Cancelling Insurance

[Malibook]

I don't know if you actually read what I wrote, or don't believe me, but it will depend whether a grace period is built into your contract. If not, I would not rely on goodwill at all - that's insane. The insurance company will laugh at you.

Here's some material from the Insurance Act of Ontario. I haven't traced through where all this is applicable, but gives you the idea about how grace periods work if applicable:

http://www.ontario.ca/laws/statute/90i08

Period of grace
(2) Where a premium, other than the initial premium, is not paid at the time it is due, the premium may be paid within a period of grace of,
(a) thirty days or, in the case of an industrial contract, twenty-eight days from and excluding the day on which the premium is due; or
(b) the number of days, if any, specified in the contract for payment of an overdue premium,
whichever is the longer period.

Contract in force during grace period

(3) Where the happening of the event upon which the insurance money becomes payable occurs during the period of grace and before the overdue premium is paid, the contract shall be deemed to be in effect as if the premium had been paid at the time it was due and, except in the case of group insurance or of creditor’s group insurance, the amount of the premium may be deducted from the insurance money. 2012, c. 8, Sched. 23, s. 17 (2).


Look at this CAA brochure for an example:

https://www.caaneo.on.ca/sites/all/files/CAANEO_MAPP Brochure.pdf

XIV. REINSTATEMENT OF INSURANCE – GRACE PERIOD
If insurance has terminated by reason of the non-payment of premium
on the premium due date, insurance can be reinstated subject to the
following conditions:

a. if the premium is paid within 30 days of day of the month in which
the premium became due (Grace Period), the reinstatement will date
back and be effective on the premium due date and be of the same
force and effect as if the additional premium had been paid by the
date it became due;

b. if the premium has not been paid within the 30 day Grace Period,
the Member cannot reinstate the insurance following the Grace
Period. A new policy will have to be purchased

All of this seems to apply to a late payment that must me made up within the grace period.

I find it hard to believe that the same is applicable for an ex-customer whose contract has expired and has moved on.
So no need to start paying for a new policy with a new company until the end of the current grace period?

Of course I would not expect any goodwill from an insurance company.
Quite the opposite.
They will try to screw you in any conceivable way and even make you pay to fight for your rights.

 

[benstt]

All of this seems to apply to a late payment that must me made up within the grace period.

I find it hard to believe that the same is applicable for an ex-customer whose contract has expired and has moved on.
So no need to start paying for a new policy with a new company until the end of the current grace period?

Of course I would not expect any goodwill from an insurance company.
Quite the opposite.
They will try to screw you in any conceivable way and even make you pay to fight for your rights.

They sent you a renewal notice letting you know what the new premium is, right? Not a notice of termination, right? Unless it calls out that they are terminating, they haven't terminated the insurance yet, and neither have you. They will terminate it after the grace period when they get no answer from you (and won't be happy with you.)


Here's an insurance guy that answers questions:

http://www.insurancehelp.ca/2007/10/30/how-to-cancel-an-insurance-policy-the-dos-and-donts/

How to cancel insurance:

b)** Stop paying your premiums – Does the job but NOT A GOOD IDEA!

Your policy will be cancelled but the aftermath will be different for the type of policy that you have, for example:

Auto & Home insurance – cancelled for non – payment: Not good at all to have on your record – may affect premiums in the future

Business insurance – cancelled for non-payment – Would you do business with someone who doesn’t pay you – insurance companies don’t look too kindly on businesses that don’t pay their insurance bills – it is hassle they aren’t fond of.

Life insurance – not paying your premiums is actually one of the few ways your “in-force” policy can be cancelled – still it is better to cancel in writing – it really gives you a chance to think about why you are cancelling and perhaps to speak to a representative to get advice.


Q:
Hi,
I would like to ask if home insurance automatically renews at the end of its term. I had a home insurance policy with Aviva. At the expiry of the one-year term, I no longer needed the insurance but took no action, thinking that the insurance would simply expire on the date stated on the contract. Soon after, I received a notice of cancellation from the company and a request for payment for the additional “time on risk” that extended beyond my initial term. The contract itself did not indicate that the insurance would automatically renew, so I am confused as to why I was insured beyond the initial one-year term. Is this normal?
Thanks!

A:
yes the policies renew automatically for the protection of all the parties involved. In order to break the contract, there must be written request to break the contract. The request can come from you or the insurance company.

 

[Malibook]

Cancelled for non-payment in the middle of a contract does not equate choosing not to accept a renewal offer at the end of a contract.

Quite often a renewal quote is higher, sometimes much higher, and the insurance companies don`t have a blank cheque to jack up your rates and unilaterally automatically renew a policy without consent.

I suspect that claims made on policies that are delinquent in payment can be quite difficult and potentially costly to collect.
They may gladly take the payment later but that doesn`t mean that they would have gladly paid such claims.
For claims made on expired contracts of ex-customers, even more so.

Perhaps I am just cynical and there are no potential issues but I would feel vulnerable in such a position.

 

[SkyRider]

They sent you a renewal notice letting you know what the new premium is, right? Not a notice of termination, right?

I was under the logical assumption that the insured party has to explicitly consent to accept the new premium (usually higher and often much higher) and revised terms (e.g. higher coverage). Otherwise, the contract dies on the contractual expiry/maturity date. I wonder whether contract law would say that an insurance contract automatically renews when the insured has not explicitly consented to a renewal (sounds like the old Rogers "negative billing").

 

[benstt]

Cancelled for non-payment in the middle of a contract does not equate choosing not to accept a renewal offer at the end of a contract.

If you are having doubts, dig up the detailed contract and read it, and see what the renewal fine print is, or read the act.

http://www.infoinsurance.ca/en/vehicle/automobile/renewing-policy/

Your policy is automatically renewed

Your insurer is required to send you a notice of renewal 30**days prior to the policy maturity date. If you do business with a broker, then it's your broker who sends you the insurer's renewal notice. If you don't reply, your car insurance policy is automatically renewed.

Your insurer may also decide not to renew your insurance policy. If that's the case, you'll receive a notice of non-renewal. Why? Perhaps you haven't paid your premium. Or you've made a high number of claims.