You may need to end your current car insurance policy for some reason, and now you’re wondering, “What happens if you cancel your car insurance?” Technically speaking, ending your car insurance plan will rid you of having to pay premiums every month.
This may sound like a load of savings, but it also means removing any sort of protection you have on your vehicle and the people driving and riding in it. It may also result in legal issues, as every car owner in Canada is legally mandated to have a car insurance policy. So, as long as you have a car, you must have insurance; if you’re ending your existing plan, you must have another one ready to take its place.
Why Cancel Car Insurance
There are several reasons why you may want to cancel your car insurance. Some common instances that would possibly necessitate it include:
- Unsatisfactory service: When your provider doesn’t deliver on their promises and you’re looking for better services
- New vehicle: When you get rid of your old vehicle for a new one (though you may also just update your policy in this instance)
- Upgraded plan: When you want to change your car insurance policy to have more coverage
- Selling a car: When you sell your car and will no longer have ownership of the vehicle (the new owner must then take out a policy for the car in this case)
- Breach of contract: When you or your provider ends your contract due to a breach, which may include the incurrence of tickets, mishandling of the vehicle, etc.
How to Cancel Car Insurance
You can cancel your car insurance by getting in touch with your insurance agent or service provider. Before you do, though, take a look at your contract to check if there are any important steps you need to follow or conditions you need to fulfil; you’ll also want to check if there are any penalties that you may have to deal with by cancelling your plan.
After checking your contract and ironing out the details with your insurance provider, all you have to do is sign the papers stating that you’re ending your policy.
When to Cancel Car Insurance
While you can cancel your car insurance anytime, it’s best to do it at the end of your contract term. This saves you some money because most companies don’t charge cancellation fees during this period. If you cancel in the middle of your term, you may have to pay penalties, which will depend on factors like the time remaining on your policy, remaining payments, and your insurer’s rating policy.
Remember to Abide By Car Insurance Laws
When cancelling your car insurance, be sure to have another coverage plan in place (if you still possess a vehicle) to abide by Canadian laws. You should also check with local regulations to ensure the plan that you have complies with the minimum local requirements.
