In this article, I will explain how you can cancel a motor insurance policy. Is it really possible to do it? Would you really get a refund after the cancellation of your policy? After reading this article, you will get all the answers.
There are certain situations where you can cancel a motor insurance policy and get a refund also. However, there are some conditions and It is not so simple every time. If you have a two wheeler, car, etc, by law, it is mandatory that you have a motor insurance policy.
Having a motor insurance policy in India is a must. You can’t drive motor vehicles on Indian roads without valid insurance. If you will drive without a valid motor insurance policy then you may face heavy penalties.
Before you apply to cancel your motor insurance, you should analyze all the facts and figures. There may be many reasons to cancel a motor insurance policy and you must have a valid reason to cancel your insurance policy.
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Steps to Cancel Motor Insurance Policy
The process to cancel a motor insurance policy is almost the same for all insurance companies. Although, processes and documentation may vary in different insurance companies. Some companies want physical documentation and signature.
However, many companies may have an online cancellation process also. You can send an email to your insurance company to cancel the policy. But all steps of cancellations are required either you cancel offline or online. generally, here are the steps to cancel a motor insurance policy:
1- Inform your Insurance Company
The first step is to intimate to your insurer that you want to cancel a motor insurance policy. The company would like to know why you want to cancel it. Even you also have any confusion regarding cancellation then you can ask them.
Normally, the company takes 7 to 15 days time to cancel the policy. If you have finalized that you want to cancel the policy, it is better to inform your insurer on time.
2- Submit the Request Letter and Documents
Based on your decision the company will ask you to submit a written request letter and some required documents. Normally, you have to submit a current insurance policy, a request letter with a valid reason, and KYC documents to cancel a motor insurance policy.
The insurance company may ask for a canceled cheque or bank account proof also. Try to submit all the documents in one go. So that your policy cancellation may process smoothly.
3- Alternate Policy and Approval
After submission of all the document company will verify them and process the cancellation. The company may take more than one week to cancel the policy. First of all, the company will approve the cancellation.
On case to case basis company may ask you to submit an alternate insurance policy. For example, you are not satisfied with the company and you want to purchase a policy from another insurer.
In this case, the company may not cancel your policy without submitting the replacement policy. Motor insurance policy is mandatory in India and any insurer may not cancel the policy without getting an alternate policy.
4- Cancellation and Refund
After verifying and completing all the required processes, the company will cancel your motor insurance policy. The company will refund you the amount on the basis of certain parameters and calculations. Normally you will get a refund for the balance tenure of the insurance policy or according to the refund structure.
Before you cancel a motor insurance policy, you can contact your insurance company and understand the complete details like documentation, process, refund, etc. So that you do complete the process smoothly and get your refund without any problem. You can also take the help of your insurance agent.
Reasons to Cancel a Motor Insurance Policy
There may be multiple reasons to cancel a motor insurance policy. Some of the reasons might be like below:
Dissatisfaction with the current insurance company: Maybe you have purchased a motor insurance policy from a company. But due to some reason, you are not satisfied with the company. Maybe the features and benefits or services of the company are not satisfactory to you. In this case, you can cancel the policy and switch to another.
By Mistake you have purchased the wrong policy: Yes, It is also possible that you have purchased the wrong policy. For example, you wanted to purchase a policy for your A car but by mistake you purchased one for your B car.
There may be many other reasons also to cancel a motor insurance policy. It totally depends on the situation. You can cancel your policy as per your requirement. It may be before the risk start date or after the risk start date of the policy. The reason should be valid and right.
If you cancel a motor insurance policy before the risk start date then possible you get a full refund of the policy. But when you cancel after the risk start date of the policy then there may be a deduction of a certain amount. Normally you will get a refund on a pro-rata basis.
Consequences after Cancellation of Motor Insurance Policy
Make sure you have purchased an alternate insurance policy on cancellation. If you are driving your vehicle without an insurance policy then you may face many problems. You may have to pay heavy fines because driving without a motor insurance policy is a punishable offense. To know more about Motor Vehicle Act 1988, you can visit the official site of Parivahan
If you damage a third person or third person’s property with your car then you may face legal liability and or financial liability for a third party. If your car is damaged in an accident or theft vehicle then you may face financial loss.
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