Cancellation of car insurance by the insurer: understand!

Did you know that your auto insurance policy can be cancelled by your insurance company? If you fail to comply with your contract or fail to meet certain requirements, you may be left without protection. Find out everything you need to know in this article!

Cancellation of auto insurance by the insurer is something that can happen when the consumer does not seem like an interesting deal for the company.

Either because he suffers constant accidents, or because he disregards the protection rules.

In these cases, the insurer may choose to terminate the policy or not renew it. However, this does not mean that the cancellation can be made without prior notice or arbitrarily.

Below are some rules that need to be followed for this to happen.

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When does the insurer cancel auto insurance?

As mentioned, there are some situations in which the insurance may be canceled or not renewed by the protection company.

However, the consumer must be notified in advance, with a justification for the action. The rules are defined by Susep (Superintendence of Private Insurance).

Below are the cases in which your car insurance may be cancelled by the insurer.

False statements

When a consumer is going to take out insurance, they need to fill out a form. The information requested includes an assessment of the vehicle's usage profile and that of its driver.

It is through them that the car's accident risks can be assessed.

Some information can make insurance more expensive, such as the fact that the car is parked on the street all the time.

After all, this increases the chances of the vehicle being stolen or robbed, and the consequent need for the insurance company to pay compensation.

The big problem occurs when, in an attempt to make the insurance cheaper, the user chooses to lie on the form. Or, by omitting some information, as a way of taking advantage of the insurance company.

When it is found that this false information may, in some way, interfere with the insurance, it is possible that it will be interrupted by the insurer.

This often occurs after a claim and, if the claim is cancelled, the consumer must bear the losses alone.

Full compensation

When the vehicle is stolen or robbed and cannot be recovered, or when the car is completely lost due to an accident, the insurer pays full compensation and terminates the insurance policy.

In this case, the insurance is not cancelled, but rather terminated. This happens because there is no longer any vehicle to insure, and therefore there would be no reason to continue with the service.

The user will be able to purchase new protection for the car purchased with the compensation.

It should be noted that a total loss occurs when the costs to repair the car are greater than 75% of its market value.

Full compensation corresponds to the total cost of the vehicle determined in the policy. It is paid after deducting any outstanding insurance installments, if any.

Lack of payment

As with any service, failure to pay can lead to suspension or even cancellation. Insurance is no different.

If the customer is late in making the payment and the car is involved in an accident during this period, he will not be insured until the debt is paid off.

Therefore, if you realize that you will not be able to pay the installments on time, negotiate the amounts urgently with the insurance company.

When it comes to the first installment of the insurance, if the amount is not paid by its due date, the contract is automatically cancelled.

Maximum Compensation Limit

Imagine that the value of your vehicle's damage exceeds the maximum amount stipulated in the contract. Or, the sum of all compensation already paid under that contract exceeds the limit.

In these scenarios, the insurer will pay the maximum compensation determined. The remaining costs will be your responsibility. The insurance policy will then be canceled.

Clauses in contract

Each insurance company may also determine specific situations in which the insurance will be canceled. Therefore, it is essential to pay attention to the contract and follow all the rules listed there.

What to do in case of cancellation?

Car insurance cannot be canceled “out of the blue” by the insurer. First, the consumer must be notified of the termination of the contract and receive a justification.

Some companies allow the user to make adjustments to maintain the policy, such as updating the information on the form. Others will simply notify the user and end the protection.

If the insurance is cancelled and the person wishes to keep the car protected again, they must take certain measures, depending on what led to the cancellation.

In the case of default, for example, it is necessary to negotiate the amounts and keep payments up to date.

If theft occurs and full compensation is paid, it is possible to purchase a new vehicle and insure it. In this case, a new policy will be taken out with new conditions.

It is important to note that, if the insurance company cancels the insurance, the consumer must receive back part of what was paid for the protection. The return will be proportional to the unused time of the contract.

In the case of risk form declarations, it is always necessary to provide only true data. This way, there will be no problems regarding the payment of compensation.

When a consumer lies or omits data, they commit fraud and may even be sued by the insurance company.

If your car insurance has been cancelled by the insurer, pay attention to your new contract.

Before renewing your insurance with the same company, get a quote at Afrilatest and see what other insurers can offer!

Can I cancel my car insurance?

If you are no longer satisfied with your auto insurance, the consumer can also request the cancellation of your policy.

This is at the end of the contract, or even during its validity. Cancellation is also indicated when the vehicle is sold.

To cancel, the insured must contact the insurance company. Preferably by phone or email, which are more direct channels. By informing them of their desire, the user will need to negotiate their exit from the policy.

In case of problems, the individual can seek assistance from Susep, or even a lawyer.

To formalize the request, some documents are requested. The policy will then be canceled after the estimated negotiation period.

In the event of cancellation by the insured, the consumer is also entitled to part of the amounts already paid.

The amounts will appear in the “Short Term Table” of the contract, and will vary by company and by service previously contracted.

Now you know how the cancellation of auto insurance works, both by the insurer and the insured. Remember to always read your policy, and count on the assistance of Susep, if necessary.