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Inform the insurer immediately when you decide to cancel the policy. Insurers prefer at least 15 days’ notice to begin the cancellation process. The cancellation process is easy and can be done within a week.

Usually, insurers require a declaration letter from you(the policyholder) stating your intent to cancel the policy. Cancellation process can also be done via email, depending on the insurer. The insurer will approve the cancellation of your car insurance policy once you have completed the necessary steps as per the policy guidelines.

To avoid a gap in your car insurance coverage, apply for a new insurance policy (from a different/new insurer) simultaneously while you request a cancellation of your existing policy. Upon submission of the written request for cancellation, the insurer will send you the cancellation notice along with any refundable amount of the policy.

If you cancel the policy within the completion of a policy year, the insurer is liable to refund the remaining premium amount for the left-over period. For example, if you have paid Rs.30,000 for one policy year, and you decide to cancel the policy after 8 months, you are liable to receive a refund for the remaining 4 months.

Make sure that you collect all documents pertaining to the cancelled car insurance policy so there is no problem in the future.

Finally, make sure that you do not forget to transfer your no claim bonus, if any. The NCB discount can be availed on the new car insurance policy which will reduce the premium amount.

We caution you against shifting your existing car insurance policy to a new insurer just because the offer is cheaper. The decision to cancel your car insurance policy must not be taken lightly. Instead, it must be based on evaluating all factors involved such as enhanced coverage, upgrading to a new model, customer service offered, ease of filing a claim, etc.

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