After one year of engagement, you have the option of terminating your car insurance contract at any time. But what are the motives? And what steps should you take with your insurer to terminate your car insurance contract? We tell you everything about the Hamon law and the Châtel law which facilitate termination, as well as the deadlines and procedures to be followed. Also discover our model letter to cancel car insurance as soon as possible.
Cancel car insurance: when ?
You can cancel auto insurance in several scenarios:
- at any time passed a year of commitment. This is possible since the Hamon law;
- then, under the Châtel law, you can cancel the insurance contract for your vehicle if the expiry notice was sent less than 15 days before the end of the cancellation period, or if the possibility of terminating was not mentioned in the expiry notice sent by the insurer;
- in the event of a rate increase or an increase in the amount of the deductible by your insurer, provided that your contract provides for it;
- finally, in the event of a change of situation (moving house, sale or transfer of the car, theft or destruction of the vehicle, etc.).
To know : in the event of the death of the subscriber of the contract, it is transferred to his heir who then has three months to request termination. This will take effect within 10 days. The insurer will also have to reimburse any premiums collected.
What does the Hamon law say about the termination of car insurance?
Before the Hamon law, if you did not want to be forced to take out an additional year of car insurance, it was better to break your contract in time.
The Hamon law entered into force in January 2015. It is also called the Consumption law. In addition, it allows all policyholders to terminate their auto and home insurance contract whenever they wish, provided they respect one year of subscription.
Thanks to the Hamon law, you are therefore no longer obliged to respect a termination deadline with the risk of being tacitly rehired when the contract expires.
On the other hand, the insured do not need to justify their request for cancellation. And no fees or penalties can be applied by insurance companies.
To note : the Hamon law applies to car insurance which has at least one civil liability guarantee.
What is the Chatel law?
Your insurer is required to comply with the provisions of the Chatel law, in force since January 2008. Thus, it must inform you by post of the deadline for terminating your contract in order to give the insured the choice of taking out a another cheaper in another company.
This letter must reach you at least 15 days before the end of the termination period (or after this date) by registered letter with acknowledgment of receipt. Otherwise, your insurer must inform you that you have 20 additional days to break your contract if you wish. This period runs from the date of dispatch of the notice.
If ever you have not received a letter on the anniversary date of your car contract, you can cancel at any time, without fear of penalties. Then send a registered letter to your insurer.
Read also >> The role of an auto insurance adjuster
The formalities for canceling your car insurance
Find a new insurer: how to do ?
The first thing to do before breaking your car insurance contract is to find a new insurer. Indeed, as a motorist, you have an obligation to protect your car by means of a contract including at least a civil liability guarantee.
To save time on this process, we advise you to use an online insurance comparator. These are free tools made available to any Internet user.
The subscription of the new contract
Then, when you have chosen your new auto insurance, fill out a mandate at the time of subscription authorizing the company to take the termination steps for you. Thus, your new insurer takes care of all the formalities. And you just have to let yourself be guided… On the chosen date, your old car contract is terminated and the new one takes over.
To know : if you pay your contributions for the year, you will be reimbursed for the uncovered part following the termination of your car contract.
Read also: What is the role of a terminated auto insurance adjuster?
Deadlines for terminating your car contract
In case of moving
If you have moved, know that you have a period of three months from the date of the move to make your request for termination.
Your request must be made by mail, by registered letter. Do not forget to indicate your customer number as well as your insurance contract number concerned by the cancellation.
In case of sale or transfer of the car
It is possible to send a cancellation request the day after the sale or transfer. Thus, the car insurance contract ends no later than 10 days after the mail is sent.
In case of destruction or theft of the vehicle
If the insured is the victim of the theft of his car or if it has been destroyed, he must notify his insurer within 10 days in order to be able to terminate the contract. The day after receipt of the registered letter, it ends.
auto insurance policy cancellation letter template
Auto insurance contract number concerned
Subject: request for termination of car contract no. XXX
(registered letter with acknowledgment of receipt)
Holder with your insurance company (contract reference) for my brand XX vehicle registered XX, I hereby request the termination of my contract.
Upon receipt of this letter, please proceed with the formalities allowing the termination of the said contract on the grounds that (choose the reason).
Thanking you for considering this request, please accept Madam/Sir, the expression of my best feelings.
Last name First Name