Yes, you can cancel your renters insurance at any time. If you cancel it early, you may be eligible for a refund on your unused premiums, but you might also have to pay a penalty fee.
Canceling your policy early: refunds and penalties
Canceling your renters insurance policy can both save and cost you money, depending on the refunds and penalties that apply.
Potential refunds for canceling a renters insurance policy
When you cancel your renters insurance, you’re eligible for a refund if you paid for coverage in advance.
Your insurer will refund your unearned premiums — the money that you paid for coverage that you haven’t received yet — via check or direct deposit. (If the term “unearned premiums” is a bit confusing, note that when insurers say “unearned,” they mean that they haven’t earned those premiums yet. In other words, it’s money that you’re entitled to get back.)
Each insurance provider has its own refund policy, so you should check your policy terms to see what kind of refund you’re entitled to.
Penalties for canceling a renters insurance policy
Some insurers (although not all) will charge you a penalty fee for canceling your renters insurance policy early.
The penalty might be a fixed amount, or might depend on how much time you had left in your policy’s term. In either case, because renters insurance is so cheap, the penalty will probably also be small.
Again, each insurance provider is different, so you should check your policy or speak to an insurance agent to find out if there’s a penalty and if so, how much it is.
What to consider before canceling your policy
Before you cancel your policy, you should ask yourself a few questions to make sure you’re not making a mistake.
Is renters insurance required by your landlord?
Before you cancel your renters insurance, check your lease. If your landlord requires you to have renters insurance, you shouldn’t cancel your policy. Doing so might give your landlord the right to fine or evict you.
If you plan on moving, you should cancel your policy after you leave so you don’t breach your agreement with your landlord.
Will you really save money by canceling?
Like we said, when you cancel, you might have to pay a cancellation fee, and although you’ll be reimbursed for your unearned premiums, you won’t get back your earned premiums (payments that you already received the coverage for). Double-check that canceling will really save you money.
Consider adjusting your policy instead of canceling it
If you’re unhappy with your current policy, try reviewing and adjusting it before you decide to cancel it altogether. You can adjust your coverage by:
- Changing your renters insurance deductible
- Adjusting how much coverage you have
- Expanding your coverage with an addition called a rider
You should review your policy every once in a while to make sure your coverage keeps up with the inevitable changes in your life as you accumulate more property.
What are the risks of not having renters insurance?
Canceling your renters insurance is risky unless you plan on switching to a new policy right away.
Canceling your policy leaves you vulnerable to unavoidable expenses
When you cancel your policy, you’re particularly vulnerable to financial risk from personal liability expenses (i.e. your legal fees if you accidentally hurt someone or damage their property) and loss-of-use expenses (the cost of your hotel stay if you have to evacuate your home for any reason).
The key thing to note is that, unlike the cost of repairing damage to your personal property, neither of those expenses is avoidable. If a burglar steals your TV, you can simply elect not to replace it — and if you’re like a lot of us, cutting down on the TV time might actually do you some good.
On the other hand, if you’re held liable for someone’s injury, you have to pay their medical bills, and if you’re forced out of your home by a disaster, you have to find another place to stay. Renters insurance helps protect you from unavoidable expenses like that.
For more information, read our guide on whether you need renters insurance.
When should you cancel your renters insurance policy?
There are a few circumstances when canceling your renters insurance policy makes sense:
When you want to change insurance providers
It’s sometimes worth switching to a different insurance company that offers lower premiums or better coverage. Doing so requires canceling your existing policy.
Make sure your new policy will kick in before your chosen cancellation date to avoid having gaps in coverage.
Carefully compare the two policies before switching
Before you purchase a new policy, read it carefully to make sure switching is worth it.
Switching policies to save a few dollars isn’t worth it if it means the quality of your coverage will suffer, or if the difference in cost will be outweighed by your cancellation fees.
When you move to a new state that your insurer doesn’t cover
Some insurance companies offer coverage in some states and not others. When you move to a state that your insurer doesn’t cover, you don’t really have a choice — instead of transferring your renters insurance policy, you have to cancel it and buy a new one from another provider.
Once again, you shouldn’t cancel your old policy until you get a new one. A short overlap in policies is much better than leaving yourself exposed to risks. (Note that renters insurance covers moving, so even if your old policy doesn’t cover your new state, it might cover your property while you’re transporting it there.)
When you move in with a spouse or your parents
If you’re moving in with a family member (like your parents or spouse), you might be covered under their renters or homeowners insurance policy, in which case you won’t need your own anymore.
Before you commit to this, check the coverage you get under their insurance plan. If you’re not satisfied with it, it makes more sense to maintain your own policy.
When you buy a house or condo
When you become a homeowner (instead of a tenant), it’s time to ditch your renters insurance policy and buy homeowners insurance instead. Feel free to pat yourself on the back for reaching this milestone.
Like we keep saying, always purchase your new policy first, before canceling your old one.
When should you adjust your policy instead of canceling it?
Sometimes it’s better to adjust your existing policy or transfer your renters insurance to a new address instead of canceling it outright.
When you need to save money
If your circumstances have changed and you can’t afford to pay your premiums, you can adjust your insurance policy to fit your budget. In the long run, this is a smarter financial decision than canceling it outright.
Alternatives to canceling your policy
- Adjust your coverage: Opting for less personal property and liability coverage will lower your monthly premiums. However, we don’t advise choosing an amount that’s lower than the value of your belongings. Figure out how much renters insurance you need and buy exactly that, but no more.
- Adjust the deductible: You can always save money on your policy by increasing your deductible (the amount you pay out of pocket when you file a claim). Agreeing to pay a higher deductible lowers your monthly premiums because it means your insurance company is taking on less risk.
- Adjust your payment terms: Ask your provider whether you can qualify for any discounts by changing the way you pay. Many companies offer discounts for paying your premiums upfront in one lump sum instead of on a monthly basis, or by paying via electronic funds transfer (EFT) directly from your checking account instead of a credit card transaction.
When you move to a new address or state that your insurer covers
When you move, you can transfer your policy with you instead of canceling it, as long as your insurance company provides coverage in your new location. Taking your policy with you is a lot less hassle than buying a new one, and it saves you from paying cancellation fees.
Before moving, contact your insurer and tell them your new address. For better or worse, your policy terms and monthly premiums might change based on where you’re going.
If you’re moving to a safer neighborhood or city (i.e. one with a lower crime rate or better weather), you can ask your insurer for a discount. On the other hand, if you’re moving to a more dangerous area, be prepared for your premiums to go up.
When you move in with a roommate
Renters insurance doesn’t cover roommates by default. You can add your roommate to your policy by naming them as an additional insured, but this comes with significant downsides, and we recommend maintaining separate policies instead of sharing one.
When you move, take inventory of your possessions and make note of any items that you buy for your new house or apartment. Keep track of who pays for what.
If you end up significantly contributing to the cost of any valuable items (such as an expensive couch that you plan on placing in a common area), contact your insurer and ask them how they handle shared property and see if you need to adjust your plan to fully cover your new belongings.