Nearest broker: Searching for a broker nearby…
Nearest broker: , Edmonton, AB Phone: 780.755.0110 5020 Lac St Anne Trail N, Onoway, AB, T0E 1V0 Phone: 780.967.2282 , Edmonton, AB Phone: 825.467.5631 206 Pembina Rd, Sherwood Park, AB, T8H 0L8 Phone: 780-732-8616 10060 Jasper Ave, Edmonton, AB, T5J 3R8 Phone: 780-435-3632 , Calgary, AB Phone: 403-532-4882 322 Avenue C S, Saskatoon, SK, S7M 1N4 Phone: 639-398-4170 5317 50 Ave, Taber, AB, T1G 1V3 Phone: 403-223-2377 110a McLeod Ave, Spruce Grove, AB, T7X 2H8 Phone: 780-571-1144 496 Marquis Rd, Prince Albert, SK, S6V 8B3 Phone: 306-970-8080 335 Hwy Avenue N, Picture Butte, AB, T0K 1V0 Phone: 403-732-6023 2201 Box Springs Blvd NW, Medicine Hat, AB, T1C 0C8 Phone: 403-487-5132 550 Wt Hill Blvd S, Lethbridge, AB, T1J 4Z8 Phone: 403-394-1123 734 13 St N, Lethbridge, AB, T1H 2T1 Phone: 403-328-9114 5 St SE, High River, AB Phone: 403-652-4104 9904 103 St, Fort Saskatchewan, AB, T8L 2C9 Phone: 780-998-0881 201-4271 23 Ave NW, Edmonton, AB, T6L 5Z8 Phone: 780-466-2136 3908 97 St NW, Edmonton, AB, T6E 6N2 Phone: 780-465-6900 8170 50 St NW, Edmonton, AB, T6B 1E6 Phone: 780-469-9378 52 Ave, Drayton Valley, AB Phone: 780-621-1707 1331 Macleod Trail SE, Calgary, AB, T2G 0K3 Phone: 403-278-1050 1331 Macleod Trail SE, Calgary, AB, T2G 1E1 Phone: 403-255-2252 234-7 Westwinds Crescent NE, Calgary, AB, T3J 5H2 Phone: 403-775-2100 , Calgary, AB, T3K 0S8 Phone: 403-719-9995 5114 2 St, Boyle, AB, T0A 0M0 Phone: 780-689-3946 50 Ave, Bonnyville, AB Phone: 780-826-3147 12931 20 Ave, , AB, T0K 0E0 Phone: 403-562-2191 2903 Kingsview Blvd SE, Airdrie, AB, T4A 0C4 Phone: 403-945-8885

Can I cancel my car insurance at any time without penalty?

Auto Insurance

By Joanne Lemna | September 10, 2016

If you’re looking to cut costs or have just sold your vehicle (but haven’t yet bought a new one), you may decide to cancel your car insurance. But can you cancel your car insurance at any time without penalty? Will it impact your future car insurance rates?

First off, yes, you can cancel your car insurance at any time. Insurance companies will handle your cancellation based on the terms laid out in your policy documents. It will also depend if you pay monthly, annually, or bi- or tri-annually. If you pay monthly, you may need to pay for that month’s coverage and an administrative or cancellation fee. It can take some time to process a cancellation, so if you’ve been charged after cancelling, you may also receive a refund.

If you pay annually or are on another type of payment plan, you will receive a refund minus any administration or cancellation fees.

If you cancel ahead of time for your renewal or expiry date, you won’t be charged anything. However, most of us aren’t that good at timing!

How are penalties charged?

Insurance companies generally use two basic methods to process refunds on a cancelled policy: pro-rating and short-rating.

A pro-rated cancellation gives you back the full amount of the unused premium. A short-rated cancellation takes a certain amount out of the refund as a penalty for early cancellation. For instance, if you have an annual policy and cancel after only three months of coverage then you will get back nine months worth of premium on a pro-rated system. If the insurance company is short-rating the cancellation, you will receive nine months worth of premium minus cancellation fees. These are administration fees that are paid by the person requesting the early termination of the coverage.

Can I just cancel my automatic monthly payment?

With car insurance, many people choose to spread the cost by paying monthly. What happens though is that some drivers assume that by cancelling this automatic monthly payment they’ve cancelled the policy. That’s not the case. An insurance policy is in effect until you formally notify your insurance provider that you want to cancel. This cannot be done over the phone and typically must be done in writing. Talk to your broker or insurance company directly if you want to cancel your car insurance.

Cancelling Your Car Insurance

Remember that if you own a vehicle, it must be insured if you drive it or park it on public roads. You will also have a gap in your insurance history if you cancel your insurance and plan to purchase another vehicle and go to insure it again. A short gap isn’t a big deal, but an insurer may be concerned if it’s a long one as they assume you haven’t been driving. You may want to consider simply reducing your coverage to essential liability protection if you’re planning on owning a vehicle again or parking yours on public roads.

Your broker can help you cancel your car insurance and provide advice tailored to your situation. They’re there to help and answer your questions.

Get A Quote From A-WIN

Get the best insurance deals and stay on budget.

Get A Quote

Life Events - It's Time to Reassess Your Insurance

Whether it’s heading off to university or deciding to start your own business,...

Download

Rogers Insurance and CapriCMW merge to become Acera Insurance.

A-WIN Insurance is part of the Rogers Insurance Group.

Click to learn more about how this merger will impact A-WIN Insurance. Our branches will remain independently owned and operated.