How to Cancel Your Car Insurance in Canada
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You probably know this, but you need car insurance to drive a car in Canada. However, there are situations where cancelling your car insurance is a good decision. If you get a better offer from another insurer, you could cancel your current car insurance and change insurers. Other situations are also valid, such as selling your car or moving to another province. This article explains how and when to cancel your car insurance.
When Should You Cancel Your Car Insurance?
First of all, you should know that you can cancel your car insurance at any time, for any reason. However, make sure you understand your insurer’s cancellation policy. Take note of the following points when reading the conditions and special clauses of your insurance contract.
Termination on Expiry Date (Non-Renewal)
The best time to cancel your car insurance is at renewal, as you will not have to pay cancellation or administration fees. Also, it’s the ideal time to compare car insurance quotes online or contact an insurance broker like ClicAssure.
Termination During the Term of the Contract
On the other hand, cancelling your car insurance during the term of your contract may entail penalties and other charges. Penalty fees vary from one insurer to another. Read the terms and conditions of your insurance contract before making any decisions. If you had paid your car insurance premium for the year in one instalment, you should be entitled to a refund.
How Do I Cancel My Car Insurance?
To avoid any problems, you must cancel your car insurance by following these steps:
- When you renew your insurance policy, you’ll receive a written notice from your insurer informing you of the expiry date. This notice will be sent to you at least 30 days before renewal.
- Compare car insurance quotes online or contact an insurance broker like ClicAssure to choose a new insurer. As this is a process that can take time, do your research before you cancel your car insurance.
- Contact your insurer and inquire about the requirements to cancel your car insurance policy, such as penalties or fees to pay. These are also mentioned in the clauses of your insurance contract.
- Inform your insurer that you are cancelling your insurance policy. Some insurers may require a written notice, such as a letter of cancellation. In addition, it is essential that you note the termination date of your insurance policy. Ensure there is no gap during the change and that your new car insurance policy has been activated.
- Ask your insurer to refund the difference if you had made a full premium payment for the year.
- Ask your insurer for written confirmation of your cancellation to make the transaction official and keep a record of it in your files.
Things to Consider Before Cancelling Your Car Insurance Policy
If you’re comparing car insurance and find a better deal with another provider, keep in mind that switching insurance isn’t always the best option. Consider the following before making any changes.
Penalties and Cancellation Fees
You may have to pay cancellation and administration fees if you decide to cancel your car insurance during the term of your contract. These fees are determined by the terms and conditions of your contract.
Administration Fees
You may have to pay an administration fee when you take out a new insurance policy. This is not always the case, but it is a common practice with insurance brokers.
Loss of Discounts
When changing insurers, one thing that is often overlooked is discounts or rebates. For example, discounts for certain professional associations or discounts when you combine your home and car insurance. Cancelling your car insurance could mean an increase in your home insurance premium.
Policy’s Grace Period
In some cases, you can cancel your car insurance at no charge. For example, the right of cancellation, also known as the grace period, allows you to cancel your insurance policy without penalty. Generally, this grace period varies between 10 and 15 days following the effective date of your insurance policy.
To see how much money you can save with a new car insurance policy, use our tool to compare car insurance. You can also contact a damage insurance broker like ClicAssure. When comparing quotes, make sure to compare the same type of car insurance: collision insurance, comprehensive insurance, etc.
Can You Cancel Car Insurance on a Financed Car?
Lenders usually require you to take out collision car insurance or comprehensive insurance for a financed car. Depreciation is an important part of a car’s value, meaning that your car will be worth less than you owe in a year. So, if you’re involved in an accident, your insurer will pay the actual value, which won’t cover the cost of the car loan if the car is a total loss.
In short, you cannot cancel your car insurance in this case. Talk to your current insurer or an insurance broker to find out which type of car insurance best suits your needs.
Bottom Line
In short, you can cancel your car insurance at any time. However, you may have to pay a penalty or cancellation fee if you cancel your insurance during the term of the contract instead of waiting for renewal. Contact your insurance company and use our car insurance comparison tool to find the best car insurance for your needs.
Frequently Asked Questions About Car Insurance
Can I cancel my car insurance before renewal?
Yes, you can cancel your car insurance before your next renewal. Contact your insurer and find out about the requirements for cancelling your car insurance policy, such as penalties and other fees. Some insurers may require a written notice, such as a letter of cancellation.
Is it possible to cancel a car insurance policy during the term of the contract?
Yes. However, you will probably have to pay fees or penalties. Consult the conditions of your car insurance contract or contact your insurance company for more information.
How do I cancel a car insurance policy?
Call your insurance company to inform them of your decision. In some cases, you will need to send a written notice. Make a note of the termination date of your insurance policy and ensure that your new car insurance policy has been activated, if applicable.
Can I cancel my car insurance at any time?
Yes, you can cancel your car insurance at any time. However, you may have to pay a penalty if you cancel your insurance during the term of the contract.
