If you find yourself in a position where you need to cancel your car insurance policy, you’re probably wondering where you begin and what steps you need to take. Every company has its own cancellation policy, and you want to make sure the whole process runs smoothly.
After all, you don’t want to get caught up on any hidden fees, and you definitely don’t want to keep paying your premiums when you’ve thought you cancelled it properly. Today, we’re going to detail absolutely everything you need to know to get the policy cancelled correctly.
Why would you cancel your car insurance policy?
There are many reasons why you might find yourself in the position of cancelling car insurance policy, so if you match any of the points below, you’ll know this article is for you:
- Unable to afford current car insurance premiums
- Found a car insurance deal for a better price
- You’re getting rid of the car, i.e. selling, scrapping
- You’ve had a bad experience with your current insurer and want to switch
How to cancel your car insurance policy in Canada?
Ready to make the change by cancelling car insurance early? Here we go! While each insurance provider will have their own cancellation policy terms and conditions, there are some standard points to ensure the cancellation process is completed correctly.
Before you start, make sure you have your policy documents with you, or at least your policy number, so the provider can find the exact policy you want to cancel.
There are multiple ways you can choose when learning how to cancel insurance, the most common being:
- By phone: By far the quickest way to cancel your insurance policy is to do it over the phone. Simply call up your provider on the enquiries or customer support number they offer, follow the menu instructions until you’re through to an advisor, and they’ll be able to talk you through the process. This is known as the quickest way because it usually results in instant cancellation, and you’ll receive all the cancellation documents and confirmations to your email address, or via post, depending on which option you declare best for you.
- By post or by email: If you opt to proceed with the cancellation of insurance policy via post or email, you’ll need to wait until your request is processed, which can take between 5 and 14 working days.
You’re only allowed to cancel an insurance policy if you’re the policyholder. If you’re a named driver, you won’t be able to cancel the policy, nor can you cancel anyone’s policy for them by calling up. You need to be the policyholder!
In some cases, the provider may ask why you’re choosing to cancel your policy, and it’s okay to be honest here. If you’ve found a better, more affordable provider, they may even try to offer you a better deal which means you could save even more money!
Regardless of how you cancelled your car insurance policy, you’ll be notified by your provider beforehand on any insurance cancellation fees or admin fees you may need to pay during the process, and whether you’ll receive a refund on any premium values you have outstanding.
Again, whether you’re paying fees or receiving a refund will depend on the terms and conditions of your provider.
What do I need to when cancelling insurance policy?
Finally, you may need to fill out some documentation, just to confirm your cancellation. This could be signing a cancellation form (online or via post), and you may need to send your certificate of motor insurance to your provider; although this is rare these days since everything is processed digitally.
When cancelling your insurance policy by post, you’ll want to send a letter that covers all the basic details you’ll need to share with your provider, so you don’t waste time and your policy is cancelled quickly.
In your letter, you’ll need to include information such as:
- Your first name and surname
- The name of your insurance provider you’re contacting
- Your insurance provider’s address
- Your policy number, written out in full
- Your written signature at the end
- Your full address and phone number (in case a reply is needed)
By including a letter with all this information, you should find there are no problems with missing information and your policy will be able to be cancelled with ease.
Can I cancel my car insurance policy any time?
Well, it depends. This is a commonly asked question, but will vary depending on your provider, and how long you’ve had the policy.
Cancelling your car insurance at renewal
This is the best time to cancel your car insurance! You won't have to pay administrative fees or whatever, you can compare car insurance quotes.
Cancelling car insurance during the term
When cancelling during the term, you may have to pay car insurance fees. It depends on the provider, but it can be low or quite expensive, check on your policy what it is indicated about car insurance fees.
How will I be refunded if I cancel my car insurance?
Usually you will get a pro-rated cancellation. Means that If you paid a lump sum for an annual policy, this should be refunded, minus any days you’ve already been insured for. If you’ve been insured ten days and you cancel your policy, you’ll receive the full amount back, minus ten days.
Can I cancel my car insurance if I made a claim?
Even if you’ve made a claim on your policy, you should still be able to cancel car insurance policy at any time. It depends on the provider. However, depending on the terms and conditions of your insurance provider, you may be asked to pay the full price of the policy. Always check the terms and conditions of your policy by reading your documentation, or call up and ask a customer service representative.
If you do need to pay your premium in full after making a claim, this will mean you won’t be entitled to a refund on your policy, and even if you’re paying monthly, you may be required to pay the full year’s worth of premium during cancellation.
Alternatives to cancelling your car insurance
If the main reason you’re cancelling your car insurance policy is due to your current policy premiums being too high, you may want to take steps to reduce your premium costs before you take the plunge and cancel your policy outright. Here are some tips you can follow:
- Find a cheaper car insurance policy and switch to a new provider
- Tell your car insurance company you found a better deal and see if they’ll match it
- Change your renewal date so you get more time to get money to pay your premiums
- Turn off auto-renew policies so you have time to research the best price for you
- Downgrade your car to a smaller, less expensive vehicle
- Work on improving your driving record
- Maybe you can also drop some coverage that you no longer need. If you have an old car for example, maybe you don't need to have collision coverage. Or if you don't drive that much, maybe you should consider taking just the minimum for third-party liability coverage. In Quebec, the mandatory amount for third party liability is $50,000 and for the other provinces it is $200,000.
- Change the legal car ownership and become a named driver.