How Can Insurance Be Canceled?

Insurance can be canceled by you, an additional named insured and by the insurance company. You can cancel your policy by sending a notice in writing to the insurer. You send this to your broker, agent or directly to the insurer. A telephone call stating your intention to cancel is not enough to get it done. If there is more then one person named on a policy then all parties will have to sign the cancellation. You might cancel your policy because you are replacing the insurance, no longer need the insurance or cannot afford to continue the insurance.

The insurance company can cancel a policy if the premium is not paid. An insurance company will send out a notice to you that a premium is due on a renewal and will advise that if it is not paid the policy will lapse. The insurer will normally allow sometime for the payment to be received in the mail.

A policy can be canceled due to a change. If the change is something that the insurer considers a material change of risk then the policy can be canceled. The insurer may give the policy holder the option to cancel or they may proceed with cancellation themselves. If this is a case of deliberate misrepresentation then the policy can be declared null and void.

If you are dealing with an agent or broker they should be notifying you of a lapse in coverage and/or cancellation. The agent or broker should be offering to replace the insurance or directing you to another broker or agent. It is important to keep your insurance company advised of your current address as all mail will be sent to your last known address.

The insurer can cancel by mailing a registered letter to your last known address at least 15 days before the effective date of cancellation. If the letter is delivered in person then the time is shortened to five days. Be aware that your failing to pick up the registered letter does not reverse the cancellation. The duty of the insurer is to inform you by this method - no more is required of them.

If you do get canceled by the insurance company then you must receive an explanation as to why this has happened. It could be non-payment, misrepresentation of a material change of risk or that your situation no longer fits the criteria for that insurance company. If you deal with a broker or agent then they also have a duty to advise you of your options.

If things are not going well for you then be aware that it is always better for you to cancel your insurance before they cancel you.

Quebec has different rules then the other provinces and territories – the policy cancellation takes effect 15 days after receipt of a registered letter at the post office to which it is addressed.