How to Cancel an Insurance Policy – the Do’s and Don’ts
I want out! It has come time to cancel your insurance policy – how exactly is it done? Is it as complicated as the policy wordings? Well – No! It is actually pretty easy! Of course, it’s a simple conversation if you have an easy-going insurance broker, otherwise it might come with a bit of resistance. As a policy holder, you have the right to cancel, so here is some simple advice on what to do and what not to do when canceling your policy.
Cancellation of insurance policies is a fact of the insurance business and from time to time, clients will ask me to cancel their policies – sometimes due to the fact that I have found a better insurance solution for their needs, other times because the solution that worked at a certain point in time, is no longer working for them and yet other times because they don’t need coverage anymore.
First, you have to know that the regulations are stacked in your favour – For an insurance company to cancel your policy; they have to have registered letters giving ample notice that they are going to cancel the policy, reason and – if you owe money – a chance for you to pay it back and continue along on your merry way.
If you are going to cancel the policy, there are several ways to get it done. Here is an ideal way and a non-ideal way to cancel your policy:
As a consumer you can cancel a policy:
a) In writing – this is the absolute best way to cancel a policy (for you and your broker) – it should contain the following information:
- Insured’s name(s) – the name of the people that are insured under the policy
- The policy number – (may be different than the account number – depending on the company)
- The company that is insuring you
- The date you wish the policy cancelled
For example: In consideration of the return of unearned premium to follow if any, I hereby request cancellation of ABC Insurance Company Policy No. ABC1234 and any renewal thereof and hereby release the said Company from Month Day Year. Your name(s) would appear at the bottom of the letter underneath your signature(s). - All policy holder signatures – everyone listed on the policy needs to sign consent
b) Stop paying your premiums – Does the job but NOT A GOOD IDEA!
Your policy will be cancelled but the aftermath will be different for the type of policy that you have, for example:
- Auto & Home insurance – cancelled for non – payment: Not good at all to have on your record – may affect premiums in the future
- Business insurance – cancelled for non-payment – Would you do business with someone who doesn’t pay you – insurance companies don’t look too kindly on businesses that don’t pay their insurance bills – it is hassle they aren’t fond of.
- Life insurance – not paying your premiums is actually one of the few ways your “in-force” policy can be cancelled – still it is better to cancel in writing – it really gives you a chance to think about why you are cancelling and perhaps to speak to a representative to get advice.
One thing you definitely cannot do is request a change or cancellation of your policy(s) by leaving a message on your broker’s voicemail – they won’t accept it for several reasons including the fact that we cannot verify that it is indeed you that is leaving the message.
When cancelling your policy always ensure that coverage is in place first to replace the insurance policy that you are replacing (if you are replacing it). You definitely don’t want to be caught without coverage!
So remember, like anything else in life – put it in writing and send it via fax, mail, or email and make sure to get a delivery receipt. Make sure you address the notice to your broker and things should proceed smoothly.
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May 8th, 2008 at 10:49 am
You should also advise people to ask for the amount of any taxable gain on surrendering the policy and also the surrender charge before they cancel.
May 8th, 2008 at 1:42 pm
Thanks for the comment Sally – you are definately correct when it applies to certain life insurance products!
Every product has it’s own quirks and spins during the cancellation process – definately speak to you r broker about the effects of canceling and what to expect.
February 13th, 2010 at 8:44 pm
what happen if i cancel my policy and want to replace it after 3 months
February 17th, 2010 at 11:19 am
Hi Jameer,
The answer to that question depends on the type of insurance policy. A life insurance policy may be re-instated if the outstanding premiums are paid up and there has been no material change in risk (i would check with your advisor for company-specific rules). A home, a business or auto insurance policy will likely not be re-instated but you will have to be underwritten and a new policy would be issued (if you qualify).
March 20th, 2010 at 9:05 pm
Hi Claudio
If I cancel my car insurance before the term of the contract , is the insurance company entitled to charge me any cancellation fee ?
March 21st, 2010 at 10:48 am
Hi Samuel,
the insurance company is entitled to charge you cancellation based on their cancellation policy located within the policy documents. One of the things to ask when obtaining new quotes is to determine the company’s cancellation policy.
The cancellation will either be Short Rate or Pro-Rata… Basically, up to a certain point in the policy year, there is a fee charged for terminating, after about the halfway point, they only keep what they have earned
Hope this helps!!
March 24th, 2010 at 3:24 pm
I insured my car three weeks ago for three months term. if I can cancel the policy now, can I get back some money?
March 26th, 2010 at 8:08 pm
I would check your policy wording and speak to your broker.
April 13th, 2010 at 11:06 am
My house insurance just renewed…new higher monthly payments just started. If I cancel (due to a significantly lower rate) elsewhere, would I have to pay a penalty to cancel? Can they charge me for this as I have heard from a corporate insurance executive that they should release me without penalty.
April 13th, 2010 at 11:21 am
you should be able to cancel it “ab initio” from the onset. Just prove that coverage was in place elsewhere… there shouldn’t be a penalty
April 13th, 2010 at 12:15 pm
Thanks…but just to clarify, this is my existing company that just renewed my policy…and it has gone up every year for the last few years that I’ve been with them…no claims at all. I only have a quote from another company…no coverage elsewhere yet…but I can change that very quickly. Is it wise to do so…and do you think I’d still have to pay a penalty?
April 13th, 2010 at 9:09 pm
Remember the quote is simply an estimate. The premium could change once it becomes a policy. I would not cancel coverage until you have other coverage in place. You should remember that the new company will not back-date coverage and so there will be “time on risk” that your current insurer will charge you plus any cancellation fees that they have outlined in their contract.
April 21st, 2010 at 5:00 pm
Hi. Should I wait until a month or so before the policy expires and then write them that I don’t want to renew it? Will there still be a cancellation fee?
April 22nd, 2010 at 11:00 pm
You can write to them that you will not be renewing at renewal time – there is usually no policy fee charged
April 27th, 2010 at 7:28 pm
Hi Claudio,
I recently signed on with an insurance company for a 1997 GM vehicle with only Liability coverage. I plan on upgrading to a new car in the next couple of months but found out that my premium would jump several hundred dollars for a wider coverage. The dealer recommended a next insurance company which quoted a much lower rate ($600 cheaper) and I may need to cancel my existing policy after only a week with them.
I explained to my existing broker that their premium was much higher and they advised me that I may be facing a stiff cancellation fee in accordance with the Ontario law.
Now I’m not sure what to do. Could you help?
~John.
April 27th, 2010 at 7:41 pm
Any cancellation fee would be documented on your policy – Depending on the company it could be small or big. I would look at your policy documents and see what they say
Good luck!
May 1st, 2010 at 7:25 pm
Hi, I just signed on with an insurance company last month. However the Transmission of my old model car gave and I want to cancel. Will I get back my last month money as I paid first and last at the beginning of April.
Thanks.
May 2nd, 2010 at 9:21 pm
I would check your policy document for the short rate cancellation schedule – that will tell you what you get back. if not, simply inquire with your broker/agent, they should be able to give you a fairly quick answer.
Good luck!
May 11th, 2010 at 11:53 am
Hi, so what are exactly the scenarios involved with a cancellation of policy due to non-payment? These happened as a result of being unemployed for several months, and after several months of being ok, a failed bank deposit has left me with a cancelled policy. What are the consequences I will be looking at now?
May 20th, 2010 at 1:22 pm
Hi Claudio,
when you decide not to renew a policy, is there a formal way or just a simple mail is valid?
Thanks,
May 24th, 2010 at 11:05 pm
hey claudio,
my insurance is up for renewal in 2 days, and my rate went up. found another company with a way cheaper rate and are ready to register me a new policy…
is there still a cancellation fee if i cancel before the renewal, or day of?
rsvp asap
May 25th, 2010 at 9:00 am
Hi Nick,
Usually the insurer contacts you several times to remind you that the payment is due. If you are past this point, you will simply have to find an insurer that will charge you a higher premium. Like anything else, time will heal and you will eventually qualify for better rates (provided no other factors come into play like tickets or at-fault accidents)
good luck!
May 25th, 2010 at 9:01 am
Hi Pat,
mail is fine – usually the insurer is looking for your signature to protect your interests (in case someone pretending to be you tried to cancel your policy).
Good luck!
May 25th, 2010 at 9:02 am
No. You should be okay.
c
May 26th, 2010 at 12:33 am
Hi Claudio,
I wanted to cancel my insurance and take my car off the road as my insurance (pre-paid for a year) was up March 15, 2010.
So, on the 15th, I decided to stop driving and not pay the reinstatement fee. Two weeks later, my broker called and explained that since I canceled due to non-payment, the best thing for me to do was pay the full 1-year policy fee to get it reinstated, then immediately cancel my policy (this would void the non-payment on my name). My broker also explained that I would only be responsible for a small admin fee for cancelling my account (<$100).
When all was said and done, I ended up paying over $350 ($220 for time on risk, and $130 for cancellation), because my insurance company took the liberty of insuring me for a month after my policy expired without my request (Even though I wasn't even driving). Now they aren't refunding my money.
Is there anything I can do? I know it was irresponsible on my behalf, but surely I don't have to pay $350 just for not sending a written letter?
Thanks, and great site!
June 2nd, 2010 at 1:12 pm
Hello Claudio,
We had our insurance company conduct an appraisal of our home after half a year of already paying for our home insurance that expires in July 2010. After the appraisal we were told by our broker that the insurance company could not cover our home due to the value of the home and they gave us another quote from another insurance company that was high and also had high deductibles. Due to this we contacted other insurance brokers and were able to get a reasonable price with reasonable deductibles. We purchased insurance with another insurance company before our expiry date of July 2010 and we sent out a fax to our current insurance brokers signed by both owners stating that we would not be continuing with the insurance company and noted the date to cancel the policy. A few days later of sending the fax we received an invoice from the original broker increasing the amount we already paid for 2009-2010. We sent another fax with signatures to our previous broker stating that we already purchased insurance from another insurance company and that we would need a credit for their invoice increasing the price of the insurance for our home. Once we sent out this fax the insurance company sent a registered letter to our home and the bank saying that they are canceling the policy only when the policy expires. We have contacted our original broker and told them that we are still waiting for the credit for their recent invoice to increase the price to our policy that they originally priced out in June 2009 and we paid in full on July 2009 but to date we have not received a reversal of the invoice or a credit from the original insurance company. What can we do now that we already paid for a policy from another insurance company and have an second invoice from our original insurance company increasing the amount originally quoted for the policy period of July 2009 to July 2010?
June 7th, 2010 at 2:17 pm
Hi Adam,
Thank you for your compliment. I am very surprised that your broker didn’t at least work to cancel your coverage from the date of renewal. That being said, the insurer has every right and obligation to continue coverage until told otherwise by written letter (including your signature). I don’t think there is much to do at this point.
Claudio
June 7th, 2010 at 2:59 pm
Hi Isabel,
The whole scenario seems to be laced with poor customer service. Seems most of this mess could have been avoided by a simple ITV questionnaire at the onset. Depending on the cancellation date, you would either owe some money still or not. Typically if there is an increase in value to the home, the insurers are pretty good at holding off price increases until renewal (especially if the risk is reasonably close to insured rebuilding cost). I am not certain why the insurer would send you a letter saying that they would only cancel the policy at expiry if you have a signed letter of cancellation for a certain date.
You would only be responsible for the premium from July 2009 until your cancellation date (Using your proof of paid new policy and cancellation letter as a reference date) and any cancellation fee that applies. Any funds owing have to be paid to you or them. Without seeing all the documentation I can only advise you to consult your current insurance broker, your past insurance policy for cancellation terms or a lawyer.
Good luck!
Claudio
June 16th, 2010 at 10:15 pm
How do you canceal Employment Insurance,when there is no contract.
June 17th, 2010 at 2:44 pm
Hi Robert,
Cancelling EI is not really a choice unless you become self employed. I would however speak to an expert in Employment insurance as they may have better answers and options for you.
Thanks!
June 22nd, 2010 at 4:32 pm
Can an insurance company charge you a short rate for cancelling home insurance? I was told home and auto have different rules.
June 22nd, 2010 at 4:40 pm
Yes they do charge a short rate. Home and auto insurance are different, but when it comes to cancelling the rules are the same.
hope this helps!
July 18th, 2010 at 9:00 am
Hi Claudio,
If I buy a new car and sell the old one, do I cancel the current insurance or modify the existing one? What happen if the value of the cars are different? Will the rate be adjusted?
Thanks!
Sharon
July 19th, 2010 at 3:08 pm
Hi Sharon,
You would simply add the new vehicle and remove the old vehicle. Another factor to consider is the timing – if you sell a car and then buy one a month later, you would be starting a new policy.
The value of the vehicle isn’t necessarily a factor in determining the insurance cost – factors such as location, accident frequency, repair costs and safety features are used to determine a cars rate group. The rates are adjusted to the new vehicle.
hope this helps
July 20th, 2010 at 6:40 pm
Hi Claudio,
I just got auto insurance less than a month about and now have to move to a new province ( meaning a differnt insurance company) is there a timeline before cancelation fees take affect?
July 21st, 2010 at 11:27 am
Hi John,
any cancellation fee charged would be stated upfront and be payable from the first minute of coverage (usually a small amount when it comes to auto insurance). In your case you would simply be paying for the time on risk. There is a formula used by insurance companies to calculate this. In your case they would use the “Short Rate” calculation – your policy should have a calculation table for your reference.
Good luck
August 11th, 2010 at 2:47 pm
Hi Claudio,
This isn’t exactly related to cancelling a policy, but I figured I’d ask while I’m here. Shortly after getting (and insuring) my first car in May 2010, I got a new job which requires much more travel time (from no driving at all to 23km each way). In <3 months I've already hit about half what I estimated for an entire year. Do I need to call and change my estimates of KM driven/year? Will this effect what I'm paying?
August 11th, 2010 at 3:32 pm
Hi Sara,
Yes you should let your insurance company know and it may affect your rates or it may not. Usually, companies group the one way distance to work as: 0-5, 5-25, 25+ etc.. The reason behind telling them comes down to the application for insurance that you completed – when you complete it and sign it, you are indicating that all the information is true and that if there are any changes, you agree to let them know otherwise they do have the right to deny coverage or claims. In your case, i highly doubt that they would deny coverage or claims – but i just thought i would outline the technical details.
Again, depending on your company, your premium may/may not be affected and if it is, it should be much. i should point out however, that if you are driving in to a high risk area for claims (eg from country to city) then the rates could increase – but again, i wouldn’t stress about it. In the worse case scenario, you shop it at renewal and see how competitive the rates are.
Congratulations on the new job!
Hope this helps!
Claudio
August 12th, 2010 at 8:21 am
How long is a life insurance policy in effect after cancellation? I have heard 90 days.
August 12th, 2010 at 8:45 am
Hi Ann,
Its not necessarily in effect, rather there is a period of time that you can reinstate the policy. This is also affected by the method in which the life policy was cancelled…i would look at the wording for your policy for specific…
c
September 17th, 2010 at 11:42 am
Hi Claudio,
If i just signed a cash-value life insurance policy but thought i got jipped and found a better deal, could I cancell the very next day I signed? Or how could I cancel that policy without penalties?
September 17th, 2010 at 11:58 pm
Hi Josh,
You would usually have 10 days to review and decide if you want the policy or not. When reviewing the new deal and before cancelling the old one, really make sure you look at the fine print to see what the differences are in the policies and why one is so much cheaper. It is always better to be safe than sorry
good luck!
October 17th, 2010 at 8:58 pm
Hi,
My insurance will be ending this month with a company.
Can I have only 1 month car insurance policy as I am going overseas for a month for a vocation and I want to get one just returing back from vocation.
November 11th, 2010 at 7:26 pm
it would probably be in your best interest to take out an annual policy then remove road coverage while you are away as most companies won’t really offer monthly coverage. Another option would be to ask your company to extend coverage for a month.
good luck!
December 1st, 2010 at 11:27 am
Hi Claudio,
I was hired by a company in july 2010. At that moment I signed papers for health and dental benefits (100% paid by the company) and life insurance for me and dependents. After 3 months probation I was include to have the benefits and the life insurance started to be deducted from my salary.
However, at the moment I signed the papers I wasn’t that I would be paying monthly for this life insurance, since the benefits are paid by the company, I assumed that the life insurance would be paid by the company as well.
After the first deduction I contacted the HR department and requested cancelation since I already have life insurance coverage for my family and I. The answer I’ve got is that it cannot be cancelled and it’s mandatory for all the employees, what is not true since I’m the only in my department paying for this life insurance.
My questions are, as I’m the one who is paying for something I don’t need.
Do I have the rights to cancel it?
Should I pay any penalty for this cancellation?
Can any employer force the employee to have the life insurance chosen by them?
Thanks,
Savio
December 1st, 2010 at 2:36 pm
Hi Savio,
Great question – i’m glad you asked!
The employer is forced to put all employees on the plan in order to have a plan – their hands are tied as well. Group plans subscribe to an “all or nothing” idea. Within a group health and dental plan, all members of the plan must participate in at least the life insurance portion of it and the employee usually pays for it (because when needed, the benefit will be received tax-free, just like Long Term Disability, which the employee should almost always pay for).
i am not certain about the circumstances for the other employees but one possible explanation is that the benefit plan came into effect after their initial employment contract and if the company makes a material change in that contract without their approval, they could be held liable … but then again, they could very well be paying for it without knowing (life insurance on a group plan is generally pennies a month).
You don’t have to pay for life insurance for your family – that is generally optional – the usual requirement is for all employees to have coverage. The simplistic reason is because the benefit plan has to be a life insurance product and thus have a life insurance component to it (for many reasons of which I won’t get into here).
You cannot cancel the life insurance and thus a penalty is not applicable. I would definitely keep your private life insurances in addition to this work one covers you as long as your work with the company – once you leave, you have the option to buy it but the rates will not be the same.
Hope this helps!
December 2nd, 2010 at 2:12 am
Claudio,
For sure, your comments are definitely very helpful.
Thank you so much for you valuable help,
Savio
December 2nd, 2010 at 5:14 pm
anytime!
December 14th, 2010 at 4:24 pm
Claudio,
My homeowner insurance is going to renew soon but the current underwriter won’t renew until we do some more finishes to our home. After a few conversations, my broker still had not advised what was “acceptable” for these finishes, so I advised them that I would find new homeowners insurance elsewhere.
I have the new insurance set up but now my broker wants us to sign a “Cancellation Form” the states “that the insurer be relieved from all liability thereunder as from said date.” My broker is telling me that this form protects me and my husband and if we do not sign then a “flag” comes up the next time we renew elsewhere and could cause our premiums to go up.
Should we sign this cancellation form? Is it protecting us? Or should I write up my own cancellation notice using “guidelines” i have found on the internet.
December 14th, 2010 at 4:30 pm
Hi Rachel,
If you have a new policy elsewhere, you should cancel the old one. The Cancellation letter is a good way to cancel the policy on your terms vs being cancelled by the insurance company, which doesn’t look good on your record. The form should be straight forward listing simply the policy number, the date, the date of cancellation and the insured’s information. Most brokers use a standard form but i would still read it over.
if you wish to email me the cancellation form, i can have a quick look and let you know.
January 19th, 2011 at 8:36 pm
My cousin’s husband died from cancer a year ago. A few months before he passed he wrote to his life insurance company and downgraded his benefit from $1,000,000 to $70,000. A few days later he tried to reinstate the original policy but they refused his request. He had cancer of the brain and was acting irrationally. Does my cousin have any recourse in this situation?
January 20th, 2011 at 3:31 pm
Wow Kim, that is an interesting predicament and most of it goes well beyond my scope as a broker. I would definitely consult legal counsel as many issues seem to be in play here from the mental competence of the man to the procedure by which the insurance policy was revised and whether the life insured was properly advised as to what he was doing.
I would like to stress that those are only my initial thoughts and in no way do I offer them as advice. As a licensed life insurance agent, i would tell you that if a client of mine were to write to me with that request, i would contact him and his beneficiary and determine if the action was truly what they wanted.
I wish them the best of luck in that situation and thank you for your question!
January 23rd, 2011 at 2:03 am
please help me. We didn’t notice that we have still previous policy covering until 2012.
i don’t know how to cancel it.
January 23rd, 2011 at 12:04 pm
Hi Janell,
i will email you and get more information from you. From my experience, even 2 year policies can be cancelled in the same way as other policies – simply signed instruction from you would suffice. I would find out what the cancellation fees would be but the policy should be relatively easy to cancel.
January 25th, 2011 at 1:33 pm
Hi,
If I am to sell my car, is the insurance policy on it immediately invalid or can I continue to drive my Mom’s car until I cancel my own policy?
January 25th, 2011 at 2:35 pm
Hi Mike,
Great question! Once you sell your car, your insurance policy no longer applies as you no longer have any insurable interest in the vehicle. You can continue to drive your mom’s car with her permission of course and her policy would cover you. You can also add yourself to her policy as an occasional driver should you require a longer period of time to find your new car…
good luck!
Claudio
January 26th, 2011 at 7:40 pm
Hi,
I just found that my broker has never added my training course to my insurance quotes. I also want to cancel my policy…I want to cancel 01/27/2011….I am selling my car….my policy is not up until 03/09/2011….My insurance broker is being a dick & won’t take my calls….i have to drive all the way up there 2morrow to fix the problem….Am I suppose to receive a rebate back…..i was also told i cud file a complaint as i may have been incorrectly charged for insurance over the past 2 years…..please help…:)
January 26th, 2011 at 10:51 pm
Hi Pauline,
you can cancel the policy directly with the insurer … not a problem there. Since I don’t know what the circumstance are, i hesitate to comment on what you have been charged for or not. What i can comment is that if you feel that there has been a wrong-doing on your broker’s part, you can file a complaint with the Registered Insurance Brokers of Ontario … http://www.ribo.com.
In terms of money back, that would depend on how long you have owned the policy and how much you have paid. The policy document should outline a cancellation schedule of if not the insurer may give you an idea.
Hope this helps.
Claudio
February 8th, 2011 at 8:14 pm
Hello..I have been a good client to my insurance company, no tickets or at fault accidents, until there was work issues resulting in me not working, so it became tough to make payments. I missed a car insurance payment and the company asked for the payment and months went on. So they cancelled on me and since then i havent drove and took public transport to save money and afraid of not getting insured or having high premiums. I still never recieved a cancellation notice but it must be. 4 months have pasted and i have my job back and found a good company.. everything went well and I thought I was insured but then they asked for my old insurance policy. So what are they looking for when they check it? and will they notice the cancellation and not insure me? also if they insure me will the premium increase? and is there anyways to let them know im trustworthy and to get insured? thx
February 9th, 2011 at 10:33 am
Hi Cory,
I understand your situation and have been asked this question before. Although hindsight is always 20-20, I would like to point out to anyone reading this that if you find yourself in a situation where you cannot make a payment for your insurance and the insurer has sent you the cancellation notice – you have 2 options:
a) pay it
b) cancel the policy before they cancel you. By doing this, it will not show up on your record as cancelled for non-payment (bad)
Cory, in your case, the insurer will notice the cancellation for non-payment and it will affect the terms that you will be obtaining your new policy. They may ask for a stricter payment schedule (to re-build the “trust”), they may charge a premium for you or they may do nothing at all. It will completely depend on who you are working with.
I have found that some places to obtain insurance have the call center format in place and the people on the phone make many many assumptions (even when i obtained a quote – i had to correct many assumptions on their part). Their only concern is the sale and then they ask for the rest of the details later – i hope this isn’t the case for you
The premium will be what it is – so my advice is to be up front from the start and let the person know what has happened and perhaps they can work out something for you.
Good Luck!
February 9th, 2011 at 8:10 pm
Thanks Claudio…I think the company im with is the call center format. I gave them my old policy number but they didnt ask about any past problems and they carried on accepting me for insurance, I even asked them to call me after they looked at my old policy lol but they took my old number and just said ur new policy will start..I wasnt sure what to do or to stop them and say i was cancelled on before, but my new policy has started today and i have better payment method and cheaper also… if the company learns i was cancelled on are the able to cancel my policy once they already started it?
February 9th, 2011 at 10:06 pm
Hi Cory,
Sounds about par for the course lol … I cannot speak to their procedures, especially once they check your driving record. With luck, they are simply taking your good driving record and will not say a thing!
let me know what happens!
Claudio
February 23rd, 2011 at 12:12 am
Hello, so i have been insured for a week or so now and i just recieved cancellation papers from my insurance company saying they cancelled my policy. I’ll be calling them tommorow but im just confused cause they insured me with no problem and now a week later, after they send me all the papers, they just cancel and didnt write why. I didnt even get to make my first payment, im worried but im thinking of seeing a inurance broker. Any thoughts? thanks again
March 9th, 2011 at 7:39 am
I renewed my home insurance 8th march 2011 will not take affect till 19 march 2011. My daughter serching the internet found a home policy much cheaper. I want to cancel, will I incur any penalty charges.On the policy it states I will be required to pay pro rata proportion of the premium for the time covered plusadmincharge of nil
March 10th, 2011 at 1:08 pm
Hi,
I would like to change insurance company because I got cheaper rates. My policy renewed on March 1. It has been only 10 days, do I still have to pay a penalty?
Thank you
March 10th, 2011 at 1:38 pm
Sorry for the delayed response Cory. How did it go? I have found that when you go to a direct writer for insurance (i.e. an agent who sells the product for one company), the person that you speak to on the phone is trained to sell first and ask questions later. It sounds like this was the case in your situation.
I remember when I went to get my own home insured that the agent assumed many things and if i was was a layperson, i would have been grossly underinsured. That being said, i think the broker route would be a better choice because of 1 simple fact – you have options. If your policy gets cancelled from one company, they can find you another instead of leaving you hanging.
Hope this helps (even after the fact).
Claudio
March 10th, 2011 at 1:40 pm
Hi Sylvia,
You shouldn’t incur a penalty for cancelling before the policy is to start. Before you change over, review your policy and the proposed new policy to see if there are any differences in coverage that would make the premium so different.
If you want me to have a quick look, please feel free to contact me … info@insurancehelp.ca
Claudio
March 10th, 2011 at 1:41 pm
Hi Cynthia,
You will likely have to pay a cancellation fee plus time on risk. This should be outlined on your policy. I would consider that before switching … give me a call and i can try to calculate it for you – (416) 862-5605
Claudio
March 17th, 2011 at 8:51 pm
Hi there,
I suddenly find myself in the middle of 2 insurance scenarios but both can be resolved with one answer (I hope). 1) My son just started full time employment. He is still covered under my husband’s insurance and wants to opt out of the company one. Their HR rep asked for proof of insurance. I gave them a printed sheet from our insurance provider showing my son as a dependant. I did not feel comfortable giving them our policy and ID number so I blacked it out. HR says they HAVE to have the policy number. 2) My daughter was on our car insurance as an occasional driver but now has her own car and insurance. Our broker states that in order to remove her from our policy I must provide them with her policy number. I do not feel comfortable giving my son’s employer our policy info nor do I feel I have any right to give out my daughter’s information. I feel strongly enough about the car insurance that I’m willing to just keep paying the premium rather than give them someone else’s information. And with my son, I have provided current proof of coverage which is what they requested. What is it with other companies demanding policy numbers? Am I obligated to provide them? Thanks for you help.
March 23rd, 2011 at 1:26 pm
Hi Terry,
Ok we have 2 different types of policies and thus 2 answers
First: Your son.
With health benefits your son is trying to opt out of the coverage offered by the company he has just been employed with. Benefit plans are mandatory for all staff unless they can prove that they have coverage elsewhere (this included supplying a policy number for a spouse’s plan). By mandatory, I refer to the fact that all staff must participate in one form or another (usually having to take the life insurance at minimum).
Unfortunately, this doesn’t apply to your son’s case. Once he enters into full time employment, he is no longer considered a dependant and thus no longer qualifies for coverage under your husband’s plan. His company would look this up and tell him in a nice formal letter. So you are totally right, you do not need to provide them proof of coverage, policy number or Employee ID number because it is irrelevant. IF this was you opting out of coverage (or if you intended to keep both policies), then you would have to provide the policy number (not the employee ID number). Your son cannot completely opt out of the coverage and should use it.
Second: Your Daughter.
To provide or not provide the policy numbers – that is the question. The old/current insurer simply wants proof that she has placed coverage elsewhere in case a future legal action is brought against them they can show that they insured your daughter until a certain date where she obtained a new policy and here is the policy. The policy number, while private is actually listed on all of our insurance records and can be obtained that way. No, you don’t have to provide this policy number to the insurer but it helps.
I hope this answers your questions
Claudio
March 29th, 2011 at 1:11 pm
Hi Claudio, by chance I came across your website blog area. As I was reading through the Q&A’s I was very impressed to see such straight forward and helpful answers. Nice job. I have you bookmarked for future contact.
Regards
Chris
March 29th, 2011 at 2:14 pm
Thanks Chris!
April 15th, 2011 at 5:53 pm
I’ve submitted a cancellation request with a company on my father’s behalf since he is away. I attached a copy of my Power of Attorney, signed my cancellation request. Now they want photo ID of myself and my father? Has that ever been heard of?
April 18th, 2011 at 11:45 am
Hi Jay,
It sounds as if they are being super careful. Not unheard of… They are probably reacting to past cases where things haven’t gone so smoothly.
Good luck!
Claudio
April 25th, 2011 at 4:14 am
HI, CLAUDIO, I cancelled my life insurance last march 09,2011 the policy issue feb. 10, 2011. Do i have to pay monthly premium?
April 25th, 2011 at 11:47 am
Hi Joy,
If you cancelled the policy, then you would no longer be required to pay the premium.
Claudio
May 5th, 2011 at 5:02 am
Hi, I’ve bookmarked this as well! Great site.
I’m changing insurance companies for both auto and home on May 9th as that is when the policy ends. I’ve entered into a contract but it will not be in effect until then. Can I still cancel without penalty? Hmm.. sounds like a question asked already but it’s 5am’sh so I’m asking anyways
Also, my husband is covered with his employer as he has a company vehicle, does he still have to be covered under my car policy as an occasional driver?
Thank you
May 5th, 2011 at 12:48 pm
Thanks Teresa!
I was actually awake at that time as well but didn’t think responding would be a good idea until i had a chance to wake up 
you can cancel without penalty as the policy hasn’t started yet and there has been no time on risk. Some policies may come with a small fee (minimum retained) … I’ve seen $15, $20 etc. Look to the policy wording or if you haven’t received it yet, ask the agent/broker (remember most will be asking you why you are cancelling the policy and you may have to do it in writing!).
As for your husband, he doesn’t really have to be covered but it won’t really affect your rating unless he has a bad record. Next time you need a quote, give us a try!
Good Luck!
May 6th, 2011 at 3:50 am
Brilliant! Thank you
) it’s funny how I mention my husband having a policy already and no one volunteered that he didn’t have to be on mine. When I asked if he could be removed they spoke with their managers and was able to take him off. WOW the difference!!
I will definately call you next time around and refer you to f&fs for quotes. Thanks!!
May 6th, 2011 at 9:22 am
Claudio
May 13th, 2011 at 8:25 am
Hello,
I have just recently cancelled my auto insurance policy and was told that I would have to pay a pricey cancellation fee. Can the insurance company do this? At the time I set this policy up, which was over the phone, I was never once told that if I were to cancel that I would be charged a fee. They say that this information is in the policy documents but my arguement is that our contract did not start after I read their policy documents and signed an agreement page…the contract started after our phone conversation. I believe that if they are to charge me this cancellation fee that I should have been told about any such fees during our initial conversation.
What do you think?
May 13th, 2011 at 11:58 am
Yes, i totally agree with you but unfortunately with auto and home insurance, the companies place the onus on the insured to read the manual, ask the questions etc.
The fee that you will likely have to pay is comprised of Time of Risk and some cancellation charges. If you cancelled it fairly close to the inception of the policy, the cancellation will be based on what is called a short rate calculation. In English, they factor in how much the policy costs per day plus admin expenses and such
Once you verbally agree to the policy and sign the application, you a in a legally binding contract. There is never a bad question and as you proceed forward, i would ask future agents/brokers about cancellation fees … if they don’t know, they perhaps that isn’t the place to do business…
Hope this helps!
Claudio
June 16th, 2011 at 10:00 pm
My auto insurance was canceled and the lease send me a letter saying that they were going to terminate the because of that what are the consequence? do i have to pay them more money?
June 16th, 2011 at 10:18 pm
Well, they are going to terminate because it is mandatory that you have auto coverage (regulated by the government and the leasing contract you signed).
I am not a lawyer nor do I specialize in contract law, but it would be wise to read the leasing agreement and determine what the company’s rules are for early termination and insurance.
Getting a new auto policy and confirming it with the leasing company would probably cancel the termination request (but again, i don’t know about your situation specifically).
Hope this helps!
June 21st, 2011 at 12:17 pm
Hello Claudio, I have just got rid of my old car so I no longer need the insurance policy for the car. I am about 6 months through with 6 months left – so I should be able to get a decent amount back. However, I just rang them up and the man ( who admittedly didn’t seem to know what he was doing) said I would have to pay a cancellation fee – I asked how much and he came back after a while and said the rest of my policy ( around £200). . . Is this possible ?:( I really can’t afford to pay this off for a car I no longer own ! Please let me know if they can do this? Thanks very much
June 21st, 2011 at 1:12 pm
This is a tough scenario considering that i don’t know the wording of your policy. Typically, the cancellation of the policy is either using a short rate calculation (which is time on risk + cancellation fees) or pro-rata (which is simply time on risk). I would check your policy wording as they may outline the procedure for early termination of the policy or simply ask another person. Paying the balance of the policy does not sound right to me (but again, i don’t know the specifics of your policy wording)
Good luck!
June 23rd, 2011 at 10:10 pm
Hello Claudio. My husband got a policy car almost 3 years ago. At that time we had just move it to Canada (ontario). Very little understanding and speaking english at that time. I got involved in an car accident, but at that time I was driving my brother’s car (for first time). My husband car was broken down and I borrowed my brother car that day. I was given fault for the accident. Couple weeks later I consult a lawyer to make a claim for my benefits so I have been having really bad pain in back since the accident. By now the company of my brother’s car informed me that I have to claim my husband’s car insurance. The problem is that I am not listed in my husband’s policy. He appears in it like “single” (Looks like it is due to the lack of the language when he got the policy). Now the insurance companies are disputing to see which one have to pay for my benefits. Because his car is in very bad condition he leased a car which is insured. The lawyer told me that Because I have driver license I must be insured so now I was included in the policy for the old car as forts driver (actually we pay $350 for that policy and $200 for the leased car). Someone who works in a broker’s insurance office told me that my husband’s car insurance may decide cancelling his policy for omitting information. My questions are : Can the insurance company cancel my husband policies ? If yes what we should do? I heard something about facility policy. Is that to expensive?
Note: Sorry about my writing but English is my second language. Hope everything is clear. If not please you can write to my e-mail: gicopova@hotmail.com.
Thanks a lot for your help.
June 25th, 2011 at 9:29 am
wow, that is an interesting situation. Yes, the insurance company can cancel for not telling them everything. Ultimately, the responsibility to disclose information to the insurance company falls to us as drivers.
What I don’t understand is why there is still insurance on the old car if it is a wreck? Why do you have 2 policies and only 1 functioning car?
yes, facility is expensive and in certain cases, very necessary. If a driver’s record indicates that they are a high risk, they are generally placed in the facility market – the rational is that everyone in Ontario must have auto insurance and while we all share the cost of the coverage, some drivers cost too much and have to pay more than others until their driving record improves.
hope this helps.
June 30th, 2011 at 11:16 am
Hi Claudio,
my friend asked me a favor to look into some info for her. She had life insurance for three years. She was paying $180 every month for it. But unfortunately she lost her job, and because of that she had to cancel her life insurance. My question is, since she paid for three years, shouldn’t there some refund. If yes, what is the procedure to claim it.
June 30th, 2011 at 12:40 pm
Hi,
Great question but the answer is one I cannot really give without seeing the policy. I would read the policy wording to see if there is any amount built up. The most likely answer to your question is no. In fact, if at any time in that 3 year period, the insurer would have paid the policy out if your friend had died and thus ensuring that the premiums were earned by the insurer and non-refundable.
July 1st, 2011 at 1:26 pm
Hi,
My job recently had an open enrollment with a chance to increase or enroll in life insure. I decided to increase my existing life insurance. I didn’t qualify for the increase without a medical exam. I decided the medical exam was not worth my while; I sent a written letter to the insurance asking them to cancel the increase application. The next thing I know they cancelled the application and the existing policy that I had previously qualified for and have been paying for five years. The insurance company is refusing to reinstate the policy even though they admit my letter only adressed the new aplication. Now they want me to submit to a medical exam and start from scratch. What can I do? What are my options? Thanks!
July 4th, 2011 at 12:03 pm
That is a tough one since my knowledge of Florida life insurance policy rules is limited. I would try to escalate things and speak to a higher power, failing that, you may wish to obtain a plan on your own. I know it is more expensive but it will be your own plan. Speak to a local agent so that they can outline your options.
Good luck!
July 26th, 2011 at 3:46 am
Good day
Please advise,i need to cancel my 2 policies,m i going to get a refund
Kindly e-mail me a set up letter that i can use
July 26th, 2011 at 5:29 pm
Hi Lorato,
That is one question i cannot answer based on the information provided. Whether or not you get money back is completely related to so many factors including what point in the policy you are in, how much you have paid in and the policy rules that you have agreed to.
Thank being said, you can cancel you policies by composing a letter that lists the policy number and a line that states: Please cancel policy number abc123 effective (the date you wish it to be cancelled). then you have to sign it. …easy as pie…
August 5th, 2011 at 2:20 am
Excellent advice in these comments, thanks for taking the time to answer all these questions.
I currently live in Ontario and my car insurance policy is up for renewal very soon. Except I’ll be leaving the province for 1 year and I won’t be needing the car at all during this time.
If I stop my coverage on the renewal date, and come back seeking another policy a year later, how much more can I expect to pay?
August 5th, 2011 at 9:35 am
it shouldn’t be a problem – they cannot charge for a penalty for being out of the province for a year.
good luck!
August 16th, 2011 at 11:18 am
I bought a new car in May 2010. I sold my old car at the same time.
My broker signed me up with a new insurance company for the new car and I signed a cancellation form for my old insurance which was with a different company.
It is now August 2011 and they have told me that my old insurance was never cancelled with the old company. According to them “we only yesterday discovered that his policy was not cancelled last year even though we sent 2 requests” to the old insurance company.
I checked my bank records and sure enough I was being charged for insurance on a car I haven’t owned for over 2 years.
What is my best course of action to get my money back?
August 16th, 2011 at 11:28 am
Sorry I meant to say I haven’t owned the car for over 1 year.
August 16th, 2011 at 7:22 pm
That’s a pickle! I would be in constant communication with your broker. they have evidence that your policy was supposed to be cancelled and should press the insurance company to refund you the money. I would also stop payment on the withdrawals.
Hope this helps!
August 16th, 2011 at 8:33 pm
Hi,
My business insurance was cancelled today after only have it for 3-months because my classification was incorrect (total crap). I was told I have 30 days left until it’s officially CXLD. My questions is…am I entitled to any money back from my down payment? I pay on the policy monthly and of course I didn’t pay for the entire year upfront.
August 17th, 2011 at 10:13 am
that is such an odd thing to happen. I am not certain about whether you will get money back because it would depend entirely on the contract you signed and the policy. For example, if the policy featured something called “minimum retained premium”, then the insurer is entitled to “x” amount of dollars.
I hesitate to offer advice more than that without seeing the situation. if you would like assistance on properly insuring your business so that this doesn’t happen again, please feel free to contact me. I would however seek all the information (including any previously completed applications, your current policy and information about your all business activities)
August 21st, 2011 at 2:53 pm
Thank you very much, I will be in touch with you.
August 23rd, 2011 at 2:26 am
I insured my car last august (a year ago) on the 29th. This year I got the renewal letter (about 2weeks ago) and this passed week (the 18th) my first payment came out for the new policy. But I may have found a cheaper rate. Why do I have to pay the new $ amount before the previous year is even finished?(since I would assume that my previous policy should cover me to the 29th of this year?- maybe I assume wrong) And can I cancel this policy for the new one without penalty?
August 23rd, 2011 at 1:16 pm
Sounds as if you are on a monthly payment plan. It is customary for the policy to collect the funds 1 month in advance. If your policy hasn’t renewed yet, you can cancel without penalty and you will get that money refunded to you.
September 4th, 2011 at 8:10 pm
Hi Claudio,
my insurance policy started on Aug.31st,2011 if i want to cancel it will there be any cancellation fees
September 5th, 2011 at 6:44 am
This is a touch (though not entirely) off-topic, and given that it happened two years ago is completely academic, but it *has* been bugging me, so having found this (wonderful!) page I may as well ask!
2 years ago, I took out insurance on an iPhone in advance of a 5-week field trip (didn’t want it accidentally hitting a rock whilst uninsured), with the policy being a minimum 12 months, rolling monthly thereafter. Premium and cover were reasonable (better than the phone company’s), so I took it.
Two months or so later (after the trial period had expired and I’d be liable to pay a cancellation fee), I received a letter from them to the effect that (a) water damage would no longer be covered on their policies and (b) their prices would go up (crucially to more than I’d have paid with the phone company). There was a strong implication that this was on all policies, not just mine. As I had just returned from said 5 week trip, and straight back to college for my third year, I didn’t have time or energy to query it, so just let it happen. I did however check their site a few weeks later (and then again a few months later) and both times found them advertising the old price and old conditions (i.e. cheapest on the market and covering water damage).
Of course it’s far too late to do anything about it now, but I’d be interested to know – was I just being had, or is that in any way legitimate?
September 6th, 2011 at 10:16 am
Hi Mona,
There will probably be some fee – i would definitely check your policy documents (if you have received them yet) or ask the agent involved.
Good luck!
September 6th, 2011 at 1:09 pm
often these companies make offers that are “loss leaders” in order to bring people in. That being said, without reviewing the actual document, i don’t know what they offered to do for the money that you gave them. Their rates / conditions could have changed due to a surplus of claims that they did not anticipate or they just didn’t anticipate this many claims. As for why they continue to advertise the old rates/terms …. loss leader comes to mind.
September 21st, 2011 at 9:52 pm
what happens if my new broker forgot to cancel my old insurance when i switched? will i get all that money back?
September 22nd, 2011 at 7:33 am
Hi Kevin,
yes you should get that money back to you. You can assist the broker by giving them proof of your new insurance and when it started (it is mostly for red-tape than anything else)
good luck!
September 27th, 2011 at 8:29 pm
Great site, thanks for the answers.
I have an unusual situation, I recently got married, and we wanted to change from my employer’s insurance plan to her employer’s plan, as a cost savings measure.
When we called to make the changes, she was told that her gender was “male” and thus, she could not add me to her insurance. Ok, fine, so TWO MONTHS later, she’s still getting the run around from her employer, although we seem to have finally worked it out.
However, we have passed the 30 day interval, so I can no longer cancel my insurance, and she can no longer add me to hers.
I made the decision to retain my insurance, because I was seriously concerned that her company would drag their feet. They did.
Now to my question. Is there any way to cancel my insurance outside of open enrollment? Her company has acknowledged their mistake, and will probably allow us to sign up for her insurance, but my company is refusing to allow me to cancel because it’s been longer than 30 days.
I should tell you, on two separate occasions my payroll company has incorrectly billed me. They deducted too little, and subtracted from my check to make up the difference.
Any help or ideas would be appreciated.
September 28th, 2011 at 10:48 am
Unfortunately, with group benefits every employee must participate in the plan in some form or another. The mandatory component is usually Life insurance. You can choose to opt out of the health and dental benefits when you show proof that you have coverage elsewhere.
in terms of billing, it is unfortunate but that is what happens. I had a client who was billed 2 years for services they never received. Needless to say, they got their money back (after allot of fighting with the insurer).
September 30th, 2011 at 2:03 pm
Hello,
I received a letter from my insurance company a few months ago indicating that I must replace my Oil Tank before August 2012 or they will stop insuring my home. The oil tank is an indoor above ground tank located in the heated basement and is in perfect condition and is only 18 years old. I have spent the last months researching the subject and discovered that a) there are no laws requiring me to change my tanks provided it is not leaking; and b) that these requirements are only enforced by the insurance companies to reduce their liabilities. I have obtained a few new quotes from other companies who require the change-out of tanks at 25 years and they also have cheaper yearly premium. My policy renewed on September 11, 2011. Can I break it now without incurring a penalty?
September 30th, 2011 at 2:23 pm
Well, there are 2 ways to do this. First you can cancel the policy and incur the cancellation charges or (and this totally depends on whether your insurance provider is cool or not). They can cancel the policy due to a change in risk profile (or whatever excuse they want to put in the file) on the same day that you sign with the other policy.
This will enable you and them to get off the policy cleanly. They don’t want to insure it as it is and you don’t want to incur penalties.
just a thought…
October 11th, 2011 at 9:40 pm
Hi Claudio,
I read a lot of questions about cancellation terms and i am trying to understand my auto insurance agreement. I could find the following: “You may close your SFPP account at any time by merely providing notice to State Farm or your agent. Closing your account does not relieve you of any obligation to pay premiums due on your insurance policies. Separate billings may be sent to you for each policy”. Does it mean that if I want to cancel my insurance before renewal date I have to pay all the money for every month until my next renewal or something else. Please explain as I cannot find any other terms on my insurance. Thanks a lot.
October 12th, 2011 at 11:13 am
I think what this is saying is that if you cancel your policy and still owe money, you still have to pay. Without seeing the policy documents, i would hesitate to offer anything other than general statements.
Generally, if there is a cancellation fee, the document must state it on the declaration page (ie. the page that outlines the policy information). If you cancel the policy before the halfway point, it is i likely that you will owe the company money vs. cancelling after the halfway point where they may owe you money.
Hope this helps!
October 13th, 2011 at 2:13 am
Hi Claudio,
I’m about to cancel my life insurance. Do I get full refund of the premium I paid? Is there any penalty, admin fee, early cancellation fee… etc. And usually how long it takes to go thru the whole process?
I called my insurance company and basically they told me to do it in writing and fax it over as you suggested…. but just to be safe, any catches at all?
Thank you for your help and really appreciate it.
October 14th, 2011 at 12:47 pm
There shouldn’t be any issues – a signed letter requesting cancellation is what they need. I would be curious as to why you are cancelling it and offer caution. In terms of refund of premiums – that totally depends on the type of insurance policy that you purchased and if you paid for that rider. Term insurance policies usually don’t have that as an option. Whole life policies and universal life insurance policies do offer that as an option but only after a few years of the policy being in force (depending on the company’s wording)
hope this helps.
Claudio
October 31st, 2011 at 11:28 am
Hi Claudio,
Are all insurance companies short rate cancellation tables the same?
Are the short rate tables made by the governing body for insurance or by the insurance companies?
October 31st, 2011 at 12:26 pm
Hi Michael,
they are pretty much all the same – where they differ is in policy fees and cancellation fees. The short rate cancellation table basically provides for time on risk for the first 6 months plus some fees for administration. After the 6 months period is the “profit” side of the year (in a manner of speaking).
October 31st, 2011 at 6:43 pm
Hello Claudio,
Today in the morning I made agreements with a auto insurance company, I even gave my bank account info to them because they gave me a good rate. But later in the afternoon I found another Auto-insurance company with better rates, which I accepted right away. Do I have the right to rescind or cancel the first policy the same day? I didn’t even signed any document yet. Will they charge me any fee?
Thanks
October 31st, 2011 at 11:45 pm
What happens if a personal injury claim is filed for an old automobile accident after you have cancelled your old policy and switched to a new insurer? Can I assume the policy coverage pre-cancellation still applies?
November 1st, 2011 at 8:48 am
easy answer would be yes but i would consult with the personal injury lawyer. There are limitations that you must adhere to as well such as when the accident occurred vs the date of claim. best of luck with it!
November 1st, 2011 at 8:49 am
no, they should cancel it ab initio (from the onset). It shouldn’t be a problem.
November 2nd, 2011 at 7:06 pm
If one has a cancelled policy due to repossession/non-payment. Will my new insurer be aware of this had I not mentioned it?
November 3rd, 2011 at 1:30 pm
yes probably it would be listed on your autoplus
November 9th, 2011 at 2:11 pm
hi claudio,
i wanted to know if i called in and cancelled my health insurance…would i have to write a letter confirming it or will they send me the documents and i just fill them out. i called my insurance company (capital blue cross) 2 weeks ago and they havent sent me the form as of yet. Should i call them back and request a form or just write a letter and sign it. thanks for your help in advance.
November 9th, 2011 at 2:35 pm
you would still need a signed statement of direction. You can easily do this by preparing a letter that has the policy number, your name, your signature and your instructions…
C
November 24th, 2011 at 9:25 pm
Hi I was with a broker for three years my policy ended on the 18th he automatically renewed it however I did not sign anything I got new innsurance on the 24th now he is saying I have to pay a large cancellation fee what do you think? do I have any arguement?
November 25th, 2011 at 9:46 am
Hi Steve,
There is a funny line going on here. On one side, your broker is doing his job and making sure that you are protected – it is actually his legal requirement. Most policies simply renew and require signed direction from the insured in order to cancel. Many lawsuits have been fought over policies not renewed or cancelled by people impersonating or speaking on behalf of the insured.
In terms of cancellation fee – that also depends on the type of policy … without more details i cannot counsel on that.
do you have an argument … yes/no. Did the broker try to contact you at all to remind you of the renewal? Did you contact them to say that you don’t want it anymore? Can the policy be cancelled “ab initio” (from the inception)? What are the terms of the contract?
Hope these thoughts help!
November 27th, 2011 at 3:51 am
hi i have a problem with my car and home insurance. I faxed my broker nov 8 to cancel my insurance,i sent one form for both the renewal was on nov 15/11.I had a hard time reaching this women/man in which i had to find out who she/he was.I told them the nov15/11 cancelled on the letter new insurance recieved on the 15.This women emails me back nov 21/ saying i need a condo cancelling form too.I sent that nov 25/11 and they took out the new policy payment for nov15/11 IS THIS LEGAL?
November 27th, 2011 at 4:27 am
..continue from last post i think if she emailed me after Nov8/11 which gave her 5 business days to email me before Nov 15/11The renewal date this could have been solved. But she took her sweet time, and replied Nov 21/11 can http://www.qiocanada.org help me?
November 28th, 2011 at 10:02 am
Hi Claudio,
If things could get any worse i just don’t know what to do.
Here is the question…a relative of mine is paying for car insurance but is totally being taken for a ride. They called the insurance broker last week to inquire about making a payment and possibly revising the premium they are under as they feel its wrong. In addition my relative was also concerned if the policy was cancelled (broker was like ill have to get back to you on that??? that makes no sense, however they never received a resisted mail which i have found through research is mandatory. Now this past weekend they got hit by some stupid driver and the car is totaled, the cop charged the other driver as there were many witnesses to the accident as she ran the red and ran into my relative.
So now my relative is freaking out that policy was cancelled and they didn’t tell them even though they called to inquire…so what now….they have to some way tell them and give them time before they actually cancel correct?
your help is greatly appreciated.
November 28th, 2011 at 11:03 am
Hi John,
Sometimes paper work takes a long time to process and unfortunately in our business there is an inordinate amount of paperwork. In terms of the premium withdrawal, the insurance companies automate the process and it takes a little while to finally reach the database technician who will stop the payment withdrawal – which is always 1 month in advance. I am pretty certain you will receive that money back to you.
November 28th, 2011 at 11:08 am
wow, i hope they are ok! Having been through an accident and still in the recovery process, i know that it is a life altering ordeal.
You are correct, there must be sufficient notice sent out (even if cancelling for non-payment) to the insured before the insurance company can be off of the risk. Have they been able to open up a claim? Has an adjuster been assigned? Keep all the communication documents between your relative and the insurer and especially interaction documentation between your relative and the broker (if there is a claim that is denied, your broker’s errors and omission policy could be made to pay for damages for any errors committed by them). Hopefully the policy remains in force and there won’t be any issues with the claim…
In terms of premium, i cannot comment on that because i have no information.
Good luck!
November 28th, 2011 at 12:01 pm
Thanks for the quick reply,
So here is an update hopefully u can shed some light on it.
So my relative showed up this mornign at the insurance broker to pay anything outstanding…the son said u r giving me to much money according what is showing outstanding, the broker goes on to tell my relative that there is was mix up last week and they had to re apply another application and that application would not be valid until my relative came into sign it. So my relative replied i called you last week and you did not mention anything that i had to come or that the policy was cancelled or your moving it, and i did not receive any note from anyone…now they tell my relative they have to look into it and get back to him…this is B.S this is no way my relative fault they should be still insured cause they were never notified even when they called in personally..they are telling him that they had to switch it from a monthly to a bi yearly payment…still my relative should be covered..correct?
thank you
November 28th, 2011 at 12:59 pm
another quick question for you too Claudio please,
so lets just say worse case scenario so the other driver has been charged and its 100% her fault her insurance will pay to fix my relative’s car? beside the injury we just want the car to be fixed.
thank you again
November 28th, 2011 at 1:49 pm
that is a difficult situation to comment on without hard facts and i cannot confirm that coverage is in fact in place … Generally speaking, without notice of cancellation or specific notice of changes, i cannot imagine that coverage was removed…
November 28th, 2011 at 1:53 pm
The way it works is this: Each party’s insurer pays for their own client. From there, they subrogate (recover funds) from the insurer whose client is at fault. If you don’t have coverage, you can take coverage from that person’s insurance policy to an extent. Unfortunately, this is going to take a while and if the car is beyond repair, it may be written off…
November 28th, 2011 at 2:04 pm
thank you so much for your help,
i told my relative they need a lawyer for sure, because this insurance broker and his son don’t seem to know wth is going on cause this morning each were pointing the finger at the other. When asked to see proof that a letter was sent the older gentleman kept saying “if they informed, then they informed you” and we are a MILLION % sure nothing was sent…
What’s poves them even more to be lying is the fact they said that my relative had to come in to sign some new papers..if that’s the case then why didn’t you call them last week to come in and sign..see where im going with this. God what a headache
For sure a lawyer is going to be needed in this case.
I truly appreciate all your help and time..
thank you once again
November 28th, 2011 at 2:40 pm
it does look as if it will become more complicated before it gets better … best of luck to you!
November 29th, 2011 at 11:20 am
so im back with an update for you…now the broker is saying one thing and the insurance head office is saying another thing. they now claim they sent a note on a certain date but WE NEVER GOT ANYTHING in the mail…they were like well we dont know we’ll get back to you
Im so worried rite now,,,another thing doesn’t the cop have to charge someone with the accident? 2 witness said it was the other drivers fault and the cop agreed and saidd it was not my relatives fault..so would they not be issued a ticket?
what happens now if this whole freak of bad luck happend with the insurance? we want nothing just fix the damn car or get the book value?
November 29th, 2011 at 11:56 am
Hi Eva,
I actually don’t have answers especially as it will likely involve a court case and my knowledge of this case is limited to our brief interaction. All i can counsel you is to keep all records of communication and continue to fight for your rights. You were supposed to get due notification of any cancellation of a policy. Consult an insurance lawyer and disclose to them everything that has happened.
Best of luck with this!
December 20th, 2011 at 6:31 pm
Hi Claudio,
I have a very strange situation. I moved from Alberta to Ontario in 1999. I stayed with the same insurance company and called them when I moved to give them the new particulars. Now, after almost 11 years, I find that the Ontario branch never called the Alberta branch to cancel that policy. I’ve been paying for insurance for 11 years that I didn’t need. They admitted that it’s their mistake and that I did everything I needed to do. But they are not obligated to give back all of the premiums. They’re being ‘nice’ and giving me back half. What are my rights? Should I go to a lawyer?
Thanks. Great site!
December 21st, 2011 at 11:29 am
Hi Peter,
That is a strange situation. If you can provide them proof of insurance for those 11 years, i cannot see why they wouldn’t refund the money. Were you paying double for insurance did they simply hold coverage in both provinces?
Going the legal route is always a tough decision, as you must weigh the financial gain vs the cost. I would follow the paper trail and determine what is actually owed vs what was covered. Once you have that information, i would escalate the matter as far as you can. If you are still not satisfied, then you may have to seek legal counsel.
Thank you for your kind words and good luck!
December 29th, 2011 at 7:51 pm
Yes Claudio, this is very strange. It’s coverage on the same vehicle in 2 provinces. They’ve given me 5 years worth of premiums back, now I want the rest.
I’ll take your advice and see what I can do about it.
Thanks for the advice.
December 29th, 2011 at 8:08 pm
Anytime… Best of luck!
January 5th, 2012 at 3:54 pm
Hi Claudio,
Sorry if this was already asked. I didn’t go through all the above questions.
I was wondering when I go on maternity leave, can I be added to my partner’s (we are not married) car insurance as an occasional driver instead of paying for my own for the year? Would that save any money for that period or could it hurt my policy once I need it again?
Thanks.
January 5th, 2012 at 4:06 pm
Hi Mandi,
Congratulations! Do you live in the same place? You shouldn’t have an issue being added (unless there are issues with your driving record). It should be noted that if you have 2 vehicles, then there must be 2 principal drivers on the policy. You will still benefit from multi-vehicle discounts though.
Good luck!
January 5th, 2012 at 6:06 pm
Thank You!
Yes we live in the same place and my driving record is fine. We would just keep one car off the road altogether for that time. Is it possible to do that? I would still want to drive my partner’s car some of the time.
Thanks for getting back to me so fast!
January 5th, 2012 at 6:09 pm
that is a tough one to prove. You can delete road coverage from the other car and perhaps that will enable the insurer to list you as an occasional driver.
not a problem
good luck!
January 5th, 2012 at 9:23 pm
Thanks Claudio!!
January 18th, 2012 at 3:11 am
Hie,
I defaulted my payments for the past two months , however instead of paying my insurance i want to change to another insurance…for teh year that i was covered with my current insurer i never received the contract i have been in touch with them wanting a copy several times and they have never send me one , so i do not even know what i am paying for and what my excess is…i stopped paying after i got tired of emailing and trying to get a simple contract. Now i want to send them an email stating that i am cancelling my policy with them as a result of this and i want to put the last date of payment as my cancellation date …will they charge me or i have a leg to stand on
January 18th, 2012 at 10:41 am
Irene, you cannot switch to another without paying for the first one. Further, now that you are likely cancelled for non-payment you are considered a high risk and have to be placed with specialty markets. You will have to pay for the policy up front via certified funds.
if you want to cancel and insurance policy, you have to put it in writing and sign it. I think they will charge you past monies due if anything…
January 18th, 2012 at 12:32 pm
I’ve paid into a life insurance policy for about 25 years and would like to now cancel it. What is the policy on Dividens to be paid back to the owner of the policy?
January 18th, 2012 at 12:44 pm
Carrie, thanks for the question. The answer to your question totally depends on what type of product you have purchased and paid into. The first step i would do is look up the document. From there i would contact the current company holding the policy. They will assign a rep that can give you much more accurate answers than i ever could.
January 18th, 2012 at 1:33 pm
Thanks Claudio
On another note I have currently moved and my auto insurance has now doubled based on my postal code. I moved from M9A 4W3 to M6N 4X4 (this is a distance of 1.2 KM and my rate has gone up 2280.00. This seems outragious how can they do this. Is there anything at all I can do.
January 18th, 2012 at 2:02 pm
it is entirely probably. Some insurance companies rate certain areas higher than others due to many factors especially loss experience.The only thing you can do is shop it around and see what is out there.
February 9th, 2012 at 9:44 am
Hello Claudio,
I am leaving the country for a few months or longer and called to suspend my auto insurance. The quote is not much of a difference then my regular monthly payment. I have been with the company for 1yr and a few months. I asked what if I decide to sell my SUV and they said since I am not at the renewal date I would have to pay cancellation fees for the months up to October this year. That is crazy. If I sell my SUV, which I already have a buyer, why would I have to pay insurance for a vehicle I no longer own? This is so frustrating as I already passed the 1 year term with them and should be on a month by month basis.
help
February 9th, 2012 at 5:26 pm
Hi Priscila,
The auto insurance policy is actually an annual contact and doesn’t go month to month after a year – that is actually more of a rental agreement.
if you are leaving for a few months, it would be wise to simply remove road coverage and retain coverage for damage and theft. if you sell the vehicle, then you will owe for “time on risk” which is the difference between the premium left and the amount that is earned. This could either be an amount owing, payable or zero. When we pay monthly, the premium is spread out over 12 months but it is actually earned differently from that by the insurance company.
hope this helps!
February 11th, 2012 at 7:54 pm
Last year l fell behind on car insurance payments and was required to pay the full year amount and l did. Now on renewal they are requesting l pay the full amount again and l am in school now and cant afford to. The policy was renewed jan 2012 and now they are requesting the whole year one time payment. Can l cancel, and if l do would they cancel right away or give me a couple of months? l would pay what l owe but will l be recorded as non payment?
February 13th, 2012 at 5:20 pm
if you cancel, it won’t be recorded as a non payment. i would suggest that you park your car and remove road coverage. this will dramatically reduce the cost and at the same time, ensure that you do 2 things: 1) continue a record of paying for insurance and 2) continue having auto insurance (ideal for when you are ready to drive again)
Hope this helps…
c
February 15th, 2012 at 2:32 pm
Thank you Claudio
February 29th, 2012 at 6:03 am
hi
i just signed a life cover insurence over the phone for 1031.89 and i found a better quotation of 423.23 from other company for building and the house is not yet tranferred. my question is, how do i tell the first insurence to stop or cancell their policy. i have emailed them a letter for cancellation but they are refusing to cancell the policy. please assist.
February 29th, 2012 at 10:14 am
Hello Peter,
To cancel the policy you do one of 2 things: put it in writing with a signature and/or stop payment on the withdrawals. I will caution you to ensure that you have been underwritten and approved by the second company before you cancel the first policy. Often quotations are simply estimates until the underwriting process confirms your eligibility.
Best of luck!
February 29th, 2012 at 11:43 pm
I signed up with a new insurance company in october and because of the age of my house they said that they will send an inspector. He came last week (after 5 months of payments) and I got a call today from the company today saying that they are cancelling my policy because my roof is finished and there may be water infiltration. They have given me 15 days to find a different insurance company after having paid my premium for the past 5 months. Is this allowed?
March 1st, 2012 at 12:16 pm
yes it is allowed and one of the problems with trying to get insurance over the phone through a direct writer because the person in a cubicle usually doesn’t do any underwriting. My sincere advice is to contact a broker who has access to multiple insurance markets and can give you options.
March 6th, 2012 at 7:54 pm
hey
I live in ontario, and had signed a policy saying i would pay $600 per month. i was given a copy of it and a temporary slip. 3 weeks later recieved package in the mail saying the monthly premium would actually be $781monthly. called my broker and they said they made a mistake on the quote and that it will be $781. so my question to you is shouldn’t they have to give me notice of increase? if so how much time should i get.
March 6th, 2012 at 10:17 pm
Hey, So Ive been having an issue with my insurance broker for…well, since I started with her a year and a half ago. My insurance company is fine but my broker (this is for auto insurance), she is the nastiest person i have ever met. She is an older lady, probably been at her job her entire life and she’s so rude to me it’s not funny. I hate having to call her. I’m buying a new car this week and asked her what my insurance would be. The attitude behind her answer was so bad, I’m willing to do just about anything to get out of this commitment. My policy is up October 19th this year. What can I do here to switch now without a penalty? Im not chaning insurance companies, just brokers. Any help?
March 7th, 2012 at 11:05 am
Hi Natalie,
If you are in Ontario, give me a call and I will try to assist you.
Generally speaking, you can switch brokers at any time. There is a letter that you have to sign called a “broker of record letter” … sounds fancy but it isn’t. Basically, it is a signed letter by you asking the insurance company to switch your policy from the broker you were with to the broker you want to be with. There is one slight catch – well 2 actually. First, that broker has to have a contract with that insurance provider in order for them to transfer the account to them and the second catch is this: about 99.9% of the time, broker letters are only accepted at renewal time. The reason for this is simple: getting paid. The insurance company pays the broker their commission at the beginning of the policy year and when a policy is taken over mid-term, the new broker doesn’t get paid and assumes the risk of claims.
There is no penalty to you to do this. If you cancel your policy midterm, there may or may not be fees involved.
March 7th, 2012 at 11:07 am
yes, you should be told about it but sometimes this doesn’t happen. In fact, the application itself doesn’t ever list the “exact price” for the insurance, rather it lists “estimated premium” which can change at any point.
March 26th, 2012 at 11:16 pm
Hi, I have been with a company Group insurance and was paying a reasonable rate per month. I left the company a few years ago and I don’t know if the insurance knows that I left the company. Should I tell them that I left that company and is there any penalty for not telling the insurance company? I really do not like the insurance company service but the rate is fine, a little less than other insurance company rate but if they charge me penalty I will go with another insurance company for sure and look for good service. What do you suggest me doing? Thanks for your help.
March 27th, 2012 at 12:54 pm
Hi, this is a great question. There isn’t really a penalty for not telling them but it will eventually come out – especially in the event of a claim. That being said, many people do what you do so there is a bit of a gray area here. With all the alumni programs, direct writers etc, surely there is another option for you? paying a little extra for service does come back in spades to you so that would be a great option for you. if you would like our assistance, please feel free to contact us!
good luck
March 27th, 2012 at 10:57 pm
Hi Claudio,
Thanks for answering our questions..
I have started my car insurance on July 2011 and I want to cancel my insurance in few days April 2011 ( I am moving to another company)
My current insurance company wants to charge me a month +admin fees , in addition to the last month payment that I have already paid upfront .. that’s toooo much !!! I checked the documents I received from them and nothing talks about the cancellation fees ?
what do u think I should do ??
Thanks.
March 28th, 2012 at 1:00 pm
without specific information located on your policy, i don’t know how to answer this one. Generally, the insurer has the right to charge whatever they wish as long as it is declared somewhere in the policy documents. There has to be some indication in the policy that outlines their cancellation agreement. If they are charging you that much, just wait out the policy and simply non-renew. You are then free to go to the other company.
Hope this helps.
April 23rd, 2012 at 9:30 pm
Hi Claudio,
Need advise please. I have called and cancelled my auto insurance and was told over the phone that they will cancel it. Was asked to send a fax stating that I want to cancel the policy and therefore I have.
Now, few months later, I noticed that they are still taking the full payment from my bank. Called them and was informed, yes, indeed they have a record that they have cancelled it, however, they didn’t get a written fax. I know I faxed it but somehow can’t find my copy. They said that they will discuss with the Underwriter about my file. What do you think I should do? Thank you.
April 24th, 2012 at 10:51 am
sometimes it takes a while for the paperwork to be processed. Resend the cancellation and also send over the confirmation sheet from your original fax. You can also put a stop payment on any future withdrawals for that bill. any money owed will be returned to you.
hope this helps.
April 27th, 2012 at 1:07 pm
Hi can you tell me is it illegal for an insurance company to cancel and not tell you. they say they sent a registered letter but when you ask for a copy they don’t have it. First they said they would send, several weeks later, they say they did not send registered letter but a letter, when ask for that nothing. How do i get this resolved.
Who can get Desjarding to committ to what is going on. Is there an Ombusmans office that cann help.
Please let me know e-mail above.
April 27th, 2012 at 1:14 pm
Hi Tim,
That is an interesting situation. If they sent a registered letter, someone had to sign for it. It isn’t illegal for them to cancel you as long as they have documented the proper steps which includes due notice. You can contact the financial service commission of Ontario : http://www.fsco.gov.on.ca/en/Pages/default.aspx
Hope this helps!
Claudio
May 2nd, 2012 at 2:43 am
Hello, I was with current car insurance company for more than 7 years, but during the last year I felt like leaving this insurance company because of the premium increase higher than at other car insurance companies and due to their customer service. Now that I am relocating I thought it would be a good opportunity to do so. There are two months payment is left before the annual insurance renewal. At the same time, the car insurance will be increased for $35/month due to the new location. Also, I have a claim with current car insurance company, and I am concerned that if I cancel car insurance policy with current car insurance company, my claim will be closed, and I would not see the pending amount in reibursement. Am I right in my understanding of the situation with the claim? Please advise. Thank you.
May 4th, 2012 at 11:02 am
no, just because you cancel the policy the claim will not be closed. The company has a responsibility to manage the claim professionally and will do so until a settlement is reached.
I hope everything goes well for you!
May 12th, 2012 at 11:57 am
We just bought a new car, and my partner has tried to contact his insurance agent numerous times in the last 2 weeks with the information for his new car and they have responded only once to ask for more info. We want to cancel this company because this is poor customer service and we don’t even know if we are insured on this car at the moment because we don’t recieve any response. Will we be penalized with early cancellation fee even though they’ve been basically ignoring us?
May 17th, 2012 at 11:38 am
I don’t know how long your policy has been in force nor do i know if there are any specific terms to the policy that you have – unfortunately, i cannot answer your questions. I would look at your policy documents which would outline and cancellation fees that you may be subject to.