In the Event Cancellation Insurance, the insurance policy provides protection for losses that you may sustain. This insurance policy, in turn, is an agreement between the insurance provider and the insured, who guarantee that he will not incur losses. In insurance, your insurance policy is actually a contract between you and the company, which define the specific claims that the insurance company is legally obligated to pay in the event that you incur losses. In return for an upfront fee, commonly called the premium, the insurance provider promises to cover certain loss caused by certain perils covered within the policy’s language. The insured has the right to terminate the insurance policy at any time and has a number of options available to him when he decides to do so. Some of these options are discussed below.
Termination of an insurance policy is the simplest way of ending a policy. However, it is important to ensure that you actually need to terminate your coverage before you let go of it because if you do so before you have all of your claims covered, some insurers may withdraw the coverage or increase your rates unexpectedly. Similarly, this option may not be available to you if you do not provide sufficient evidence to the insurance provider that you have terminated your policy. Therefore, it is vital that you take the time to ensure that you are no longer entitled to coverage under your insurance policy.
Another common way of termination is to get another policy with a new provider. This is typically done when the insured gets older and develops bad habits such as drinking or smoking, develops an incurable medical condition, or tends to abuse his or her driving record. Insurance providers are wary about letting insurance providers terminate a policy prematurely. If you tend to use your car too much, you might get into a lot of accidents. Therefore, if your driving record shows several instances of getting into accidents or if you get into a lot of insurance claims, you might find yourself having your coverage cancelled without warning. In this case, it may be best for you to wait until you are much older before you get another policy and cancel your current one to allow you to develop a better driving record.
A third common way of termination is to not pay your premiums on time. This can be problematic if you do not get all of your statements in order. However, if you cannot prove that you have not paid your premiums on time, your insurance policy will remain active until all of your premium payments have been fully made. As long as your premiums are up to date, this means that the insured is still covered and legally permitted to drive in the UK.
Insurers also have the right to cancel your insurance policy at any time if they are not happy with the choices made by the policyholder. If the insured has made a number of claims over a short period of time, for example three or less, this can also cause the cancellation of a policy. The insurer promises to give you sixty days notice before cancelling your policy. If you do not pay your premiums in full within this time, your insurance policy will be canceled and you will lose your right to drive in the UK.
Not following the terms of your insurance policy can be grounds for cancellation. For example, if you are not sticking with an emergency only policy, your insurer promises you that you will receive emergency services when you need them. If you are then involved in an accident, the damages to your vehicle can be covered by your insurance policy. However, you would have no coverage for damages to other people or damage to properties. Therefore, you would be required to make sure you follow your insurance policy in full and stick to the terms of your insuring agreement.