There are a number of reasons why one could want to cancel their car insurance. To do that, one needs to submit the replacement papers to the insurance company. However, a number of questions arise in this regard, like whether one has to pay any cancellation charges for the car. If one is cancelling the insurance during the term, then the car insurer will charge a small amount and the remaining premium money is reimbursed.
However, it is important to know about the basics of Car Insurance Policy:
- According to the present regulations, it is compulsory to have car insurance for every car. So, if you are canceling your existing policy, your insurance company will have to be notified about the new policy. The current car insurer will have to be informed to go ahead with the cancellation process.
- There is a 14 day period provided by the car insurer to the policyholder during which he or she can take up a policy from another car insurance company and this begins on the day of buying the new policy.
- If the demand for the cancellation is not raised in these 14 days, the charges are levied. A month’s delay can lead to a 10% extra charge while a delay of 2 months will result in 20% charge. After 8 months, the car insurance company will not provide any refund.
It is easy to place a request for cancellation over the phone, by sending an email of filing up a cancellation form.
Like mentioned earlier, every car needs to have a car insurance policy so in case you cancel a previous insurance, you need to get a new one in its place and if not, certain penalties have to be paid.
- A person will be fined for driving a car without insurance.
- The person will get no cover in case of an accident and third party damages will also not be available for the person.
- Higher premium amounts have to be paid.
Top 4 Reasons for Cancellation of Car Insurance Policy:
- One could want to sell an old car and get a new one and in that the old policy has to be cancelled as well.
- In case the car has been stolen, a new insurance policy has to be applied for. In case one had a comprehensive policy, the according to the Insured Declared Value of the car, the amount would be paid to the policyholder. The cancellation request can be placed once the sum assured has been paid.
- It could just be that one is not happy with the current car insurance policy and it could be because this policy had high premiums, strict renewal policy etc and you are looking for an alternative.
- In case of staying abroad, it could be that one does not need the car back home for the period of stay and so the policy could be cancelled.