A Guide to Cancel your Car Insurance Policy

Car insurance is a necessary for responsible vehicle owners, providing protection and financial security in case of unfortunate incidents, damages or losses. However, in some circumstances, the policyholders might have to cancel their car insurance plan. And, when it comes to the cancellation of a car insurance policy, it's a straightforward process. Continue reading to find out! 

Why Cancel Car Insurance Policy?

There are various reasons for which you might have to cancel your car insurance policy. Some of these are as follows: 

• When you are planning to sell the car
• Switching from your current insurance company to another due to certain reasons
• If you chose the wrong insurance policy by mistake and want to buy a new one again. 

Policyholders can cancel the insurance policy on their own but need to know the proper procedure required by their insurance company, as each insurer has a different cancellation procedure, and some may even charge a cancellation fee as well. 

Ways to Cancel Car Insurance Policy

Here are the ways in which you can cancel your car insurance policy:

1. Contact your insurance agent: The basic and easiest way to cancel your car insurance is to get in touch with your insurance service provider or agent. Connect with them on call, explain your intention to discontinue your motor insurance. Keep your relevant details, such as your policy number, effective date, and valid reasons for cancellation. You can talk to your agent to get a lower price on your current policy with some discounts if you have prepaid your charges or by making changes in your coverage limits that reduce your premium value.
2. Mail or fax a signed cancellation request: When communicating with your insurance provider, always keep in mind to keep the conversation in writing as well. A document with your full name, policy number and the effective date from which you would like to end your coverage should be mailed or sent via fax to initiate a smooth cancellation process.
3. Assistance from your new service provider- If one of the reasons to cancel your car insurance is that you are switching to a new service provider, the easiest way to cancel your insurance policy would be to get assistance from your new insurance provider. Your new agent would require only your old policy number, the dates, and your signatures on the cancellation form to send the same to your old insurer.
4. Get the certificate of insurance- Once your insurance policy is cancelled, make sure to take your certificate stating the details of your cancelled policy along with the accumulated No claim bonus till cancellation. This certificate will help you in claiming your NCB at the time of purchase of your new insurance policy.
5. Return your old documents, if any- There are times when many insurance providers must have given you specific documents like insurance cards or license plates. For a smooth cancellation process and to avoid penalties, make sure to inquire if you need to return these documents or not to ensure a hassle-free process.
6. Cancel road tax if in case it has been renewed- It is important to ensure that you have cancelled your road tax before proceeding with insurance cancellation. After receiving verification, visit any insurance company branch to cancel the insurance policy as the final step.
7. Claim a premium refund- Please know that you might be eligible to receive a premium if you are cancelling the plan during mid-term. The insurance company would refund the premium either in your bank account or issue a cheque in your name.

Note- Please keep in mind that just because your Car Insurance premium calculator is easy, opting out of it is not a viable option as it can put you at risk. It's always the safest option to initiate new insurance coverage prior to cancellation if you still plan to own a car. Maintaining coverage will help you avoid paying high costs out of your pocket at the time of any unfortunate incidents.  

Conclusion

Lastly, while cancelling your car policy can be easy, it should be taken forward with utmost care as it is a legal obligation. While there are legitimate reasons for cancellation, it is important to follow a proper procedure to ensure that it is done correctly and as per the regulations. This may involve talking to your current service provider, necessary documents and insurance certificate.  

However, it is not advisable to cancel your policy before getting a new one, as it exposes you to financial risks or burdens that may come up due to any losses or damage. 

Frequently Asked Questions

1. Is there any refund after the cancellation of the policy? 

If you cancel your car insurer's policy before the end of your current term, you'll get a refund for the remaining period. If you have paid in full already and cancel after this time, there will not be a refund for what remains of the cover. 

2. Will I have to cancel my current policy if I move to another state?

In most cases, you don't need to cancel your policy. This is because many of the top car insurance renewal companies in India offer coverage across state borders. You may be able to stay insured under your current carrier even if you are planning for new coverage.

3. Can I cancel some benefits without cancelling the entire auto policy?

Yes, it is absolutely possible. To save money, dropping expensive coverages such as collision and comprehensive after they pay off their vehicle is common.  

4. Do I need to do something specific to cancel if my car insurance company drops my coverage?

If your insurance company stopped providing coverage for you, this means your current policy has been cancelled. All you will have to do is find a new insurer and make sure they cover the types of vehicles you own.

5. Does car insurance have a cooling-off period?

Yes – all car insurance policies have a cooling-off period, and it starts the moment you buy the policy and lasts for 21 days.  If you change your mind within that time, you can cancel your policy, and if you haven't made a claim, you can take all your money back.