Cancellation

Cancellation refers to the termination of an auto insurance policy before its scheduled end date, initiated either by the insured or the carrier. An insured may cancel at any time by providing written notice; the carrier then issues a pro-rated refund for unused premium, minus any short-rate fee some non-standard carriers charge. A carrier may cancel a policy mid-term only for specific reasons allowed by Texas Insurance Code §551.104: nonpayment of premium, a fraudulent claim, or suspension or revocation of the driver license of the named insured or another regular driver in the household. A cancellation for these reasons cannot take effect until the 10th day after the carrier mails written notice. After the first 60 days of a new policy, Texas law restricts carrier-initiated cancellations more strictly. For SR-22 drivers, cancellation automatically triggers an SR-26 filing with DPS, which suspends driving privileges until a new SR-22 is filed — though the two-year SR-22 period stays anchored to the conviction date and does not reset.