Many Canadians research insurance, looking for rates that are more affordable and provide better coverage than what they currently have. While you may be able to cancel your insurance policy, did you ever ask yourself: Can your insurer cancel your policy? The short answer is, yes, but with good reason. To help make sure you never get caught without insurance, here are six reasons why your insurer can do so.

1. Being late (or not paying) your monthly premium

Most often times, your insurer may cancel your policy due to paying your monthly premiums late or failing to pay them altogether. For a variety of reasons, a payment can be missed. As a result, this should be addressed right away. Whether your provider contacts you or you notice the missed payment afterwards, address the issue immediately. Sometimes, when paying other bills or moving money between accounts, it can be easy to overlook a payment. A quick phone call to your isure broker can generally resolve the issue without coverage interruption. Along with payment of the outstanding balance, you may have to pay any overdue fees. Even one late payment, whether intentional or not, can cause your insurer to raise your rates or choose not to renew you.

Tips to avoid cancellation for non-payment:

  • Pay the full annual premium upfront
  • Set monthly payment reminders on your cellphone
  • Set-up auto payments from your bank account or credit card
  • Ensure there is enough of a buffer in your account
  • Change your withdrawal date to align it with your payday
  • Ask isure to shop around and explore options to lower your costs

Did you know? Most insurance companies offer discounts of up to 10% for paying your premium, in-full, each year?

2. Non-disclosure or misrepresentation (intentional or accidental)

The reasons insurers may cancel you policy can vary. Perhaps the most serious is if you knowingly lie on your application in order to secure the policy or get a lower premium. Failing to be completely accurate when setting up your insurance is a serious issue. Misleading information can have an impact on your coverage as a result. Stating your home will be your primary residence, but you instead intend on using it as a rental property, can result in the cancellation of your home insurance. However, it is less of a concern if you mistakenly report the year your home as having new windows installed to be 2014, not 2010.

3. Not using insurance claim money to fix damages

When property damage happens, filing a claim is the next step. Once you file the claim, usually you are awarded money to make repairs. If, however, you spend that money on something else, you insurer may cancel you insurance. In most cases, you need to provide proof that the repairs have been completed. You can send in photos of the repairs or provide contractor invoices. If an insurer finds out that you used the money for something unrelated or that you have submitted false invoices, they can cancel the policy entirely.

4. You’re no longer eligible under your existing policy

One way your home insurance can be cancelled is if your risks change. If your existing policy covers your home as your primary residence, but you decide to open a home-based business, you may be increasing your insurance risk. Operating a company, like an in-house daycare or a bed-and-breakfast, can dramatically change your liability. This can then mean you’re no longer eligible for coverage under your existing home insurance policy. To make sure you don’t unexpectedly find yourself without coverage, be sure to check with your insurer before you put any entrepreneurial plans into action.

Did you know that not properly cancelling your home insurance could impact securing a mortgage? Home insurance is a necessary financing condition, and in certain situations, you may not be able to get a mortgage if you can’t obtain home insurance.

5. Switching providers without notifying your insurer

If you decide to get home insurance somewhere else, it’s in your best interest to let your current provider know as soon as possible, especially before your policy renewal. Most insurers automatically renew policy for your protection so that there are no gaps in coverage. Although you are offered better rates somewhere else, the onus is on you to notify your insurer or isure broker. You are still under contract until you notify them. If you decide to place your policy somewhere else or you no longer require insurance, get in touch with your provider right away.

Quick tip: Once you speak to your insurer about cancelling your policy, request that they confirm the cancellation in writing.

6. Your insurer decides not to renew your policy

Can your insurer cancel your policy if it stops servicing a particular region or stops offering a particular line of business? The answer is yes. This is called “no-renew”, whereby the insurer will send out a notice to you stating that they are no longer offering a particular service. Insurance companies, at times, change their portfolio to best service the needs of their customer and to be fiscally responsible to its shareholders. Fortunately, this one won’t leave a stain on your record, since it has nothing to do with negligence on your part.

7. Timeframe for cancellations/non-renewals

Your insurance provider cannot cancel your policy more than 60 days after it was purchased. That is, unless you fail to pay your premium, have committed fraud and/or seriously misrepresented yourself in the application. If your provider does cancel your policy, there are specific timelines they’ll need to follow:


Your insurance company must send you written notice 15 days prior to cancelling or notify you in person. When they send you a written notice, it is to be sent by registered mail. It will be sent by mail only to your last address, as per your policy. Your 15-day notice period begins the day after that letter arrives at the post office for delivery.


Your insurer will send a notice of non-renewal 30 days before the expiration date. In all cases, you only pay for the period during which your insurance policy was in force. The insurer will have to reimburse you for any overpayment of premium.

Consequences of cancellations 

  • Trouble finding an insurer
  • Premium increase
  • Reduction in coverage

In the end, it is best to always be upfront and communicate with your insurance provider or isure broker. We hoped we answered the question; “Can your insurer cancel your policy?” that many of our clients have asked us before: However, many of the reasons insurers may cancel your policy can be easily avoided. Be sure to update them with any changes that may affect the risk quoted on your original policy. Contact one of our isure representatives when it’s time to renew your policy.

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