Car insurance is a crucial financial safeguard for car owners, protecting them from unexpected losses resulting from accidents, bodily harm, or even demise. The Indian Motor Vehicles Act of 1988 mandates third-party insurance for all vehicles on Indian roads, emphasising its significance. However, certain circumstances may necessitate the cancellation of insurance policies.
Causes For Terminating Car Insurance
After You Sell The Vehicle
Car insurance policies typically have a one-year validity period. If you decide to sell your car, you can cancel the policy for the remaining time. Some plans offer up to five years of additional coverage, making it practical to cancel the remaining term.
Issue Relative To The Insurance Provider
Switching insurers due to dissatisfaction is a common reason for cancellation. Before making the switch, careful consideration is needed, as certain companies may impose conditions on changing insurance. Thoroughly weigh the options before cancelling.
Additional Factors
Other reasons for cancellation may include car theft (without comprehensive coverage) and vehicle scrapping due to age.
How To Terminate Your Car Policy
If you are sure about cancelling the insurance policy, contact your insurance company and follow their recommended protocol. Different providers may have varying procedures, but a letter of declaration initiating the process is a common requirement. If selling the car prompts cancellation, documentation, such as the sale deed, might be necessary.
Procedure For Refunds
The refund process commences upon meeting the cancellation requirements. If applicable, the insurance company sends a cancellation notice and refundable amounts, including the No Claim Bonus certificate. Car insurance cancellation typically takes two weeks.
A complete refund is issued, minus applicable service charges, if cancelled before the policy term starts. A pro-rata refund is provided for the remaining months if cancelled within the policy term.
Cancellation Of Long-Term Car Insurance
Many opt for long-term comprehensive policies for better terms. If termination becomes necessary, the refund is calculated based on the total upcoming years, pro-rata for the cancelled year (assuming no claims), and no premium refund if a claim is filed that year.
Request A New Policy
After cancelling, securing a new policy promptly is crucial for legal driving. Driving without insurance is illegal and can result in fines or jail time. A comprehensive insurance plan covering own damage and third-party liabilities is advisable for new policies.
Renewal Of Car Insurance Policies
Regardless of cancellation or expiration, renewing car insurance is essential. The car insurance renewal process is straightforward and can be done online or offline. Researching and understanding the details of different insurance schemes is crucial for choosing the ideal option. You can utilise a car insurance premium calculator to estimate the cost of premiums to be paid. Claims are subject to terms and conditions set forth under the motor insurance policy. *
While third-party car insurance online is mandatory, certain situations may necessitate cancellation. In such cases, securing a new policy promptly is imperative. Whether choosing to renew or obtain a new policy, understanding the intricacies of insurance schemes is crucial for optimal coverage. Insurance providers offer personalised benefits to enhance coverage value. In conclusion, responsible and informed decisions regarding car insurance contribute to a secure and legally compliant driving experience. Claims are subject to terms and conditions set forth under the motor insurance policy. *
*Standard T&C Apply
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.