We have earlier commented on the cancellation of a car insurance policy. We discussed the fact that an insurer is within its rights to notify an insured client that his cover is to be terminated. It is important that the client approaches this scenario cautiously, considering the impact of such cancellation!
What are the negatives of cancellation of my policy?
- A cancellation may have an impact on the ability to find cover elsewhere.
- The client will have to make disclosures to the new insurer pertaining to his insurance history.
- The potential new insurers will ask about previous claims or losses, and also about any cancellation of previous policies.
- The new proposed insurer may regard a previous cancellation as a disincentive and might assume that the client posed too great a risk to the previous insurer.
This however does not need to be seen only in negative light. There are many different insurers providing solutions to the needs of clients. How the client goes about getting the correct cover can provide not only financial benefits – but also peace of mind.
It is important that the client makes a full disclosure in complete honesty! Mention the previous cancellations “up front” and provide the new insurer with full details of your previous insurance history. A full disclosure in good faith is the first step to finding financial security!
There is constant change in the financial environment and “newer generation products” are made available. It is important to keep in mind that it is not only the insurance products that change, but also the personal circumstances and financial needs of the client. Too often do we find that a client acquires an insurance policy – and then neglects to monitor and revise this later!
The cancellation of a policy should be seen as an opportunity to make a fresh start and to have your financial and insurance products correctly aligned with your financial needs. We would like to advise that the following be kept in mind:
- If your insurance policy is cancelled – make it absolutely clear from which date the cover is to be determined.
- This would have to be provided to you in writing – carefully read the contents of the termination letter – and don’t fear to contact the insurer in case of uncertainty.
- Remember that you will be immediately uninsured as of that date – something you cannot afford!
- If an accident happens, and a claim arises during that period, the insurer who has cancelled the policy will not be obliged to meet it.
- Stipulate in no uncertain terms with the new insurer the date that your new cover is to commence.
- Record these instructions in writing and keep them on file.
Any client with financial assets needs to protect those assets. With all the threats to safety on the road it is important not only to protect the lives of both driver and passengers, but also your financial security from threats to your motor vehicle! Do not regard a cancellation of your car insurance policy as an unfortunate accident, but rather as the perfect opportunity to acquire the best cover at an affordable price!