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Things to You Should Know about Car Insurance Policy Cancellation

It will not be wrong to assume that being without car insurance is losing one’s peace of mind. The owner needs to pay for any damage caused to or because of his/her car before understanding the consequences of not having car insurance.

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car insurance policy. There could be multiple reasons due to which you wish to cancel your car insurance policy. They could include the death of the owner or not being satisfied with the insurer’s services. In any case, it is possible to cancel the current car insurance policy. However, if you want to cancel a policy because it feels like an added expense, then you are making yourself vulnerable to direct financial losses arising out of mishaps.

What Happens If You Cancel Your Insurance Policy for Car?

A car insurance policy provides a host of benefits. The value of these benefits is so high that it cannot be compared to the cost you pay to get an insurance policy for a car. Here is what will happen if you opt out of car insurance:

Third-party Car Insurance policy is against the law. You cannot ply on Indian roads without car insurance. A car insurance policy is one of the documents you need always to have while driving your car. If you are found without car insurance, you will be fined Rs. 1000 and/or 3 years of imprisonment.

You Compensate the Third Parties

The logic behind making car insurance compulsory is the fair compensation of any third parties affected by your vehicle. If you don’t have car insurance, you will have to pay the compensation from your pocket. The amount of compensation is calculated basis the financial status and age of the affected third party. So, if your car hits a rich guy, and you do not have car insurance, you will have to pay an unimaginable price as compensation for repairs and well for the treatment of his injuries!

No Compensation for Theft

A Comprehensive Car insurance policy ensures that you are covered against the theft of your car. This means your insurer will pay the Insured Declared Value (IDV), i.e., an approximate market value of your car if it is stolen. With no insurance policy in force, you would bear a loss of the entire value of your car.

No Compensation Against Calamities

Apart from theft coverage, a Comprehensive Car Insurance Policy also offers a cover against natural or artificial calamities. Thus, your car is financially covered against earthquakes, floods, riots, vandalism, landslides, etc. If you face any of these without a car insurance policy, you cannot raise a compensation claim.

You Pay for Your Personal Injuries

Any car insurance policy compensates the policyholder for personal injuries suffered while driving the insured car. This is a helpful cover in accidents and emergencies where the owner himself/herself is injured. Without a cover, one needs to go through the hassle of paying the hospitalization charges.

You Pay to Get Your Car Repaired

With a Comprehensive Car Insurance Policy, your insurer will pay for the cost of repairing the insured car in case it is damaged. Without the policy, you need to pay this cost no matter how high it is.

The Bottom Line

As mentioned earlier, there could be many situations in which one needs to cancel a car insurance policy. However, it is important to buy a new car insurance policy as soon as you cancel the old one. Also, check with your insurer if you can get a refund for your existing policy and continue to avail of the No Claim Bonus with the new car insurance policy. Remember that insurance ensures minimum financial losses.

About author

I work for WideInfo and I love writing on my blog every day with huge new information to help my readers. Fashion is my hobby and eating food is my life. Social Media is my blood to connect my family and friends.
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