Things to Know Before Cancelling Car Insurance Policy
There may be hundred ways of fulfilling a job, but we can’t claim that all those ways are correct. Smart people find intelligent ways of performing a task and they fetch best results due to following a stipulated path. The best design gets the whopping result always! A systematic way of doing things has always got its own advantages over doing things in no particular order. Similarly, you do not buy an insurance policy from a street vendor! You should not close it mid- way either. Since your approach is civilized at the time of buying, it is always suggested to maintain the closure in a systematic way too. This will in turn fetch benefits for you! So, let’s understand the things to know before cancelling a car insurance policy.
It has become very simple to cancel an insurance policy these days! It is as easy as submitting replacement papers to keep the insurer informed. However, it is the time of cancellation request that decides whether you need to pay any charges or not. If the cancellation is in the insurance term, you will leave lightly as you may end up paying a nominal cost. If it were any other time, you may have to compensate the remaining premium.
- Since it is compulsory to get your car insured, it is similarly essential to inform the insurer before cancelling the policy.
- Your insurer provides you a grace period of 2 weeks for cancellation of your policy
- If you fail to inform your insurer about the cancellation in the grace period, you are liable to be penalized with a stipulated amount for delay and it increases with time.
- In case if the insurer is uninformed for a period of 8 months, your insurer is not liable for a refund
- It is simple to cancel your policy. An email, a phone call or a signed document denying continuation suffices it all.
Reasons to Cancel Car Insurance:
- Sale of your car
- Car theft
- Dissatisfaction with the insurance company
How to Cancel Car Insurance Policy?
Inform your insurance company at the earliest:
The foremost thing to know before cancelling a car insurance policy is informing the insurance company about your decision to quit. It will allow them to initiate the cancellation process and to take care of the required formalities in the earliest possible time. This will enable you to get your car insured immediately with a new policy.
Your insurer will guide you through the cancellation:
The cancellation process will differ from insurer to insurer. Your insurance company may ask you to sign the cancellation papers or the cancellation declaration papers during the cancellation procedures for an official approval from you for cancellation. The mode of communication can be through an email or a letter from the insured. Post this, the policy holder gets a cancellation letter from the respective insurance company inclusive of the details of the refundable amounts.
Seek the car insurance certificate:
It is quintessential to ask the insurance company to return the policy papers which you have submitted for a cancellation request. This becomes a vital document in case you want to purchase a new policy to prove your history in order to avail the no claim bonus and hence, an important thing to know before cancelling a car insurance policy.
Ensure you got the refund before conclusion:
Insurance experts always suggest the policy holders to get the refund from their insurance company before the policy expires. The insurance company with which your policy existed is bound to pay you the refund had you paid the yearly insurance premium. However, the insurance company will not refund the amount in the event of a sudden death of the policy holder or if the policy comes to a closure due to certain unexpected calamities. It is the policy holder’s responsibility to make sure that he/she gets the refund amount into their respective bank accounts.
Get a new policy instantly:
Get into an attempt to buy a new car insurance policy at the earliest once the cancellation process is over if you do not want to get affected due to penalizing. In case your vehicle is stolen or is hit in an accident, you may end up bearing higher premiums for the delay in purchasing a new policy. So, it is not worth delaying.
This is yet another element one has to take care of while cancelling an insurance policy. No claim bonus retention is an add-on element which draws attention of many prospective policy buyers. Due to this, add-on claims made by the policy holder under a particular circumstance (pre- defined limit) do not attempt to change the NCB bonus there by allowing the policy holder to take the benefit of full discount on the yearly premium. Hence NCB retention is an exceptional idea to exercise claims by having the no claim bonus unchanged.
As stated earlier, it is important to close a task in an appropriate way to prevent tedious procedures or unnecessary expenditures later. If a policy holder wants to get rid of his/her insurance policy, it is nothing criminal and should not leave the policy in between being in a misconception that the policy would automatically get cancelled if he stops paying insurance premiums. It is not the reality and in fact, you may end up paying unnecessary penalties. If you want to find a better policy, consider cancelling the old policy as per the norms and get to know the things before cancelling your car insurance policy.