Are you planning on selling your car or giving it away? If you’re not planning on replacing it quickly or if you’re unsatisfied with the level of service or the rates your current auto insurance company is charging, perhaps cancelling your policy is your best course of action.

Here are some quick pointers about the cancellation requirements and procedures to keep in mind while considering this option.

First things to consider (The No-Claim Discount)

Cancelling your car insurance before the end of the term may bar you from obtaining that year’s No-Claim Discount. Depending on the base premium being considered, this may be equal to a large sum of money, so before outright cancelling it or choosing another motor insurance company, weigh your options carefully.

What are the cancellation procedures?

Before making any major decision, you’ll want to get in touch with your auto insurance company through their customer service hotline to let them know that you’re planning on leaving. This way they’ll have time to put the process in motion and if the motor insurance company requires prior notification of your intent, then this will give you both time to prepare for the coming process and for them to forward to you any of the relevant cancellation requirements.

Depending on the car insurance company, processing a cancellation may require a written letter, filling out a form or simply speaking directly to an agent. Take note of the instructions they’ll give you so you can kick-start the process.

I just hired this insurance policy, what sort of refund am I entitled to?

If you are ending your insurance policy within 14 days of having paid for it you may be entitled to a full refund; however, if you have made a claim on your insurance (or had an accident which may generate future claims) during said period, this refund may no longer be available. Depending on the insurance company, administrative fees may also apply.

I’m cancelling my insurance policy early, am I entitled to a refund?

If the term you’ve hired the policy for still hasn’t ended then you are entitled to a refund as long as you haven’t made any claims during said period (or had an accident which may generate future claims).

The way insurance providers estimate the amount that should be reimbursed varies from one company policy to the next, so it’s worth asking your agent about their refund policies to know what you’re entitled to. The two main methods of measuring these amounts are:

  • Calculating the proportional sum of money equal to the amount of days remaining on the policy, minus an administrative fee.
  • Using the same method mentioned above, but at reduced rates per day as a penalty for leaving early.

What are the cancellation requirements?

Aside from a written letter stating your desire to end the policy (as may be required by some insurance providers), auto insurance companies in Singapore may ask for the following documentation in order to put the cancelation into effect:

  • The original Certificate of Insurance: as required by Singapore law, the owner must give up this document in order to cancel the policy.
  • A declaration form: only submitted if the original Certificate of Insurance happens to be lost or destroyed.
  • A copy of the sales or purchase agreement: which gives details about the vehicle itself and the dates in which the purchase and transfer of property will come into effect.
  • Or if you’ve written the vehicle off, a document from the LTA certifying that you’re unregistering the vehicle.

When can I expect to see my refund, and in what shape or form will I be receiving it?

This depends mostly on the motor insurance company, some will release the funds within the first 2 weeks, while others will take up to a month and a half. The method of payment is usually through checks; however, some car insurance companies will reimburse the funds through your credit/debit card.

Some additional things to consider:

  • Driving in Singapore without car insurance is illegal, meaning that auto insurance in Singapore is required by the state.
  • Some insurance policies renew themselves on their own, so don’t just wait for them to expire if you want to cancel your coverage, as additional premiums may continue being charged by insurance providers.