HOW TO CANCEL YOUR CAR INSURANCE
The first step in canceling your car insurance is to inform your insurance broker or insurance company. If you cancel car insurance before the start of your policy, any premium paid will be refunded. If you are past the start date of your policy, your insurance company will charge you for every day your car was insured (or ‘time on risk’), plus an admin fee.
WHAT TO EXPECT WHEN CANCELING CAR INSURANCE
What about when you want to sell your car, but you’re only halfway through your car insurance policy’s year-long cover? Are you able to get your money back if you paid for your protection upfront?
The good news is yes. You can cancel it and you will receive come off your insurance premiums back.
The bad news is that your insurer is entitled to cancellation fees. Refunded premiums for midterm policy cancellations are calculated on a ‘Short-Rate Cancelation’ fee basis (vs. a ‘Prorata Cancelation fee basis), and will vary depending upon how much you paid previously and how long you’ve had your car insurance policy.
WHEN SHOULD I CANCEL MY CAR INSURANCE COVERAGE IF I’M SELLING MY CAR?
If you’re selling your car and not replacing it, you should cancel your insurance effective the date you sell your car. Don’t cancel your policy before the sale happens because if something happens to your car and it is not fixed, the buyer will probably not buy. Also, you cannot transfer your car insurance to the new owner. They will need to arrange their policy effective on the date they buy the car.
WHAT HAPPENS IF I AM REPLACING MY CAR?
If you’re going to replace your old car, most insurance brokers and insurers will update your policy to cover the new vehicle, meaning you don’t have to cancel and take out a new one.
Changing the policy may include an additional premium to reflect any added risk or cost associated with your new car. However, this is likely cheaper than canceling and taking out a new policy. Ensure that before you cancel, to calculate the costs and compare all your options before you decide. You can check out our Cancellation Calculator for help!
CAN I CANCEL MY CAR INSURANCE IF I’VE MADE A CLAIM?
You can cancel your car insurance even if you’ve claimed the policy. However, you will be required to pay the total policy premium through to the cancellation date plus an additional fee (if applicable). Remember that a claim can affect your new policy, so it is important to ensure that you disclose ALL claims on your new car insurance application. You do not want to be surprised with a high car insurance rate than quoted, or worse, being canceled for Non-Disclosure by your new insurer.
CAN I CANCEL IF I PAY FOR MY CAR INSURANCE MONTHLY?
With car insurance, many people choose to spread the cost by paying monthly. However, merely canceling payment through your bank account or credit card doesn’t mean you’ve canceled your car insurance policy. Inform your insurance broker or insurer that you want to cancel and get written confirmation from them, otherwise; they might chase you for unpaid premiums. You also risk having a claim against your credit history, so make sure you are all paid up with your car insurance company when you cancel.
WHAT IF MY INSURANCE COMPANY CANCELS MY INSURANCE?
Sometimes, insurance companies may cancel your car insurance policy. Cancellation can occur before your renewal (known as a ‘non-renewal’). These typically occur because you no longer qualify for an insurance company due to tickets, claims, the vehicles, or their use. You may now find yourself in the high-risk car insurance market. A high-risk auto insurance specialist can help you. If your record has improved, you may find that you are non-renewed by a high-risk insurance company, and will need to arrange coverage through a standard car insurance company.
DON’T ASSUME. GET PROFESSIONAL ADVICE AND THE FACTS BEFORE YOU ACT.
Take the time to work out calculations before you cancel any policy. You never know when it might be better to wait until the insurance is up for renewal. It is important to review your policy with your insurance broker every year to ensure you have the best coverage and deal possible.
Navigating the world of Ontario car insurance can be tricky. Limiting yourself to one insurer, not having all the facts, and understanding your options will end up costing you money. That’s why it’s important to have an independent insurance broker like sure at your side.