Securing your car with a car insurance policy is necessary as it provides cover for the damages caused to the vehicle due to a mishap. However, it may be possible that you may not be happy with your car insurance provider for various reasons such as dissatisfaction with the insurer, better discounts offered by another insurer, etc. If that’s the case, then you can cancel your car insurance policy with the current insurer and replace it with a new car insurance policy from a different insurer. Failure to replace the cancelled policy with a new one can lead to penalty as well as leave you unprotected against third-party liabilities.
Before learning about the cancellation of a car insurance policy, it is important to understand the need for a car insurance policy. Listed below are the reasons for having a car insurance policy:
Now that you are aware of the benefits and importance of having a car insurance policy, it is also important to know another aspect of the policy which is the cancellation of car insurance. Cancellation of the policy may be because you are not satisfied with the service provided by the insurer, car is stolen (in the case of a comprehensive car insurance policy, you can make a claim before cancelling it), selling your car, upgrading to a new model, etc. The insurer cannot deny if you want to cancel the policy. However, few insurers prefer that the cancelled car insurance policy be replaced with a new one for the cancellation process to be considered as complete.
If you are buying a car insurance policy for the first time, the insurer provides 14 days cooling-off period. If within this period, you wish to cancel the policy you can do so. However, if the cancellation is done post this period, the insurer will charge a nominal fee for the same. If the policy exceeds 8 months, then on cancellation, the premium amount will not be refundable. It is better to inform the insurer that you intend to cancel the policy as and when you decide to do so, else the insurer will continue to send reminders of the policy renewal dates. If you do not respond then the policy may lapse which can become a problem when you decide to buy a new policy.
It is strongly advised that do not change the insurer because the other offer is cheaper. The decision to cancel your car insurance policy must be taken lightly, instead, it must be based on significant factors such as enhanced coverage, upgrading to a new model, selling the car, etc.
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