What You Need to Know About Cancelling Car Insurance in Canada

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In Canada, it’s illegal to drive without car insurance, so you have to think carefully before you cancel your policy. If you’re cancelling car insurance because you’re selling your car and aren’t looking to buy a new one in the foreseeable future, you’ll likely be able to similarly terminate the plan. However, if you’re cancelling your policy because you’re shopping for better rates or are moving to a different province or territory, you’ll have to consider having another car insurance place ready for when you cancel your old one.

How to Cancel Car Insurance in Canada

The steps to cancel car insurance are as follows:

Check Your Policy

Each provider will have unique terms and conditions stated in the contract that governs how to go about cancelling your policy. Go through your contract to determine the steps.

Talk to Your Car Insurance Provider

You must notify your car insurance provider of your intent to cancel. Call them to tell them about your decision and ask if there are any other requirements that you’ll need to fulfil to proceed. Depending on the terms of your contract, you may have to pay some fees.

Sign the Papers

Make sure that your cancellation is written on paper and that you and your insurance provider have the necessary documents for reference.

FAQs About Cancelling Car Insurance

Here are some answers to frequently asked questions about car insurance cancellations:

Can I cancel my insurance anytime?

In some cases, you can cancel your insurance at any point in your contract, though it’s always best to check with your policy agreement to see if there are guidelines and limitations related to cancelling your plan. That said, it’s best done at the end of the term since insurance companies don’t usually charge policyholders any extra amounts. Mid-term cancellations typically incur cancellation fees.

How much will it cost to cancel my insurance?

How much you pay to cancel your insurance will depend on factors like the time remaining on your policy, outstanding payments, non-refundable fees, and your insurer’s rating policy (short or pro-rating). The closer you cancel to your renewal date, the less you can expect to pay.

What information do I need to cancel my insurance?

To seamlessly cancel your insurance, be ready to provide the following information:

  • Your policy number
  • Personal information, including your full name, birthdate, and Social Insurance Number (SIN)
  • Details of your new insurance, such as provider, policy number, and effective date (if you’re changing providers or as legally required)
  • Proof of plate forfeiture or bill of sale (if you’re selling your car)

Can an insurer cancel my policy?

Your car insurance provider may cancel your policy due to payment or collection issues related to tickets, claims, or the use of the insured vehicle. You don’t want this to happen as it forces you to resort to high-risk insurance plans, which are much more expensive than standard ones.

Final Thoughts

Cancelling car insurance is an easy process in Canada, but it’s best to properly determine the right steps to do it and consider its legal and financial implications.