Can you cancel insurance coverage for an impounded car?

As far as your insurer is concerned, you may cancel your policy at any time.

If your vehicle is being financed, however, your lenderrequires that you maintain coverage for physical damage to the vehicle at all times. Many lenders will require you to immediately pay off a vehicle that has been impounded.


While your state has minimum requirements for liabilitycoverage, often you can surrender your registration or submit a non-use affidavit and drop your liability coverage for an out-of-use vehicle.