Disregarding Car Insurance is becoming more common. There are cancellations that are motivated by the loss or sale of the vehicle, but most of the times 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 contracting 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 receipt of the Insurance, but it is a mistake. The truth is that unsubscribing from Car Insurance can be more complicated than expected if we don't do things right.

D evolving the receipt of the Insurance 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 by not having communicated in time and form our intention not to renew the Insurance.

To avoid these situations, today we are going to analyze how to cancel a car policy . For this, we will not go into the motivations that can lead us to change Insurance , although we will analyze the reasons why it is necessary to cancel the Insurance in an appropriate way. In this sense, it is essential to understand how the renewal of Car Insurance works and its validity .

 

When insuring a vehicle, we sign a contract by which the insurer agrees 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 policy must include the duration of the contract and that its renewal will occur automatically on the expiration date, in terms not exceeding one year.

Generally, the validity of the Auto 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 note that, if it is annual, when paying the premium, the Auto Insurance coverage is contracted for the whole year. Although most insurers offer the possibility of paying the premium in several installments, the Insurance's payment facilities do not affect the duration of the contract : coverage is signed throughout the year, even if the premium is paid in 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 premium payment. That is why it is important not to confuse the expiration date of the Insurance with that of the 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.

 

If a client wishes to cancel Car Insurance, the easiest way to do so is by requesting non-renewal of the policy. However, you do not have to wait for the end of contract date to do so, but you must notify it before. Specifically, one month before the expiration date.

 

Until 2016, the Law required the policyholder of a Car to notify him of his decision not to renew the policy two months before expiration. This term is the same as that required by the insurer to report any change in the policy.

However, it was excessive for users to have to notify the cancellation as soon as possible. Finally, the rule changed and as of January 1, 2016, it is no longer necessary to communicate the non-renewal of the Insurance so far in advance.

With the regulatory change, the period 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.

Thus, in order to cancel Car Insurance, it is necessary to notify the company at least 30 days before the expiration date of the policy. Thus, you can change the Insurance of your Car 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.

Thus, 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 within a period of at least one month in advance of the end of the current insurance period when the person who opposes the extension is the policyholder, and two months when he is the insurer ”.

Once the non-renewal of the policy has been communicated within the period established by the Law, the other party may not object.

 

In addition to meeting the times, shapes are also important. For this reason, the decision not to continue with the Car Insurance must be communicated to the insurer in writing and it is convenient that it be made by some means that reflects the notification, such as a burofax or a registered letter. In this way, the request for non-renewal is recorded .

 

If we choose to use postal mail, it is advisable to send a certified letter with acknowledgment of receipt to the current insurer in which we inform you of our decision to cancel 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 details and expiration date
  • Insurance policyholder data
  • Notification of the decision not to renew the policy

 

Insurers increasingly use online or telephone channels to communicate with their clients. That is why it is not strange that the Insurance company refers us to an online or telephone channel to process the cancellation of the Insurance.

In these cases, it is important to require that, when canceling the policy by telephone or through a website, the insurer send the client a written confirmation of non-renewal, by email or fax, to avoid possible errors and misunderstandings. .

 

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 giving them an order not to pay more for the Insurance, we get them to not charge us the following receipt. In this way, we avoid possible errors in the collection of the Insurance .

However, if an inopportune receipt is erroneously loaded after having followed all the steps to cancel the policy, the insurer is obliged to return that money to the customer. For this, you only have to contact your Insurance brokerage and explain the error. They will mediate for your client and will contact the insurer to reimburse the receipt without further problems.

 

As we have already pointed out, it is an error to stop paying the receipt of the Car Insurance in order to cancel the policy. A practice that can cause problems for the insured, especially if partial premium payments are no longer paid 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.

Ultimately, choosing to return the policy receipt is not a good idea and to finish convincing you, we already tell you more about the consequences of not paying the car policy .

 

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 there must be a series of requirements.

One of the cases in which it is possible to cancel the Insurance without deadlines 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 terminate 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 implies the cancellation of the Insurance.

Instead, the silence of the clients is usually taken as the acceptance of the new conditions, with the consequent automatic renewal of the updated Insurance.

 

Another occasion to cancel Car Insurance may arise when the insured risk is reduced . In this situation, the client has to report the risk reduction and the insurer must lower the price of the premium. And if it does not, the policyholder may cancel the contract in the following 15 days.

 

Another moment in which a user can cancel the Insurance of his Automobile without taking into account terms or renewals can appear in the case of the Insurances online or that are contracted by phone.

By contracting Car Insurance online , the user is entitled to a trial period of 14 calendar days, in which they can terminate the contract without penalty.

In these cases, it is enough to contact the insurer and communicate it to them by means of a letter or a burofax, which allows to record that you have notified the cancellation.

 

Another reason to cancel Car Insurance is that the insured decides to sell it or cancel it. In this post about the steps to follow to cancel a car , in addition to explaining the process we will tell you what happens to the policy in this situation.

 In these cases, insurers do not usually return the premium “not consumed”, although they offer alternatives such as the possibility of freezing the policy for a period of time, in order to transfer it to a new vehicle in the event that the insured decides to replace his old car for another.

Of course, depending on the characteristics of the new car, the conditions and the price of the Insurance may vary.