Cancellation

This is the closure of an insurance policy at a date earlier than its normal annual expiration date. There are some reasons for cancellation. Here are two main reasons that call for the cancellation of a policy:

• The policyholder may not have enough money to pay for premiums. When this happens, the insured or insurer may decide to cancel the policy. 

• It may be due to the death of the insured. If the insured should loss his life as at the time his/her policy is in force, there may be a cancellation of the policy. 

Nevertheless, some insurance companies may continue with the deceased policy over the deceased next of kin for some period of time before finally taking the decision of legal cancellation.

Posted in: Glossary of Auto Insurance (C)