Insuring your car against theft and untoward accidents is the biggest investment decision that you may make after you have bought your car. However, there may come situations where you may be tempted to cancel your insurance policy. Cancelling the car insurance policy is a bad decision and you should think twice before considering it.
Many people consider car insurance policy as a dispensable expense, but it should not be the case. In reality, cancelling your car insurance policy could put more pressure on your pocket than you may think. It not only protects you from huge costs on car repairs but also provides peace of mind in case of hospitalization expenses. Hence, we recommend the buyers not to cancel their policy and keep it active.
When can you cancel the car insurance policy?
There are certain scenarios where you cannot resist cancelling the insurance policy like
1 - The demise of the car owner
2 - If the car is stolen
3 – If you are unsatisfied with the insurance company’s services
4 - When you plan to relocate, or
5 - If you intend to sell the car
The good news is that for all these circumstances, you have the option to transfer the existing insurance policy to the new owner. You can still opt to cancel the policy under these scenarios. If you follow the option of going for a policy cancellation, you are eligible for the refund with a condition that the policy has not been elapsed. While the law mandates that this is plausible, there are certain factors you need to consider when you put the decision to effect.
Rules and regulations that you need to remember before cancelling car insurance policy
Cancelling the car insurance policy can’t be a sudden decision. These car insurance companies provide a free look in period within which the customer is entitled to return or cancel the insurance policy for free. The minimum time period is 14 days but it may change depending upon the terms and conditions laid down by the insurer.
Once the minimum look in period is completed, the insurer will charge you a certain percentage of premiums depending upon the past months. The percentage can vary from 10% for the first month, 20% for the second month. The older the insurance policy, the higher are the cancellation charges.
Once you have decided to cancel the car insurance policy it becomes important to intimate them with the help of an e-mail. The insurer will then ask you to comply with the documentation to take the cancellation process ahead.
Since the car insurance is compulsory by law, your current insurer might ask you to submit the replacement policy. Upon successful processing, you’ll get intimation for the same. The company will adjust the insurance premium and refund the remaining amount.
To wrap up things, it can be viable for you to cancel your policy only if it falls under certain conditions like long term deputation to another city or theft. But outside of these reasons, it will be wise to continue with your policy and not cancel the same. As it is, you or the new owner will not be able to ply the vehicle on road if it doesn’t carry an active and valid policy.