Cancellation Process In Motor Insurance

Ranbir, a college student, enjoys watching horror TV shows and movies. One of his friends advised him to get a Netflix subscription because there are a lot of good horror shows and films available on Netflix. So, he signed up for a Netflix subscription few months ago.

His final examinations will begin in the next two months. In order to focus entirely on his studies, he decides to cancel his Netflix subscription. However, he is unable to cancel the subscription directly from the Netflix app. So, he searched online, and comes across various steps which he’ll need to follow to cancel the subscription. He follows all the steps, and his subscription finally got cancelled.

Similar to this, there are several steps involved to cancel a motor insurance policy. We’ll learn about these steps in detail in the later section of this article. First, let’s take a look at some of the reasons why you might want to cancel a motor insurance policy.
 

Reasons For Cancelling A Motor Insurance Policy

A motor insurance policy can be cancelled due to a variety of reasons. Here are some common ones -

• Selling The Car

  If you are thinking of selling your car and have no plans of buying a new one, you can cancel your motor insurance policy.

• Not Happy With The Current Insurer

  There might be a possibility that the benefits mentioned in the policy provided by the current insurer are not good enough, or you are not satisfied with the insurer’s service, etc. In such cases, you can cancel the policy with your current insurance company.

• The Car Is Too Old To Be Driven

  If you don't wish to drive your car any longer and is planning to dump it because it is old, you can cancel your motor insurance policy.

Now, let’s take a look at the cancellation procedure of a motor insurance policy.
 

Motor Insurance Cancellation Process

Here are the steps involved to cancelling a motor insurance policy -

• Step 1: Inform The Insurer

  Firstly, the policyholder needs to inform the insurance company about the decision regarding cancellation of existing policy along with a valid reason.

  You can inform the insurer about the policy cancellation by -

Sending an email to them, or

Calling them on their toll-free number.

• Step 2: Submit The Required Documents

  Next, depending upon your reason for cancelling the motor insurance policy, the insurance company will ask you to submit certain documents.

If the cancellation request is raised due to the car being sold, then you will have to submit the following documents -

1. Sales deed
2. Cancelled cheque (The cheque should be in the same name as the insured person in the policy.)
3. Any other documents as requested by the insurer.

If the cancellation request is raised due to dissatisfaction with the current insurer, then you will have to submit the following documents.

1. Policy copy
2. Cancelled cheque (The cheque should be in the same name as the insured person in the policy)
3. Any other documents as requested by the insurer.

If the cancellation request is raised for a car that has been scrapped because it was too old, then the following documents will have to be submitted.

1. Scrap letter
2. Cancelled cheque (The cheque should be in the same name as the insured person in the policy.)
3. Any other documents as requested by the insurer.

• Step 3: Refund Initiation

The insurance company will verify all the details and documents provided by you, and then they will initiate the refund (if any). Generally, the TAT (Turn Around Time), i.e., the timeline required by the insurer to process the refund is 15 working days. This TAT, however, may vary across different insurance companies.

Also, whether you’ll be refunded the full amount or not, will depend on when the motor insurance policy is cancelled.

• Cancellation Before The Policy Starts

If you cancel the policy immediately after purchasing it, i.e., before the policy term begins, then the insurer will refund the full amount. Some insurers may deduct administration charges - but that will be minimal.

• Cancellation After The Policy Starts

If the policy is cancelled after the policy term has begun, the insurance company will refund the amount on a pro-rata basis. Means that they will deduct a certain amount for the number of days the policy was active. The remaining amount will be credited to your bank account.

Please note that the documents required and the steps involved in cancellation of a motor insurance policy may vary across insurance companies. Ensure you ask your insurer about the cancellation process and get the list of documents you may need to submit before going ahead.

So, that is all about the cancellation procedure of a motor insurance policy. Make sure you follow all the steps carefully to avoid any problems during the cancellation process.