How to Drop a Car Insurance Carrier



When you buy car insurance coverage, this creates a relationship between you as the insured and an insurance carrier or company. The company carries the risk you will have an accident and make a claim. So long as you pay the annual premium, you have security against claims up to the amount set in the policy document. The good news is that contracts are not unbreakable. Both you and your carrier have the right to cancel the policy. This is called freedom of contract, i.e. you are free to decide whether to enter into the agreement and be bound by it. Once you have signed up, you decide how long you want the agreement to last.

Steps
Review your policy document. All aspects of the relationship are regulated by the policy document. Once you have accepted it, the policy is a binding contract. It contains all the relevant legal terms and conditions. Unfortunately, this document is usually written by a lawyer and is often quite difficult to understand.
To drop your insurance carrier, this means you must stay strong and read through the relevant parts to ensure you comply with all the requirements. If you try to guess what the policy tells you to do and get the requirements wrong, this can lead to you having to pay unnecessary administration fees and charges.

Know what you've committed to. The length of the coverage is fixed when you buy the policy. The usual minimum period of time is six months. It is unusual for the carrier to agree to cover you for more than twelve months without a renewal. The policy automatically terminates at the end of whatever period of time is set in the policy.

Wait it out. To drop the carrier, all you need do is wait until the period ends. The policy automatically terminates without the need for you to pay any fees or charges. Assuming you wish to continue driving and so need the mandatory coverage, all you need do is buy the cover you need from another carrier. There is no requirement for you to communicate with your old carrier.

Cancel ahead of time, if needed. If you do not want to wait until the policy expires, you must give formal written notice to the carrier that you wish to cancel the policy. Check the terms on cancellation. All policies set a minimum period of notice. If you fail to comply with this term, it can allow the carrier to impose administration charges.

Avoid non-payment. You do not cancel by failing to pay the monthly installment when it falls due. This failure to pay entitles the carrier to cancel the policy. You will be in breach of the contract and face administration fees and charges. Failure to deal with the insurer on these charges can hit your credit score and make it difficult to find another insurer prepared to offer you a policy. Insurance companies exchange information and, if you break a contract with one, it makes the others less willing to take your business.

Make sure you line up alternative coverage. If the requirement is to give fourteen days of notice, calculate when the policy will come to an end and, if you are going to transfer to another carrier, start getting quotes from that date.

Give the notice required by the policy. Assuming you comply with the policy, you will be entitled to a refund of the premium you have paid for cover after the notice expires. You need to liaise with the new insurer to avoid having a gap between the old and the new policies. To stay legal on the road, you must have a policy in force at all the times you drive on the public roads.

Seek help from your Insurance Commissioner if needed. If the old carrier delays refunding the insurance premium, complain to your local Insurance Commissioner.

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