Canadians have undergone a lot of changes over the past few years. Most of us have been sent home to work due to the pandemic, and then many of us chose to stay at home to cut down on our commute. With a decrease in travel time, you may be thinking about whether you still need a car as much as you did before. It’s important to always explore your options before considering cancelling your insurance. Be sure to weigh up your situation carefully, and work with your isure broker to get a better understanding of your options. Both will help you by explaining savings options to address where you can lower your expenses. If you decide to cancel your car insurance policy, you can utilize the steps below to successfully do so. In addition, we provide answers to some of the common questions surrounding cancelling your insurance.

6 steps to cancel your insurance policy

According to, if you choose to call your insurer or broker to cancel your policy by phone, it’s usually effective immediately. However, make sure that you ask for confirmation and written notice to prevent any fees or complications in the future. They also recommend following these six steps to cancelling your policy:

  1. Call your insurance company: Let your current insurer know you want to cancel. Otherwise, you might keep getting bills in the mail.
  2. Ask about cancellation requirements: Talk to an isure broker to find out the right steps. While the process of cancelling varies by company, most require you to provide an insurance cancellation letter.

If you are switching insurers, it is always a good idea to provide them with a cancellation letter, even if they do not require one. It is helpful to have a record of the date you request cancellation.

  1. Ask about fees and refunds: Some companies offer a pro-rated refund on paid premiums, and a few will charge a fee for cancelling. To learn more about whether you are eligible for a pro-rated refund, please click here.
  2. Let your bank know: If you have a car loan, you might need to tell your bank or the owner of your loan that you’re switching policies.
  3. Cancel automatic payments: While your insurer should stop automatic premium withdrawals after they process your cancellation, you can also cancel payments from your account just to be sure you don’t get hit with any extra charges.
  4. Have your new insurance ready: If you intend to continue driving your car, have your new insurance policy lined up before cancelling in order to avoid a lapse in coverage.

Important: Make sure there isn’t a gap in your insurance coverage when switching insurers. The last thing you want to find out is that your new one is not yet active. If there is a gap, you should never drive without insurance. If caught, you face fines and serious penalties if you happen to get into an accident.

What information do I need to cancel my policy?

  • Policy number
  • Personal information, including name, date of birth and Social Insurance Number (SIN)
  • Your new insurance details, including provider, policy number and effective date
  • Proof of plate forfeiture or bill of sale if you’re getting rid of your car

How to cancel your car insurance policy

The first step in cancelling your car insurance is to inform your isure 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 cancelling your car insurance

What about when you want to sell your car, but you’re only halfway through your car insurance policy’s year-long coverage? Are you able to get your money back if you paid for your protection upfront?

The good news is yes. However, your insurer is entitled to cancellation fees. A refund on premiums for midterm policy cancellations are calculated on a ‘Short-Rate Cancellation’ fee basis (vs. a ‘Prorata Cancellation fee basis). This will vary, depending upon how much is paid previously and how long the car insurance policy is active.

If I’m selling my car, when should I cancel my car insurance?

If you’re selling your car and not replacing it, you should cancel your insurance effective the date of sale. Don’t cancel your policy before the sale happens because if damages occur and aren’t 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’m 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. This means you don’t have to cancel and take out a new policy.

Changing the policy may include an additional premium to reflect any additional risk or cost associated with your new car. However, this is likely cheaper than cancelling and taking out a new policy. Ensure that you 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 have a claim on the policy. However, it’s a requirement 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 a surprise of a higher car insurance rate than your quote, or worse, being cancelled for non-disclosure by your new insurer.

Can I cancel if I pay for my insurance monthly?

With car insurance, many people choose to spread the cost by paying monthly. However, merely cancelling payment through your bank account or credit card doesn’t mean your car insurance policy is as well. Inform your isure broker or insurer that you want to cancel, and get written confirmation from them, otherwise. They might chase you for premium payments that you still owe. You also risk having a claim against your credit history, so make sure you are all paid up with your car insurance company before you cancel.

What if my insurer 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 improves, 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 and get professional advice from our isure brokers before cancelling

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 or understanding your options will end up costing you money. That’s why it’s important to have an independent insurance broker like isure at your side!

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