Should you cancel car insurance if your car is totaled?

Answer 1

If you are speaking of collision insurance, the insurer will pay the actual cash value of the vehicle less the deductible. You may negotiate with the insurer over whether you, or it, keeps the salvage (the remains of the car), and its value.

The policy may remain in force until the end of its term. If you get a new car to replace the old, the existing policy may cover it. However, the premium may change to account for differences between the old and new vehicle that are material to the premium calculation.

If you are speaking only of liability coverage and do not intend to replace the car, you may want to convert to a "non-owner's" policy. This provides coverage for you regardless of the car that you are driving.