Automotive

Strategy for minimizing cost for cancelling insurance mid-term?

  • Last Updated:
  • Apr 3rd, 2019 2:40 am
Deal Addict
Jan 26, 2016
2240 posts
2272 upvotes
Toronto, ON

Strategy for minimizing cost for cancelling insurance mid-term?

Hi,

Do you have any idea how to reduce penalties for cancelling auto insurance midterm?

I am thinking of changing insurance to fire/storage type, this reducing premium, and then calling next day to cancel. Do you think this will work? Anybody done this before?

Otherwise I am looking at $200 cancellation fee, which I obviously like to minimize.

Thanks!
12 replies
Deal Expert
Aug 22, 2011
41788 posts
30051 upvotes
Center of Universe
Try it and let us know how it goes.
Newbie
Dec 23, 2012
69 posts
51 upvotes
You should just be honest with them from the start about what's going on and why you need to cancel. Don't play games with them by changing things and then canceling. Just be honest and upfront. You'll be shocked at what people will do for someone who isn't trying to game the system.
Deal Addict
Aug 24, 2007
2732 posts
3018 upvotes
Ottawa
Pretty sure that you will still be charged the full penalty as you had with the full coverage. This belief is based on the fact that you have to keep fire and theft on for 30-60days (depending on company) and if you revert back to full coverage before that 30-60 days, you wouldn't have gotten any discount.
Deal Fanatic
Jul 26, 2007
7579 posts
5272 upvotes
Toronto
If you have 2 cars or if you can add 2nd car to your policy, you can remove 1 car without penalty.
Deal Fanatic
User avatar
Aug 11, 2008
9505 posts
1457 upvotes
Ontario
some companies will not allow the reduction to fire & theft only when you have only 1 vehicle on the policy. Even if they did, the reduction in "time on risk" fees wouldn't be very much as it would only be 1 day of the change in coverage
WinterSleep wrote: Hi,

Do you have any idea how to reduce penalties for cancelling auto insurance midterm?

I am thinking of changing insurance to fire/storage type, this reducing premium, and then calling next day to cancel. Do you think this will work? Anybody done this before?

Otherwise I am looking at $200 cancellation fee, which I obviously like to minimize.

Thanks!
RIBO LICENCED INSURANCE BROKER, over 35 years experience
Sr. Member
Feb 25, 2004
590 posts
274 upvotes
the only way I know of is saying you sold the car. Obviously they can't penalize your for that but that's at the discretion of hte insurer
Deal Fanatic
Jul 26, 2007
7579 posts
5272 upvotes
Toronto
kyfe wrote: the only way I know of is saying you sold the car. Obviously they can't penalize your for that but that's at the discretion of hte insurer
You will still get penalized for cancelling early, car or no car.
Deal Addict
Aug 20, 2007
1983 posts
794 upvotes
Kitchener
As Cosmic stated, if you only have one car its not likely they will allow it to go down to comp only. What you are thinking though generally would work in reducing your cancellation premium as the short rate table that companies use leverage a % that is applied to the amount owing, so if you reduce the amount owing by going to comp only first and then cancel, it should reduce the short rate penalty.
Deal Addict
Aug 20, 2007
1983 posts
794 upvotes
Kitchener
kyfe wrote: the only way I know of is saying you sold the car. Obviously they can't penalize your for that but that's at the discretion of hte insurer
That's incorrect, if you cancel the policy mid term, regardless of reason short rate applies. So saying you no longer own the car, would be the same as telling them you moved insurance companies and wanted to cancel. Canceling the policy is cancelling the policy, regardless of the reason.
Deal Expert
Aug 22, 2011
41788 posts
30051 upvotes
Center of Universe
kyfe wrote: the only way I know of is saying you sold the car. Obviously they can't penalize your for that but that's at the discretion of hte insurer
Nope and while we did insure a newer vehicle mid term, our premium was a continuation for the remainder of the year.
Deal Addict
Jan 26, 2016
2240 posts
2272 upvotes
Toronto, ON
Guess will have to wait till the end of term

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