Many of us have our own reasons as to why we might be cancelling a policy. You might be swayed by an interesting ad to switch or you’re just unhappy with the services of your current insurer. Whatever the reason, always make sure you’ve exercised due diligence.
Today, there is a vast number of car insurance companies. In most cases, each one of these companies offers what seems to be a lucrative offer to the other. In such a scenario, cancelling your current policy is easy but requires caution. In Ontario for example, you are likely to find insurance ads on the best car insurance quotes in Canada; which in turn triggers the urge to switch.
Whenever you have intentions of cancelling auto insurance, there are things you need to consider. Some of those factors include:
Early cancellation of an insurance policy always comes with related costs. When you sign up to a certain auto insurance policy, you subscribe to certain terms and conditions as stipulated by the policy. Therefore, at the point of cancellation, insurance companies handle the issue based on the terms provided.
Companies offering car insurance in Canada have their own policies regarding coverage cancellation. What is common though is that, every cancellation come administrative costs and premium losses. Insurance companies use two methods to process refunds: short-rating or pro-rating.
Fees and down payments for starting a new auto policy
Whenever you start a new policy, one incurs administrative charges and is also required to remit a certain amount inform of down payments. These fees together with the cancellation charges initially incurred can prove too much at times. Therefore, it is very important to carefully consider this option before requesting for auto policy cancellation. Take sometimes to research and find out exactly how much the switch will cost you in order to avoid any kinds of surprises.
Most ideal time to shop for car insurance
It’s always prudent to shop around for new car insurance once you start approaching your renewal point. That way, you can be sure of avoiding any sort of cancellation penalties. In a nutshell, cancelling on renewal will give you a smooth transition to a new policy.
What if you are really unhappy and you’re not even close to your renewal? The best thing to do in such a situation is to compare car insurance rates offered. It will help you know whether indeed you are overpaying. Add up all the costs related to cancelling, the cost of a new policy and compare them to premium saving. If it results to saving, then cancelling early is the right choice.