General Insurance - Cancel Policy Sample Letter

Whether you change carriers or drop a type of insurance, be sure to cancel the policy properly to ensure that you are not charged additional premiums or costs. Simply ceasing premium payments or writing “please cancel” on a payment coupon does not cancel an insurance policy. The insurance company may cancel the policy after you stop paying, but without a formal written notice of cancellation, the unpaid premiums assessed prior to the company’s cancellation will be noted as a delinquent payment on your credit report.

When to Cancel Insurance

You may find yourself needing to cancel an insurance policy when you no longer need the coverage, as in private mortgage insurance once your equity reaches 20% or auto insurance on a vehicle you no longer own. You might also cancel an insurance policy if you find a better deal on a similar policy with a different carrier. When canceling health or auto insurance in favor of a policy from a different company, wait until the replacement policy is issued before canceling the first policy to ensure that you have coverage at all times.

Consult your policy for the exact conditions for canceling your policy. Life insurance policies have a free look period of 10-30 days, during which a policyholder can cancel without penalty. Other types of insurance may have specific processes to request cancellation. In most cases, you do not need to provide the insurance company with a reason for the cancellation.

What To Include in a Cancel Policy Letter

Only the policyholder can cancel insurance; a beneficiary or someone else covered under the policy cannot cancel it. A cancellation letter needs to include the policyholder’s name and address, the policy number, explicit notice of the request for cancellation, effective date of cancellation and the policyholder’s signature. In addition, the letter should also include a request for written confirmation of receipt and notice that the company is no longer authorized to charge a credit card or debit a bank account for premiums.

Where to Send A Cancellation Letter

Policy servicing, including cancellations, may be handled at a different office from the premium payments, so cancellation letters may need to be directed to a different address from the one you send your premium bills or claims. Call your agent or insurance company to verify the address for cancellation, since cancellation letters will need to go directly to the company rather than to your agent. During this call, you can also verify whether you will have a refund owed to you, or have a balance due. If you have a balance, enclose payment with the cancellation letter.

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