How to Cancel Car Insurance PolicyPosted on: November 23, 2020, by : Rakesh Sashmal
Cars are important to us, they are essential for our daily commutes and they make some of the major purchases in our life. Hence, it is always advised to buy car insurance to add another layer of protection to your car and you in the event of a mishap. Moreover, having a third party insurance policy at least is now compulsory by law. However, there may be some cases in which you may need/want to cancel your current car insurance policy. In this article, we will tell you everything you need to know about it because your choice to cancel the policy should be as informed as when you purchase one.
What are the Reasons to Cancel Car Insurance?
The following are the scenarios in which you may want to cancel your car insurance:
- When you sell your car: If you plan to sell your car and not purchase a new one in the new future, you may choose to cancel the policy and take a refund.
- If your car gets stolen: In the event, your car gets stolen and is not found and you only have a third party insurance cover, you can place a cancellation request for the policy. However, if you have an own-damages cover, you can claim compensation. The amount of the claim will depend on the Insured Declared Value (IDV). Click here to know more about claim settlement.
- If your car has passed a certain age: If the car is old and you no longer want to drive it, it is advised to cancel the car insurance policy.
- If you want to shift your insurance company: In case you are unsatisfied with the service of the insurance policy or have some other issue you may want to change your current insurance policy for another company. Click here to know more about car insurance companies.
What is the Process of Cancelling a Car Insurance?
Follow the given the steps to cancel your car insurance:
Step 1: Contact your insurance company and inform them that you have chosen to cancel your car insurance policy. This can be done over a phone call or even an email and the insurance company will provide you with the specifications for the process.
Step 2: According to your reason for cancellation, the insurance company will ask for the documents that you must provide. If for example, you are selling the car, you will need a proof of the sale, i.e., the sale deed or a new policy if you choose to switch to a different insurance company.
Step 3: After the required documents have been provided, the insurance will complete the process. A copy of the policy with ‘cancelled’ mentioned on it will be sent to you. If there is any NCB applicable you will receive a certificate for it. Click here to read more about NCB in car insurance.
Every insurance company has slight variations in their cancellation process, however, the basics will remain the same. Moreover, some companies have also offered an online cancellation process or a self-cancellation process. You may also be eligible for some form of a refund, but this differs according to your specific situation.
What are the Different Scenarios in Which You Can Get A Refund?
The refund upon cancellation is determined both by the terms and conditions of your policy and the time in which you make the cancellation:
- If you cancel before the policy starts: In most of these cases, you will get back most of the money you paid for the purchase of the policy without the processing fee.
- If you cancel after the policy starts: In this scenario, the refund is determined on a pro-rata basis, as it did cover the car even if for a few days.