You can cancel your car insurance at any moment, all that is needed is that you would have to submit the replacement papers to the car insurance company. Does the policyholder have to pay any charges for the car insurance cancellation depends on when the policyholder wants to cancel it? If one does it during the insurance term the car insurer would charge a minimal amount, cancellation of the policy at any other time remaining premium money would be reimbursed.
Basics of Car Insurance:
As per the current regulations, it is mandatory to have car insurance for every car, so wherever you decide to cancel your car insurance the insurance company needs to be informed about the new car insurance policy. It is necessary that the current car insurer is informed for the cancellation process to be continued.
A cooling-off period of 14 days is provided by the car insurer to the policyholder. During this period he/she can take up a policy from another car insurance company. This period begins on the day you buy your policy.
If the cancellation demand has not been raised during the 14 days then the insurance company levies charges. Delaying by a month can lead to 10% extra charge and a delay of 2 months could result in 20% charge being levied.
After a period of 8 months the car insurance company is not liable for any refund.
One can place a cancellation request over the phone, mail or by submitting the cancellation form and the notification would be sent in a week’s time.
Consequences of Not Purchasing a New Car Insurance Policy after Cancellation:
As has been mentioned before it is mandatory that the car can be driven only with a valid car insurance cover in place. Car insurance provides financial cover to the policyholder in event of an accident or damage to the policyholder. Third party Insurance covers you from any damages caused to any third person. However, in the event where one does not have a new car insurance policy in place after he/she has canceled the former, the person would have to face following consequences.
Person would be fined for driving without car insurance
No cover would be available to the person in case of an accident and also the third party damages cover would not be available to the person.
One might have to pay a higher premium amount.
Possible Reasons for Car Policy Cancellations
You Want to Sell Old Car: When you want to sell the old car and buy a new one, in this case, you would definitely go for cancellation of old policy and go for buying a new one.
Your Car Has Got Stolen: In this case, you would definitely have to apply for a new car insurance policy for your new car. If the current policy is a comprehensive policy then Insured Declared Value would be given to the policyholder. Cancellation request can be placed after the policyholder gets the sum assured or the claim amount.
You are not happy with Current Car Insurance Company: Although not a common cause which can range from high premiums and less sum assured, strict renewal policy etc. You might want to opt for a new car insurance company.
Traveling Abroad: If you are on a long-term deputation abroad and your family doesn’t need the car, you might end up canceling your insurance policy.
Process of Cancelling Your Car Insurance Policy:
a. Update your Car Insurance Company Immediately:
You would be needed to inform the car insurance company on an immediate basis or whenever you decide to cancel the policy. It would allow the insurance company to start the cancellation process and to take up the formalities.
b. Follow the Guidelines Laid down by Your Insurer:
The process varies from insurer to insurer. As a part of the process, your signature would be required on cancellation or the declaration documents giving approval for policy cancellation. Companies can do so through E-mail or Phone or Post from the policyholder. After this policyholder would receive a cancellation letter from policyholder stating the amount that is due.
c. Ask for Your Car Insurance Certificate:
You must always ask for car insurance policy papers which you had submitted at the time of cancellation of the policy as it would be needed when you would be buying a new car and also to avail the No Claim Bonus.
d, Check for the Refund Status before the Culmination of Policy:
Before the policy lapses, it is recommended that the policyholder asks for a refund from the insurance company. If the premium has been already paid, the car insurance company is liable to pay you the refund. Ensure that the money is deposited directly to the bank account.
So, if you have decided to go ahead with the cancellation of your car insurance policy and want to opt for a new one or get a better deal from a competitor, you need to consider the cancellation process and the requirements as have been discussed above. Alternatively, you can get in touch with Landmark Insurance Brokers Pvt Ltd for help on buying and renewal of car insurance policies.