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One of the biggest questions that arise when taking out insurance is how to cancel car insurance and what steps to follow.

Typically, people look for how to cancel their car insurance in times of financial difficulty or when there is no longer any interest in continuing with the insurance.

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According to the National Council of Insurers (CNSeg), car insurance cancellation rates increased with the pandemic, reaching 12.8% at the peak of the pandemic.

Based on this information, let's talk about how to cancel car insurance and all the details you need to know before starting the cancellation process.

What are the steps to cancel car insurance?

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Auto insurance cancellation

According to the Superintendence of Private Insurance (SUSEP), the cancellation of car insurance consists of the early dissolution of the insurance policy, and can happen on the part of the insured and the insurer.

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In the case of cancellation by the company, it can happen for two reasons, namely:

  • Default or non-payment of insurance amounts and installments, especially if you are paying the first installment;
  • Total loss of the vehicle or theft, where it is not possible to recover the insured vehicle. In this case, the company may request the cancellation of the insurance after payment of your compensation.

In this last situation, cancellation occurs due to the fact that the insurance company understands that there is no longer a vehicle to insure against this type of situation.

Furthermore, the amount to be refunded must be proportional to the covered period, which is calculated by your insurer, based on the Short Term Table, which we will discuss later.

If the customer cancels their car insurance, the reasons may be diverse, such as financial difficulties, unforeseen circumstances, among others that prevent the customer from paying for the insurance.

Therefore, you can cancel your car insurance at any time, as long as the policy clauses are respected.

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Once you have decided to cancel your car insurance, you must contact your insurance company and follow the steps below.

How do I cancel car insurance?

First of all, it is important to remember the process for canceling car insurance may vary depending on your insurer, however there are some basic steps that can be followed.

Therefore, the first step to canceling your car insurance is to contact your insurance company or your insurance agent to communicate your desire to cancel.

Next, the conditions and clauses of your contract will be evaluated to verify the limits, fees and cancellation procedures.

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Furthermore, in some cases, the insured may receive part of the premium in cash or in installments, and therefore it is necessary for the insurer to calculate the amounts to be paid.

Therefore, the value of the premium is based on a period of 12 (twelve) months, being divided into smaller installments.

For example, if you paid for 15 months of the contract, but only used 4 months, you will be entitled to receive the amount proportional to the remaining 11 months of the contract.

The important thing is that you understand that the amount to be received is proportional to the remaining months, since with the cancellation, you will no longer use the insurance company's services.

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However, the calculation of amounts payable is based on the Short Term Table, as per the following topic.

Short term table

The Short Term Table was created by SUSEP to serve as a reference for premium calculations, considering time in days.

For example, let's say you contracted coverage for R$1,800.00, which was divided into 06 (six) monthly installments of R$300.00. However, you only paid 03 (three) installments.

Therefore, the calculation would be as follows:

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  • Amount actually paid: R$300.00 (monthly fee) x 3 (monthly fees paid) = R$900.00;
  • Premium due: R$ 1,800.00;
  • Calculation: R$900.00/R$1,800.00 = 0.5, which corresponds to 50% of the prize value.

According to the Short Term Table, your insurance coverage is valid for a period of 120 days.

However, to find out the amounts to be returned or paid, you must consult your insurance company and check the Table with the help of your insurance consultant.

Furthermore, it is important to remember that there is no fee for canceling car insurance or fines for breaking the contract.

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However, you must be aware of the clauses of your policy, so that you are up to date with your duties and receive your rights, in accordance with the cancellation rules.

Although you already know how to cancel your car insurance, the ideal is that you are always insured, so as not to take risks and be exposed to accidents.

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