When an auto insurance contract, the parties (policyholder and insurer) assume a commitment that is that the insurance company covers risk in exchange for payment of a sum of money, the premium. In the event of a claim, it will compensate the beneficiaries, in accordance with the provisions of the policy.
This commitment has a specific duration, which means that the parties, the policyholder and the insurance company, have the legal obligation to respect what has been agreed during the term of the insurance contract. In some insurances, in addition, renewal conditions agree upon that allow the contract. To extend in time automatically. As long as one of the parties decides to terminate.
This is the case, regardless of whether the insurance is paid in installments
A situation that leads to confusion for some people who think that it is enough to stop paying the installment of a period for the auto insurance to cease to take effect. If the insurance vali annually, it must pay in full. The contracts would breach. Just as in the case of a bank loan or a gas, electricity.
Insurance can cancel according to the provisions of the policy. That is, following the procedure and the deadlines set. It is usual that for the cancellation of the auto insurance the policyholder require to notify his wish weeks. Even months before the expiration so that the insurance company can process the cancellation.
There are special cases in which insurance can be canceled in advance. For example, in the case of insurance-linked to a loan, if the loan is amortized in advance. The insurance can cancel because it no longer has a reason to exist. It no longer has to guarantee anything against the beneficiary, which is the entity that grants the financing.
In addition, any life insurance that contract for a term greater than 6 months
It can cancel in the 30 days following its hiring without incurring any penalty. Having to return the insurance company the total amount of the premium.
Another option to cancel insurance in advance is that of a vehicle that is sold to a third party. With the policyholder being able to request a refund of the unconsumed premium. In the case of insurance contracted through the Internet. The contractor can cancel the contract in the first 14 days from the contract, without incurring any type of penalty or charge.
Finally, the insured may decide to cancel the insurance if the company applies changes to the policy (in the price. In the insured risk, etc.) that significantly modify it. In this case, you have 15 days to cancel the insurance without penalty.
In addition to the powers that the policyholder has to terminate an insurance contract. Insurance companies can also cancel it early. This can happen if the company detects some type of erroneous information in the insurance.
It may also happen that the company withdraws from the contract if the insured risk increases significantly. It not interest in keeping the policy. For example, canceling home insurance after major renovations to a home that increase risk; or by incorporating a new driver into auto insurance.