Canceling Car Insurance is becoming more and more common. There are cancellations that are motivated by the removal or sale of the vehicle, but most of the time it responds to a change of insurer. It is an upward trend, especially when we are looking for a better service or better prices to save when hiring a new policy. However, it is important to cancel the Insurance properly to avoid problems.
Many people think that to cancel the policy it is enough to stop paying the insurance receipt, but it is a mistake. The truth is that unsubscribing from Car Insurance can be more complicated than necessary if we don’t do things right.
Returning the insurance receipt without informing the insurance company is not the way to cancel the policy. In addition, it can be expensive because the insurer of the car with which we no longer want to continue can claim the full amount of the policy for not having communicated our intention not to renew the Insurance in due time and form.
To avoid these situations, today we are going to analyze how to cancel a car policy . For this, we are not going to go into the motivations that can lead us to change Insurance , although we will analyze the reasons why the Insurance must be canceled in an appropriate way. In this sense, it is essential to understand how the renewal of Car Insurance works and its validity .
The renewal of car insurance
When insuring a vehicle, we sign a contract by which the insurer undertakes to provide the coverage detailed in the policy for a period of time, which is usually one year, renewable.
The Insurance Contract Law 50/1980 determines that the duration of the contract must be included in the policy and that its renewal will take place automatically on the expiration date, in periods not exceeding one year.
Generally, the validity of the Automobile Insurance is annual and is extended every year, without the need for the client or the insurer to notify of this renewal.
It is important to point out that, if it is annual, when paying the premium, Car Insurance coverage is contracted for the entire year. Although most insurers offer the possibility of paying the premium in several installments, the payment facilities of the Insurance do not affect the duration of the contract : coverage is signed throughout the year, even if the premium is paid by quarters or semesters.
This question is relevant, since the expiration date of the Insurance is the one that appears in the policy. And not the next payment of the premium installment. That is why it is important not to confuse the expiration date of the Insurance with that of deferred payments.
It is the expiration date that we must take into account when canceling the Insurance, when requesting the non-renewal of the policy.
Cancel Car Insurance, step by step
If a client wishes to cancel the Car Insurance, the easiest way to do so is by requesting the non-renewal of the policy. However, it is not necessary to wait for the end of the contract date to do so, but it is necessary to notify it beforehand. Specifically, one month before the expiration date.
When do you have to notify the non-renewal of Car Insurance?
Until 2016, the Law required the policyholder of a Car Insurance to notify of their decision not to renew the policy two months before expiration. This period is the same as the insurer is required to communicate any change in the policy.
However, for users it was excessive to have to communicate the cancellation so soon. Finally, the rule changed and as of January 1, 2016 it is no longer necessary to notify the non-renewal of the Insurance so far in advance.
With the regulatory change, the term to notify our insurer that we do not want to continue with them was reduced to one month, so that the policy can be canceled.
In this way, to cancel the Car Insurance it is necessary to notify the company at least 30 days before the expiration date of the policy. Thus, you can change your Car Insurance without further problems.
By the way, the insurer can also refuse to extend this contract, although in his case he has to notify his client with two months of margin.
In this way, article 22 of the Insurance Contract Law, which is the one that regulates the terms of these communications, establishes that “the parties may oppose the extension of the contract by means of a written notification to the other party, made with a term at least one month in advance of the conclusion of the current insurance period when the person who opposes the extension is the policyholder, and two months when it is the insurer”.
Once the non-renewal of the policy has been communicated within the term established by Law, the other party may not object.
How to communicate the non-renewal of the policy
In addition to meeting the times, the forms are also important. Therefore, the decision not to continue with the Car Insurance must be communicated to the insurer in writing and it is convenient that it be done by some means that reflects the notification, such as a burofax or a certified letter. In this way, the request for non-renewal is recorded .
Notification of cancellation of Insurance by letter
If we choose to use the post, it is advisable to send a registered letter with acknowledgment of receipt to the current insurer in which we communicate our decision to cancel the Car Insurance.
The letter in which we notify the insurer that we will not renew the Insurance must include some essential information so that it can process the cancellation of the policy:
- Name and address of the insurance company
- Insurance policy data and expiration date
- Insurance policyholder data
- Notification of the decision not to renew the policy
Notification of insurance cancellation online or by phone
Insurers are increasingly turning to online or telephone channels to communicate with their customers. That is why it is not strange that the Insurance company sends us to an online or telephone channel to process the cancellation of the Insurance.
In these cases, it is important to demand that, when canceling the policy by phone or through a web page, the insurer sends the client a written confirmation of non-renewal, by email or fax, to avoid possible errors and misunderstandings. .
Avoid errors in insurance collection
Once we have notified the insurance company of our decision, it is recommended to communicate the decision to the bank where the premium payment is domiciled.
By ordering them not to pay more for the Insurance, we get them not to charge us for the next bill. In this way, we avoid possible errors in the collection of the Insurance .
However, if an untimely receipt is charged by mistake after having followed all the steps to cancel the policy, the insurer is obliged to return that money to the client. To do this, all you have to do is contact your insurance broker and explain the error to them. They will mediate for their client and contact the insurer so that they can refund the receipt without further problems.
What not to do when canceling Car Insurance
As we have already pointed out, it is a mistake to stop paying the Car Insurance receipt in order to cancel the policy. A practice that can cause problems for the insured, especially if they stop paying the partial installments of the premium to change insurance.
In these cases, the insurer has the right to claim from its client the amount committed for the renewal of the policy and has a period of six months to do so. The user may also enter a list of defaulters for failing to pay the Insurance.
Can Car Insurance be canceled after the deadline?
As we have seen, the non-renewal of the policy is the most common way to cancel an Insurance. But in the case of automobile policies, it is possible to cancel the Insurance without waiting for its expiration, although a series of requirements must be met.
If the insurer changes the policy, we can change the Insurance
One of the cases in which it is possible to cancel the Insurance without terms is that the insurer modifies the conditions of the contract. The insurer must inform its clients when there are changes in the price or coverage of the contract, and if the changes in prices and coverage do not convince the insured, it can rescind the policy.
The policyholder has a period of 15 days to accept or reject these changes, counting from the receipt of the proposal. The rejection of the changes must be communicated to the company and supposes the cancellation of the Insurance.
On the other hand, the silence of the clients is usually taken as acceptance of the new conditions, with the consequent automatic renewal of the updated Insurance.
If the insured risk is reduced, the policy can also be canceled
Another occasion to cancel the Car Insurance can be presented when the insured risk is reduced . In this situation, the client has to communicate the risk reduction and the insurer must lower the price of the premium. And if she does not, the policyholder may cancel the contract in the following 15 days.
Trial period in Car Insurance online or by phone
Another time in which a user can cancel their Automobile Insurance without taking into account terms or renewals can occur in the case of online Insurance or that are contracted by phone.
When contracting Car Insurance online , the user has the right to a trial period of 14 calendar days, in which he can terminate the contract without penalty.
In these cases, it is enough to contact the insurer and communicate it by means of a letter or a burofax, which allows to record that you have made the notification of the cancellation.