Looking to cancel your insurance policy? You need to file an insurance cancellation letter. Of course, there is nothing permanent in life. This includes your insurance cover, which you might need to cancel at some point.
If you find yourself in a situation that you need to cancel an insurance policy, you will have to write a professional insurance cancellation letter. This article discusses how you can write this letter— a sample and templates are also provided.
What is an Insurance Cancellation Letter?
An insurance cancellation letter is a letter written by an insurance holder to an insurance provider asking them to cancel the insurance policy. It is written when an individual wants to cancel their current policy. It notifies the insurance company of your intent to cancel the policy, and request a refund. Refunds are applicable especially when there is a balance on the premium.
How to Write an Insurance Cancellation Letter
When terminating an existing insurance policy, most people will wait until the policy period expires. But you can also do this by simply providing a formal insurance cancellation letter. Don’t know how to write one? Follow these steps to do so!
a. Your name: In your letter, remember to include your official names. The name must belong to the insurance holder.
b. Policy number: This is the number that identifies the insurance holder. When writing an insurance cancellation letter, always include this number.
c. Address and contact information: The insurance company might want to reply to your request. They won’t be able to do so without your contact information. This is why you should always include it in your letter.
d. Insurance company name: Specify which company you are writing to by mentioning its name. If possible, mention its address and contact information.
e. The current date: Indicate the date you are writing the cancellation letter. This is important especially when court cases are involved.
f. Policy cancellation date: Indicate the date you want the policy cancelled.
e. Reason for cancellation: It is prudent that give the reason why you want the insurance policy cancelled. Mention a valid and strong reason.
g. Stop payment and refund request: After giving the reason you want your insurance policy cancelled, you should request for a refund. This means that you will cease to make insurance payments.
Next, draft the body of the letter. The body should include:
- The cancellation date. It is important when it comes to court cases.
- A request for a refund of unused premiums: You might have a lengthy insurance cover that lasts for so many years. In that case, you should request for a refund.
- A statement denouncing your authorization for the insurance company to access your finances.
- Requesting a confirmation that the company has received your notice.
Tips to Write an Insurance cancellation Letter
Writing an insurance cancellation letter and cancelling your policy can be intimidating. The following outlines what to include in insurance cancellation letters and tips for writing a letter to cancel insurance coverage.
You need to keep the letter simple. It is recommended that you keep your letter as short as possible — one page will do. Go straight to the point, avoid unnecessary details trying to explain why you want the insurance policy cancelled. Remember to include all the essential information needed by your insurance company for a successful cancellation.
It is aslo recommended that you write the cancellation letter in a polite yet firm tone. Besides, go through your letter and ensure it is error-free. Lastly, you should confirm the address. It is very important to confirm the address you have written on the letter. This not only insures the letter arrives on time but prevents it from going to a wrong location.
Risk Factors of Cancelling Insurance
Business insurance cancellations can lead to increased premiums and risk exposure. Before you cancel your policy, first consider these factors.
It is important to note that cancelling your insurance cover without a backup can lead to expensive losses. Furthermore, it can create a coverage gap by canceling a claims-made insurance policy. A claims-made policy covers events that happened in the past. You must, however, have a continuous coverage even if you change carriers. In many cases, this policy is found with errors, professional liability, omissions among other issues.
It is very important to save money on insurance. It might an unwise decision to leave your company unprotected in the end. And sometimes, you don’t have to cancel your insurance policy to meet your policy.
Sample Insurance Cancellation Letter
Dear Mr Richardson,
I am writing this letter to constitute my formal demand for cancellation for my medical cover insurance policy. This cancellation will be effective as of 30th January, 2021. Please immediately return any unused premium to the account attached. I no longer authorize your company to directly withdraw any premiums from any of my bank accounts.
I would like receiving a confirmation of this cancellation within 14 days. In case of any questions, do not hesitate contacting me.
Yours truly,
Peter D’Adamo.
Download Templates
Now that you know the importance of insurance cancellation letters and how they are written, you can use our templates for better assistance. We have free and premium templates available for download.
FAQs
1. Why would an insurance company cancel a policy?
Today, most companies cancel a policy because the client has defaulted in payment. Other factors like incompetency also contribute to cancellation.
2. Can an insurance company cancel your homeowners’ policy?
Your insurer can choose to either cancel or just not renew your homeowners’ policy, depending on the situation and terms of agreement.
3. Can I cancel my insurance after a claim?
Some insurance providers will allow you to cancel a claim once it’s been filed. There several reasons that can lead to that.
Conclusion
Insurance cancellation letters are the only way one can formally cancel an insurance policy. Make sure that the letter is written correctly by following all the guidelines provided here. You can also use our templates for a perfect draft.
