Cancellation of an Insurance Policy
When your insurance policy is canceled, it means it has been terminated. An insurance policy can be canceled by you (voluntarily) or by your insurer (involuntarily). There can be various reasons for this, such as nonpayment or fraud.
What does it mean to cancel an insurance policy?
The word "royement" is derived from the verb "royeren." "Royeren" means to suspend or terminate something. In the context of insurance, this means that a policy is canceled. Any type of insurance policy can be canceled, from home contents insurance to auto and motorcycle insurance.
There are two types of termination: both you and the insurer can terminate an insurance policy.
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Cancel Your Insurance Yourself
If you want to switch to another insurer at the end of your policy term, you can cancel or terminate the policy yourself. You can also terminate your policy if you sell, suspend, or have your car stolen, or if it is a total loss.
In the past, you would receive a cancellation statement showing the number of claim-free years you had accumulated after canceling your insurance. Now, these years are tracked digitally in Roy Data. This means you no longer need the statement to apply for new insurance.
Under what circumstances can my insurance policy be canceled by the insurer?
In some cases, an insurance company may terminate a policy. They can do so if premiums are not paid, if fraud has been committed, or if too many claims have been filed. This is always specified in your insurance policy terms and conditions. There are several types of termination:
Expulsion for Nonpayment
If you miss a payment on your insurance, the insurer will first send you a reminder. If you pay the amount due by the due date, there’s no problem. But if you don’t pay within 30 days, the insurer may cancel your policy. In that case, you will (temporarily) no longer have insurance coverage.
If you haven't paid after 50 days, the insurer may cancel your policy. Your coverage will then be terminated, and you will be considered a delinquent payer.
Termination due to fraud or excessive claims
An insurer may also terminate the policy in the event of insurance fraud. Many people think that insurance fraud only involves major mistakes. However, knowingly providing false information on an insurance application also constitutes insurance fraud.
For example, if you try to hide a criminal record or past instances of reckless driving, such as driving without insurance. Even if you report an incorrect number of claim-free years, that can be considered fraud. If too many claims are filed within a short period of time, your insurer may decide to cancel your policy.
Cancelled insurance can result in a CIS registration
If your insurance policy was canceled due to fraud, nonpayment, or an unusually high number of claims, you risk being registered with the CIS. CIS stands for Central Information System. The CIS Foundation is an organization that represents the interests of insurers. All insurance data that may be important to insurers is stored there.
This record will remain on file for 8 years and will affect your eligibility for new insurance coverage. After being terminated by the insurer, you may no longer be eligible for insurance from a standard insurance company.
The only option in that case is to get insurance through Vereende. They specialize in insurance for special risks and have a more lenient underwriting policy than most insurance companies.
The cost of insurance after a policy cancellation
If you take out insurance with De Vereende, you’ll often have to pay additional fees. The higher the risk, according to the insurer, the higher your monthly premium. De Vereende also requires you to pay three months’ worth of premiums in advance before they approve the policy.
In addition, you usually pay a security deposit that will be withheld if you don't pay your premium on time. Do you always pay on time? If so, you'll get your security deposit back at the end of the insurance year.
Getting Car Insurance After Your License Has Been Revoked
If you have been expelled, you can still purchase car insurance through Vereende. You will always be accepted. The downside is that the premium is often higher than with a regular car insurance provider.
Frequently Asked Questions About Insurance Cancellation
What are the reasons for canceling a car insurance policy?
A car insurance policy can be terminated due to voluntary cancellation—for example, the sale of the car—or due to involuntary cancellation by the insurer itself. This can happen, for example, after a failure to pay, fraud, an excessively high claims rate, or if you no longer meet the policy terms and conditions.
What is the difference between voluntary and involuntary expulsion?
In the case of voluntary cancellation, you cancel the insurance yourself—for example, when you sell your car or switch to another insurer. In the case of involuntary cancellation, the insurer terminates the policy, usually due to nonpayment, fraud, or too many claims.
Can I take out a new insurance policy after a forced cancellation?
Yes, but it can be more difficult. You’re often viewed as a high-risk customer, and regular insurers may turn you down. In that case, you can turn to De Vereende. The downside is that De Vereende’s premiums are significantly higher.
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