Canceling your car insurance shouldn’t be a problem as long as you do it the right way. However, if you do not carry out all the procedures well, or take into account some conditions, your insurer may put obstacles when it comes to canceling your policy. In this article, we will tell you how to cancel car insurance in great detail. What to consider when canceling car insurance
If you want to cancel your car insurance you have to take into account two aspects such as when you want to cancel it and how you have to do it.
The term to cancel the insurance
The first is: when to do it? The main thing that you have to know in this case is that you must notify the insurance company at least 30 days in advance of the expiration date of your policy. Otherwise, the policy will be renewed automatically and you will have to wait for the following year to change insurance. With the inconveniences that this can entail, especially if the policy has made you more expensive or you have found another that covers you better.
The procedure for canceling car insurance
This decision to cancel your car insurance must be notified to the company in writing. From Acierto.com we recommend that you send the notification to your insurer either by burofax, telegram, or by registered letter.
It is a safe way to do it and the request will be permanently recorded, although it is true that some insurers allow you to cancel the policy by phone or through the website. In this case, you should demand that the written confirmation be sent to you via email or fax, to avoid possible unforeseen events.
What the law says about canceling car insurance
All this is included in Article 22 of Law 50/1980 on the Insurance Contract and the amendments incorporated in Law 20/2015, on the management, supervision, and solvency of insurance and reinsurance entities.
It is important to know that car insurance is renewed automatically based on what is established in each contract. In this way, and as established by the regulations: All insurance policies are annual, and the duration of the “contract will be determined in the policy, which may not set a term of more than ten years.” Thus, “it may be established that it be extended one or more times for a period not exceeding one year each time.”
Regardless of the mode of payment (cash or installment), the desire to cancel insurance is subject to the regulations established by this law. Thus, “the parties may oppose the extension of the contract using a written notification to the other party, made with a period of at least one month in advance of the conclusion of the current insurance period when whoever opposes the extension he is the policyholder, and two months when he is the insurer “.
How to cancel your car insurance in advance
It may be the case that we want to cancel our car insurance before the expiration date of our policy, that is, without having to wait for it to end. In general, there are three reasons why you can cancel your car insurance before that date arrives:
If the insurer modifies the contract
If the insurer modifies the contract that was signed at first, it will allow you to cancel the car insurance in advance. That is if the insurer makes changes in the price of the insurance or modifies or eliminates any of the coverage initially included.
If your company makes any modification to the contract with which you do not agree, it is not necessary to notify your decision to unsubscribe 30 days in advance. The insurer is obliged to notify you of any type of change in your contract. At the time it does, you have up to 15 days from the moment you receive the notification to accept or reject the new contract.
That the driver reduces the risk
That as a driver the risk is reduced is another situation in which it is possible to cancel the car insurance in advance. We explain ourselves: each driver pays a different amount depending on the risk they have while driving. For example, a novice driver will pay more for his car insurance than a person with more experience behind the wheel.
Therefore, if there have been circumstances that have reduced the risk you have as a driver, the premium to be paid will be lower. You must notify your company of this and it will have to change the price of your insurance, reducing it if necessary.
In addition, the insurer must pay you the difference between the amount paid and the amount that you would have had to pay from the moment the risk reduction was notified. If the insurer ignores your request and when renewing the policy the price is not lower, you can cancel it in the following 15 days.
If you buy car insurance online
If you take out car insurance over the Internet, you have a period of 14 calendar days to cancel it. You must notify your insurer by registered letter or other support stating that the cancellation has been requested. The insurance company provided it is within the established 14-day period, may not impose financial penalties.
In general, if none of these conditions are met, and you want to cancel your policy before its expiration, the consequences will depend on the company with which you have contracted your policy.
Frequent mistakes when canceling or canceling your car insurance
One of the most repeated mistakes when canceling our car insurance is stopping paying the company’s bills. Many people believe that to stop paying the amount of the policy is the easiest way to cancel it. However, doing this assumes that the company can generally proceed to:
- Claim the amount to be owed judicially if necessary
- Include you on a list of defaulters.
In a case like this, the insurer will pass the receipt. If the bank returns it (because the client has decided that he does not want to continue paying for a policy), the insurance company will repeat the operation approximately fifteen days later. In some cases, insurers establish a period of up to 60 days for the customer to pay the bill. But, as we have said, it is only about certain cases. There are also companies that, when faced with this type of situation, notify their customers of the error via telephone or ordinary mail, to find a solution.
If you stop paying your insurance fee for any other reason (such as financial problems, for example), the insurance company may refuse to provide any service until the payment of the amount owed is made. In this case, if, for example, you suffered an accident on the road, your company could refuse to help you if you have not paid the full amount to pay. At the time the payment is made, all the coverages included would be applied again 24 hours after the payment of the money.
If you return the receipt to the bank, exempting you from paying it, the insurance company will notify the brokerage. The latter will inform you, in case there has been a problem or error (such as a change of address or bank account). In case the receipt is returned, the companies can take two positions.
The first, that the insurer sends the receipt to the corresponding brokerage, looking for the latter to try to collect it. Or the second, that the insurer itself claims the amount, cancel the fee or add you to a list of defaulters.
Common causes for which we cancel the policy
There are a series of common cases in which we want to cancel our car insurance. The most frequent is that we buy a new car or that we sell the old one. We describe each of them.
- 1. Buying a new car: In these cases, the insurance companies transfer the insurance from one car to another. Since the policies and their prices vary depending on the vehicle, the company proceeds to update the coverage for the new vehicle. Thus, the price of the premium can go up or down.
- 2. If we sell or cancel our car: Some companies offer the possibility of freezing the policy for a certain period, to transfer it to the new vehicle if the purchase is made. Thus, if the client does not buy a new car, or decides to take out a policy with another company, the first insurer will normally not return the amount already paid and the amount that remains to be paid.
What to do after canceling car insurance
Another question that you should know is how to act after canceling the car insurance or, better yet, while you are doing it. And it is none other than taking out new car insurance. Mainly because car insurance is mandatory (even if you don’t use the car and have it stopped on the street). Otherwise, you will be exposing yourself unnecessarily to many risks.
To get your new policy you can enter our comparator. In addition, if you still have the current car policy, we will help you cancel it. You will have the help of an expert advisor who will provide you with all the necessary documentation and will make it very easy for you. What are you waiting for? We call you without obligation.