All about cancelling an insurance policy

Whether you want to terminate (cancel) your insurance policy or simply learn more about the cancellation process, read on for answers to the most frequently asked questions on the topic.

Can I cancel my insurance policy?

Yes, you can cancel your insurance policy at any time and for any reason.

Is there a penalty for cancelling?

If you can’t wait until the end of your policy to terminate it, your insurer will likely charge you a penalty. Generally speaking, the farther off your policy end date, the higher the penalty will be.

Keep in mind that you can avoid the penalty by notifying your insurance representative in advance that you’d like to cancel your insurance on your policy renewal date or if you notify them before your policy comes into effect.

What is the procedure for cancelling an insurance policy?

To cancel your insurance policy, you must send your insurer written notice that you would like them to cancel your policy. The cancellation will take effect once your insurer receives your written notice. Your insurer must then refund the overpaid insurance premium, minus any penalty charges, or require payment of any outstanding premium accrued by the policy cancellation date, including any applicable penalty charges.

Important: Stopping payment of your insurance premium does not automatically terminate your insurance policy. In such cases, any outstanding balance will be immediately payable and if the default continues, the insurer may terminate the policy by sending you advance written notice indicating when the policy will end. If your policy is cancelled by the insurer, you will have to report this to your next insurer, which may decline to insure you or decide to add a premium surcharge.

Is the process the same if you dealt with a broker?

If you dealt with a broker and wish to cancel your insurance policy, you must inform the broker in writing.

Can the insurer cancel my policy?

Yes, your insurer can also cancel your policy according to certain conditions, as long as it complies with the rules set out in the Civil Code of Quebec or the Automobile Insurance Act, depending on the type of insurance.

For car insurance

If your car insurance policy has been in effect for more than 60 days, your insurer can cancel it only in the event of aggravation of risk or non-payment of the premium.

Other business lines

For any other type of insurance, your insurer can cancel your policy at any time.


Your insurer may also cancel your insurance policy when it comes up for renewal. To do so, they must notify you of their intention in writing at least 30 days before your policy expires.

Ab initio cancellation

This type of cancellation is only possible if you make false statements or withhold information that could influence your insurer’s decision to accept the risk. In such cases, the policy is deemed to have never existed and the insurer is under no obligation in the event of a loss, subject to the rights of mortgagees.

In all cases, your insurer must send you advanced written notice, within legal time limits, indicating the date on which the policy will be cancelled. During this period, you must take the necessary steps to find a new insurer.

Why is it important to be wary of low premiums?

It may be tempting to cancel an insurance policy and switch to an insurer offering a lower premium. However, a lower premium may also mean less coverage. That’s why it’s very important to check what is and isn’t included in the new policy and to compare it to your current policy to be sure you won’t be losing out.

It pays to talk to your representative

Thinking of cancelling your insurance policy because you feel like you’re paying too much? Before you do, contact your damage insurance representative and tell them what’s on your mind. They’ll be able to go over your policy and adjust it to your needs. They can also tell you more about how your insurance risk was assessed and the amount of your premium. In short, it’s very possible you’ll come out ahead and no longer feel the need to cancel your policy.