If you're selling your car, you may have some questions about whether or not you can cancel car insurance before your insurance contract comes to an end and whether there are any consequences for doing so. To make sure you've got the details you need to handle this process correctly, take a quick glance below for more information!
Reasons why you may want to cancel your car insurance
There are several reasons why a policyholder may choose to cancel their coverage before the end of their insurance policy:
- There are better coverage options out there for a more affordable price.
- The policyholder has sold their car, and they decide not to purchase a new vehicle.
- You want to bundle your policies to cover all of your cars.
- You are not happy with what your policy covers and want to find a new policy that better fits your needs.
Can you cancel your auto insurance policy before it expires?
Yes, cancelling an insurance policy early is possible if you sell your vehicle and aren't planning on buying a new car. However, it's important to keep in mind that your early insurance cancellation may come with a cancellation fee if your existing policy term has yet to come to an end.
The best thing you can do before moving forward with your cancellation is speak with your insurance company as they can provide you with more information about whether you'll need to pay fees beforehand.
Do I get my money back from my insurance company if I cancel my car insurance?
Drivers in Canada mayget a refund from their insurer if they choose to cancel their insurance. Depending on who they're insured by, insurers either use a pro-rata or short-rated method to issue your money back to you. With a pro-rated method, your company will give you a full refund for the remainder of your policy you haven't used. On the other hand, a short-rated method will account for cancellation fees before giving you the rest of your money back.
Will my insurance premium increase after I cancel my car insurance?
Should you cancel your car insurance and then need a new insurance policy in the future, the chances of you paying higher premiums are slim unless there is something in your driving history that could be deemed high risk to your new insurer. That being said, changing policies does come with the risk of fluctuating premiums due to things like inflation, your driving experience, which insurance provider you choose, your coverage limits, and more. As such, before purchasing any new policy, make sure you compare costs and find the best option for your budget.
Do I need to transfer ownership if I sell my car in Alberta?
If you're selling your car to someone in Alberta but live in another province, you may have some questions about whether transferring ownership in Alberta is required. The short answer is yes. You need to transfer ownership of your vehicle to the individual you've sold it to, regardless of whether you live in the same province or not. Vehicle ownership is determined by a vehicle title, which is a document that lists who the new owner of the car is. The name on the vehicle title should also match the auto insurance policy in case you are ever pulled over. So, when you purchase a new car and sell it, you'll need to transfer the title regardless.
Can I keep my car insurance policy if I sell my car?
If you sell your vehicle and plan on buying a new car, you will be able to keep your current policy. Normally, insurance companies provide you with a grace period to register your new vehicle and have the insurance papers transferred to it.
What to do before cancelling your auto insurance policy
Before cancelling your insurance policy, there are a couple of steps you need to take before the sale of your car:
1. Review your current policy
The first thing you need to do is take a look at your car insurance documents. They may outline a protocol that you'll need to follow to successfully cancel your policy.
2. Contact your insurance company
Once you've reviewed your documents, you can then contact your insurance company. Let your insurer know that you're selling your car and would like to cancel your policy moving forward. An insurance agent may ask you to provide proof of your sale and transfer papers for their records. However, this will depend on your insurer.
3. Sign your cancellation letter
Once the cancellation is complete, your insurer will ask you to sign cancellation papers. This document will confirm that you are no longer protected by the company.
4. Pay your cancellation fee
Again, depending on your provider, you may be asked to pay a fee to cancel your coverage before the term has ended.
5. Request a copy of your signed documents
Once the fee is paid, ask your provider for a copy of the cancellation documents and keep them handy in case you're thinking about getting insurance after a cancelled policy in the future.
Protect yourself behind the wheel with these auto insurance policies
All cars in Canada require car insurance to legally operate on Canadian roadways. To ensure that you're protected while behind the wheel, purchasing a car insurance policy that's affordable and covers your unique needs is vital. Here are some of the types of auto insurance the experienced brokers from BrokerLink can help you acquire from Canada's top insurance companies:
Contact BrokerLink for affordable insurance coverage today
Whether you need to cancel your car insurance or require an expired car insurance renewal, the BrokerLink insurance team is here to help. Our team of brokers have years of experience and access to some of Canada's top insurance companies, which means we can help you save on multiple auto insurance policies.
With locations across the country, BrokerLink is pleased to live and work in your neighbourhood. If we're close by, feel free to come into one of our offices to work with a broker in person. You can also contact us over the phone during business hours to speak with one of our team members! Alternatively, you can use our free online quote tool for a competitive car insurance quote in minutes--right from your device!
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