Do you feel like you will have been stuck with your car insurance for the rest of your life? Nope! It doesn’t work that way. You can cancel your car insurance any time you want, and no, it doesn’t make you a bad person if you’re not satisfied with your existing car insurance. There can be many reasons for your dissatisfaction with your car insurance policy. For example, the low return of the plan, higher premium, migration or movement to another place, separation with a spouse, the sale of the car, poor customer service, or simply because you want to try another insurance company.
Generally, people like to cancel their policies either at the time of renewal or by the midterm. But, truth be told, if you’re going to cancel your insurance, you don’t need to wait till the time of renewal. Cancelling it midterm is a lot easier and cheaper than cancelling it at the time of renewal. There! We said it.
To cancel your car insurance, all you have to do is send a notice to your insurance agent in black and white and voila!! You have it withdrawn. However, you have paid premiums, and you are concerned about them for the right reasons. So here are your options:
Get a Refund on Up-front Payment:
Upon cancelling car insurance, if you have paid your premium lump sum or upfront; then most insurance companies refund the unused amount of the premium you have paid. You will get the money back for the services you did not receive. Typically, the timing of cancellation of policy decides the amount of refund you are going to get, and normally this refund amount is based on the time you were insured minus the amount you paid.
Cancellation of Payment on Periodic Installments:
However, if instead of paying lump sum amount, you have been paying for your car insurance in periodic installments, then you can opt out from paying by giving a notice in writing. By doing this, the insurance company will not debit your account any further. However, if you give your cancellation notice too close to the next payment, then it might not take effect, and your account will be debited for the next installment regardless. But, you will get your refund once the procedure of insurance revocation has started.
Although you will get a refund of the amount you have paid for car insurance, don’t be surprised if you don’t get a full refund. You may incur some administrative or service charges. Your insurance company may also throw in an early cancellation fine (sounds unfair, right? But that’s how it works). However, these deductions will not be made if the terms and conditions you agreed to did not mention any such thing.
While withdrawing from your car insurance, you must carefully understand all the pros and cons of your insurance policy. You should cancel your car insurance policy only if you are getting a new plan immediately or you have no plan of keeping a car. If your new car insurance policy charges you less, but does not give complete coverage for car; there is no point in switching to a new policy.