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Termination of Policy/Ineffectiveness of Policy

Facts that you may not know (2)

Termination of Insurance Policy

The insured and insurer may terminate an insurance policy.

  • Termination by the Insurer – This requires a 15-day advance notice sent by registered mail to the insured at the last known address of the insured.  The premium shall be refunded to the insured minus the amount of premium for the period already covered.
  • Termination by the insured person – This requires a written notice to the company.  Part of the premium will be refunded according to the refund rates specified in the policy.
  • Group insurance with a reduced number of insured cars – The premium is refunded on a daily basis.

When does an insurance policy becomes ineffective?

  • On the date and at the time specified in the insurance policy.
  • When the insured person fails to pay the premium within 60 days as of the date the policy becomes effective.  The insured person is deemed to no longer wish to take out insurance.   Termination may be made by either the insured or the insurer.