You have every right to initiate car insurance cancellation. You must bear in mind that it is legally mandatory to have a motor insurance policy. Otherwise, you might end up paying Rs 2000 to the traffic police!
That said, you can cancel your car insurance whenever you want.
Keep in mind that you will receive a refund only after you submit the new insurance policy to your insurer. Also, if you made a claim during the policy period, you won’t get a refund of the balance premium.
Also read: Now Delhi residents can choose any registration number for a new car
Car insurance policies are renewed yearly. You can decide if you want to continue with a policy or not. On the basis of the same, you can choose to cancel renewal.
Once you renew an insurance policy or buy a new one – you get 14 days to decide if you’re satisfied with the terms or not. If you make the cancellation request within 14 days, you get a full refund of the premium. Additionally, a month’s delay will result in levying of 10% charge on cancellation. After 2 months, a 20% charge will be levied.
If you choose to cancel after 8 months, no refund will be provided. You will end up paying an additional cancellation fee as per the terms of the insurer.
STEP 1: Place a request for policy cancellation via call, email or by visiting the insurer’s branch. Mention your reasons for cancellation. Give your policy details and submit the proof in support of your reason of policy cancellation.
STEP 2: You might have to submit a signed application for cancellation. Once you submit all the necessary documents for cancellation, your insurer will take 7 to 15 days to finalise it.
STEP 3: Next, your insurer will inform you about the terms of cancellation and if you’ll receive any refund. Check if your insurer has offered a refund on the time left in the policy. If you paid an annual premium and cancel the policy before it lapsed, you’ll get a refund.
STEP 4: Finally, don’t forget to ask your insurer to give the car insurance policy certificate. This will help you while buying a new policy and to get benefits from the ‘No Claim’ bonus.
It is mandatory to hold a car insurance policy. If you don’t have one, you might end up paying challan or personally pay for any injury caused to a third party in an accident. You might also end up paying a higher premium due to not having a policy.
Most of the car insurance companies charge a cancellation fee if you choose to cancel after the ‘free-look’ period. Usually, the amount of cancellation fee depends on the terms of the insurer.
You can avoid paying car insurance cancellation fee if you cancel within the free look period.
In order to cancel your car insurance policy, you may need to submit a letter to your insurance company. Moreover, your insurer or insurance agent will guide you on how to write the insurance cancellation letter.
As a policyholder, your rights are protected by the Insurance Regulatory & Development Authority of India (IRDAI). All insurance companies have a proper redressal system that can help you with your complaints. For any complaint regarding your car insurance or cancellation issues, you can contact the company directly via customer support.
Finally, you can escalate your complaint to the IRDA if you’re unsatisfied with the resolution provided by the insurance company.
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