Termination of a CASCO agreement with an insurance company

I want to cancel CASCO insurance

Any owner of a CASCO policy may have an urgent need to terminate the current contract. But in order to easily and painlessly part with the insurance company, you will need knowledge of the features and nuances regarding the early termination procedure:

Who has the right to terminate CASCO insurance and in what cases?
When is the best time to do this?
Will money be returned for the unused period of insurance?

We will talk about these and other nuances in this article.

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Client - at any time, insurance company - under certain conditions

The policyholder (or beneficiary) has the right to write a statement to terminate the CASCO contract at any time , and the insurance company is obliged to agree with his decision (Article 958 of the Civil Code of the Russian Federation). Another question is, will it be possible to return money for the unused insurance period? Answer: not always, but more on that below.
For an insurance company, such freedom is unacceptable. Termination of a contract unilaterally, without the personal consent of the car owner, for any reason, is absolutely illegal (Chapter 48 of the Civil Code of the Russian Federation). For example, it happens that the insurer, relying on its own insurance rules, notifies the client in writing that it is terminating the contract with him on the basis of non-payment of the next installment. Such an action can be easily challenged even during pre-trial proceedings. The insurance company has the right to terminate CASCO only due to a significant violation of the terms of the contract by the client, and only after an appropriate court decision . For example, an increase in insurance risk gives the insurer the right to demand additional payment for a CASCO policy (Article 959 of the Civil Code of the Russian Federation). If the car owner refuses to pay extra, the court will side with the insurer and the contract will be terminated. Circumstances leading to an increase in the degree of insurance risk are always specified in the insurance rules. Usually this is: the lack of the required alarm system, allowing an inexperienced driver to drive, storing the car near the house instead of the garage, and so on.
And one last thing. According to Art. 958 of the Civil Code of the Russian Federation, the CASCO insurance contract automatically terminates if the insured car is destroyed for reasons that, according to the CASCO rules, are not an insured event. For example, this could be a vehicle fire due to an electrical fault, death as a result of intentional actions of the policyholder (beneficiary), etc.

Will the money be returned? Read the rules!

In case of early termination of the CASCO agreement due to the circumstances specified in paragraph 3 of the previous section of the article, the insurer is obliged to return to the car owner part of the insurance premium paid by him in proportion to the time during which the policy was valid. And you need to know that in this case:

The calculation is made on a daily basis.
Any deductions (expenses of business management (RVD), payments made earlier are illegal.

Early termination of the contract at the personal request of the policyholder (clause 1) does not always entail a refund of money. The same Article 958 of the Civil Code of the Russian Federation states that “ in case of early cancellation of an insurance contract, the insurance premium paid to the insurer is not refundable, unless otherwise provided by the contract .” Let's decipher it.

Suppose a car owner wanted to terminate the CASCO contract of his own free will, no matter for what reason: he repaid the loan, sold the car, did not like the insurance company, etc. In other words, there is an insured vehicle, and the likelihood that an insured event will occur to it has not disappeared. In this case, the insurance company makes a decision: return the money for the unused CASCO period in full, return it with certain deductions, or return nothing at all. That is, of course, the insurer does not decide anything suddenly, but is guided by its CASCO insurance rules and the terms of the contract.

The rules of any insurer always have a section dedicated to the issue under discussion, entitled, for example: “Termination (or termination) of the insurance contract . It explains in detail in which cases the company will issue a refund and how the refund amount will be calculated. If it states that “at a certain point in time” the insurance premium is not refundable, then the owner in these cases will definitely not receive anything. And this will not contradict the Civil Code.

SUMMARY : carefully read the CASCO insurance rules! And if, before purchasing the policy, you did not familiarize yourself with them regarding the early termination of the contract, do so at least before writing a notice of termination. Insurers, as usual, relying on the client’s insurance “illiteracy” and laziness, may try to evade returning money under a flimsy pretext and contrary to their own provisions. This is the time to show your competence.

If the rules say that money is returned under certain conditions, for example, minus previously paid insurance compensation and/or costs of conducting the case (RVD), then this is also the legal right of the insurer.

Moreover, deductions are made first, and then the proportion is calculated by day. And we must keep in mind that deductions of previously made payments and RVD are provided for by the rules of almost all insurance companies. That is, if the cost of CASCO is 30,000 rubles, and during the validity of the policy the same 30,000 rubles were paid for the insured event, it is obvious that if the contract is terminated early, the car owner is guaranteed to receive nothing. RVD varies among all insurers and usually ranges from 10% to 40% of the premium amount under the policy.

That is, similar to the coefficients in the CASCO calculator, each company has its own formula for calculating the amount of return for the remaining insurance period.

Termination of CASCO when selling a car

As already mentioned, if the policyholder terminates CASCO when selling a car, part of the insurance premium for the policy can only be received if this is provided for by the terms of insurance. But even if a refund is possible, the amount will most likely be significantly reduced by RVD deductions. Therefore, the most win-win option to return money for CASCO when selling a car is to sell it along with a car insurance policy. If, of course, the new owner agrees. In this case, according to Art. 960 of the Civil Code of the Russian Federation, all rights and obligations under the contract will pass to the new owner, and he will calmly use the insurance. The main thing is to immediately notify the company about the new insured owner by writing a corresponding application and renewing the contract.
If the car buyer refuses to pay extra for CASCO, it must be borne in mind that the date of termination of the CASCO agreement is considered the moment the application is written, and not the date of sale of the vehicle. Therefore, it is not profitable to delay visiting the insurance company’s office.
If, after selling a car, the policyholder buys a new car and plans to insure it under CASCO with the same company, a good and enterprising insurer will definitely offer to credit the remaining funds to pay for the new policy. Moreover, most likely, he will not even hold back RVD.

We minimize losses

Unfortunately, it is possible to minimize losses upon termination of a CASCO policy only through preventive measures. Namely: even before signing the contract, study the rules for early “severance of relations” with the insurance company. And if there is at least one reason to assume that within a year it may come to selling the car, then:

Select only the insurance company that provides a refund for CASCO when selling a vehicle.
Conclude an agreement on the terms of paying for insurance in installments (CASCO in installments).

Subject to the above, the ideal moment for terminating CASCO insurance will be the date of making the next contribution. Then no one will owe anyone anything.

Termination of the CASCO agreement

Voluntary motor insurance is not cheap, especially full CASCO insurance. After all, the average cost of such a policy will be about 50,000 rubles. You can use the calculator to calculate the insurance premium individually for your car. And by terminating the CASCO contract early , the client of each insurance company hopes to receive part of the money paid for insurance. How does this happen?

For what period is the CASCO agreement concluded?

CASCO insurance is not only an expensive service, but also a long-term one. The period during which the vehicle owner can use protection can be from 15 days to 5 years, depending on the personal desire of the car owner. The most popular CASCO insurance period is 1 year or 12 months. Based on this, the need to terminate the CASCO policy early may arise at any time during its validity period.

Early termination of the CASCO agreement

Early termination of a CASCO policy is a process of changing the validity period of the contract, upon reaching which it ends.

For example, a CASCO policy was issued on October 12, 2015. It will be valid until October 11, 2016, that is, exactly 1 year. If the policyholder has a need to terminate it on March 14, 2016, then this will be considered early termination. But after March 14, 2016, the vehicle will no longer have full insurance coverage.

Situations when a CASCO policy is terminated early

Termination of the CASCO agreement cannot happen just like that. There needs to be a specific reason for this. Thus, based on the insurance rules, each insurance organization establishes a certain list of cases in the event of which the CASCO policy can be terminated early .

You can terminate your CASCO policy early if:

Refusal of the policyholder from the contract.
In case the insurer fully fulfills its obligations to the client.

But at the discretion of the insurance company, situations such as refusal to pay the next insurance premium (when paying for insurance in installments) or complete loss of the vehicle as a result of events that are not an insured event may be added to this list.

Documents for early termination of CASCO

If you intend to carry out early termination of CASCO, you must provide the documents necessary for the procedure to the insurance company along with a written application. It must contain information such as the full name of the owner of the insurance, the insurance policy number and the date of termination of the contract.

The application can be obtained from the insurer or written by hand. Along with it you must provide the following:

Original CASCO policy.
Payment receipt.

IMPORTANT. It is not necessary to submit original documents to the insurance company. They can simply be presented as proof that they exist and that the policyholder has paid for everything. It will be enough to attach only copies.

After the application is accepted by an authorized employee of the insurance company, your policy will be checked against the database for the presence of arrears in payment of the insurance premium. If none is found, the documents are submitted to calculate the amount to be returned to the policyholder.

But there are some nuances here. Of course, the insurer cannot fail to return part of the premium for unused months of the CASCO agreement, but the methodology for calculating this amount may differ from company to company.

Calculation of the refund amount

Typically, the amount due for refund to the policyholder is calculated as follows:

Refund amount = (Premium – Insurance expenses)xn/N – Payments

Premium – the amount paid for the CASCO policy,

Expenses of the insurance company – funds spent by the insurance company to maintain the contract. Typically this value ranges from 30% to 50% of the insurance premium,

n – months remaining unused,

N – total term of the insurance contract,

Payments – money paid for a loss.

Example

Let’s imagine that on October 15, 2016, the policyholder decided to terminate the CASCO policy issued on February 15, 2015, for which there was one payment in the amount of 10,000. The insurance premium was 60,000 rubles.

(60000 – 30%)x 4/12 – 10000 = 3860 rubles

Thus, the client will receive 3860 rubles for the remaining 4 months.

The refund of the premium upon termination of CASCO will proceed as follows:

Checking the correctness of filling out the application and the completeness of the package of documents.
Calculation of the amount due for refund.
Transfer of funds to the policyholder’s personal account, or withdrawal from the insurance company’s cash desk. This will need to be decided at the time of application.

Is it possible to re-conclude CASCO after termination?

No one can deprive you of this opportunity. So, having terminated the CASCO policy , a little later you can insure the car again. Sometimes this method is used by vehicle owners to save money, because sometimes the rates of different insurers can differ greatly from each other.

In my opinion, terminating a CASCO policy early means losing a significant value of the contract. After all, the insurer will not miss out on its benefits. Moreover, the entire procedure for early termination is absolutely legal. Moreover, you will not receive the desired amount, and the vehicle will be left without protection. And if an accident occurs, believe me, you will lose much more. In such a situation, it is better to wait until the end of the insurance period and not rush into termination.

Cancellation of a comprehensive insurance policy

The Insured (Beneficiary) or the Insured's Representative can terminate the comprehensive insurance agreement using a handwritten or notarized power of attorney from the Insured with the right to terminate the comprehensive insurance policy (insurance agreements).

Termination period and refund of money for the policy

The insurance contract is considered terminated from the date specified in the written Application, but not earlier than the date the Insurer receives a written Application (notification) from the Policyholder (Beneficiary) about cancellation of the insurance contract (clause 10.5.1 of the Rules).

If the Policyholder cancels the contract during the cooling-off period (within 14 calendar days from the date of purchase), then you can read about the return procedure here
If the Insured cancels the contract after the cooling-off period , then, in accordance with clause 7.8 of the Insurance Rules, the Insurer, within 14 working days from the date of receipt of the Application from the Insured for termination of the contract, returns part of the insurance premium in proportion to the validity period of the insurance contract for the unexpired period of validity of the contract minus the Insurer's expenses for conducting business in the amount of 25% of the paid insurance premium for the current insurance year.

Note! The balance of the insurance premium for the unused period subject to return is calculated for each risk separately

In what cases is the money for the policy not returned?

The premium is not refunded in the event of events that have signs of an insured event, including losses declared during the validity period of the insurance contract (without exceptions)

Documents for terminating the policy

Passport or other identification document of the policyholder or his representative by proxy;
The original notarized power of attorney with the right to terminate the insurance contract and receive funds (if the return of funds will be made to the representative and not to the policyholder). In the case of a refund to the insured representative, a handwritten power of attorney from the insured to submit documents is sufficient.
Original motor insurance policy;
Receipt for payment of the policy (if preserved)
To return money to a bank account, full bank details are required: personal account, BIC, INN, correspondent account, full name of the bank, branch (if provided).

If termination of the policy involves a refund, then additional documents must be provided confirming the basis for such termination.

5 ways to terminate the CASCO agreement and get your money back

Voluntary insurance is not a cheap financial product. Therefore, when the policyholder for some reason cannot continue to enjoy the privileges that he provides, there is a natural desire to return part of the money for the unused period. Is it possible to terminate an insurance contract? This can be done by carrying out the CASCO termination procedure. What it is, how it helps you get your money back and how this procedure goes will be described below.

Dear readers! Our articles talk about typical ways to resolve legal issues, but each case is unique.

If you want to find out how to solve your particular problem, please use the online consultant form on the right or call +7 (499) 703-38-65. It's fast and free!

What is early termination of a contract?

The CASCO termination procedure means the early termination of a voluntary insurance contract at the initiative of the CASCO insurance policy holder. It can be either natural: the car was stolen or it burned down, but these incidents were not indicated in the risks, or at the request of the policyholder, who either sells the car or decides to refuse voluntary insurance.

Is it possible to get a refund?

The CASCO agreement is a civil contract and it is subject to the same rules as other agreements of the same category. Therefore, if the contract itself does not contain clauses prohibiting this or limiting this process, the policyholder has every right to terminate it and receive a refund according to the remaining insurance period, and the calculation is made on calendar days. Another point is voluntary insurance of cars on credit.

Such agreements often involve automatic extension throughout the entire loan period. Moreover, if the loan is repaid ahead of schedule, then the person has the right to terminate the contract and not renew it. If there is still a loan amount, then the policyholder has the right to revise the terms of insurance, changing the insured amount to the one that he still owes to the bank. There are also certain situations when early termination of the contract is impossible:

payment was received under the insurance policy for total constructive loss of the vehicle or for theft of the car;
a transport insurance policy on a voluntary basis was purchased in installments and the policyholder missed or did not make the mandatory payment for insurance on time;
When concluding a transport insurance contract on a voluntary basis, the insurance holder provided false data to the insurance company.

Step-by-step instruction

There is nothing complicated in the procedure for terminating a voluntary vehicle insurance contract; the main thing is to consistently perform several steps and be attentive to details. Below are step-by-step instructions on what the policyholder should do to terminate CASCO insurance and return the money for the unused insurance period.

Collect a package of documents.

Before going to the insurer's office, you need to prepare a package of documents that will be needed to terminate the insurance contract.

the original CASCO insurance policy form (read about what a CASCO form is and what it looks like here);
policyholder's passport;
a copy of the title or a copy of the vehicle purchase and sale agreement, if the car has changed its owner;
a receipt confirming the fact of payment of the cost of the policy.

The insurer is obliged to accept an application from the policyholder for termination of the contract, and the application can be drawn up in free form. At the same time, you need to understand that each insurance company has its own rules and it is better to follow them so as not to delay the process and waste your time.

In general, the application should consist of 4 parts:

title: to whom the application is being submitted and by whom the application is being submitted;
main part: the text of the request for early termination of the contract and the return of funds for the unused period, as well as the details to which the insurance company must transfer the money;
list of documents: a list of all documents that are attached to the application;
registration: signature of the citizen submitting the application, date of filing the application and transcript of the signature.

The application is submitted in two copies, one of which is marked as received.
This copy must be returned to the policyholder. Receive money from the insurance company through an application or complaint.

In the vast majority of cases, the money will be returned immediately, at the insurer's cash desk, or within two weeks transferred to the policyholder's details, which are indicated in the application. If this does not happen, then the policyholder should file a complaint against the insurance company with the Central Bank of the Russian Federation, through the official website of this organization, be sure to attach a copy of their application.

If the complaint does not help, then with a copy of the response from the Central Bank of Russia, with a copy of his copy of the application, the policyholder must file a claim in court.

Methods and reasons for voluntary cancellation of insurance

Is it possible to get a refund when selling a car? There are several legal ways or reasons to terminate CASCO:

Selling a vehicle. The main thing in this method is to submit documents to the insurance company confirming the fact that the car has changed its owner.
Death of the insurance holder. In this case, the legal heirs of the policyholder must contact the company and confirm the fact of death and the right of inheritance.
The insurance company lost its license. Policyholders have every legal right to demand a refund of money for the unspent insurance period under CASCO, even in cases where the revocation of the license is temporary. This right is enshrined in Article No. 958 of the Civil Code of the Russian Federation.
When repaying a car loan early. If a car is purchased on credit, the new owner is forced to take out CASCO insurance for it. If a citizen does not need this type of insurance, then if the loan is repaid ahead of schedule, he has every right to terminate the insurance contract.
The vehicle has been deregistered. If the car has been deregistered due to the impossibility of continuing to operate it for any reason, the policyholder has the full right to terminate CASCO insurance. The exception is cases when the insurance holder received a CASCO payment for the reasons for taking the car out of service.

How much can you get?

Calculation of the refund for canceled CASCO insurance is calculated using the formula:

RVD is the cost of running a business.

This parameter must be specified in the insurance contract. Typically its value is from 10 to 40%.

In general, CASCO termination is a standard procedure that should go smoothly in the vast majority of cases. Exceptions may include refunds from third-tier insurance companies, but even in this case, the policyholder has excellent tools to combat such a violation of his rights.

Useful video

You can also learn about the termination of the CASCO agreement from this video:

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Termination of the insurance contract

Car insurance is expensive. The average price of a comprehensive insurance policy in 2015 was 49,116 rubles.

Therefore, in a situation where there is a need to terminate the policy early, the client reasonably expects that part of the money will be returned to him.

In what cases can you terminate your comprehensive insurance policy early and expect to receive a refund of part of the paid premium?

Let's look at this issue in detail.

Validity period of the comprehensive insurance agreement

Voluntary car insurance is a long-term service. The owner of a car, purchasing a comprehensive insurance policy, receives insurance protection for a certain period.

This period is called the term of the contract. According to insurance rules, the period can vary from 15 days to 5 years. Most often, cars are insured for a year or 12 months (the most common period according to insurer statistics).

Read more: View unpaid traffic police fines by car number

Accordingly, during the term of the contract, the company’s client, for various reasons, may need to cancel the contract early.

Early termination of a comprehensive insurance contract

Early termination of a comprehensive insurance agreement means that its validity ends earlier than the period specified in the conditions.

For example, a comprehensive insurance policy was issued for the period from 11/10/2015 to 11/09/2016. If there is a need to cancel comprehensive insurance on March 10, 2016, when there are still 8 months left before expiration, we have early termination.

In such a situation, the comprehensive insurance agreement terminates from the date of termination. And the next day after termination, the car no longer has insurance protection.

When can you terminate your insurance policy early?

In what cases can a company client terminate his motor insurance policy early?

Again, according to the insurance rules, there is a clear list of situations when the policy is terminated early.

Let's see when early termination is possible according to the rules of the top 3 leading comprehensive insurance companies - RESO-Garantia, Ingosstrakh, Rosgosstrakh.

failure to pay an overdue regular insurance premium

fulfillment by the insurer of obligations under the contract in full

at any time at the request of the policyholder

fulfillment by the insurer of obligations under the contract in full

refusal of the policyholder from the contract

loss (destruction) of the insured vehicle for reasons other than the occurrence of an insured event;

fulfillment by the insurer of obligations under the contract in full

refusal of the policyholder from the contract.

It can be seen that the list of situations when a comprehensive insurance policy can be terminated early is the same among the leaders of the comprehensive insurance market.

And the main good news for owners of comprehensive insurance policies is that they can always voluntarily cancel their comprehensive insurance policy before its expiration.

What documents are required for early termination?

In order to terminate a comprehensive insurance policy, the policyholder must submit a written application.

You can fill out an application in any form, indicating the main parameters: full name of the policyholder, contract number, the period from which it is necessary to terminate the contract. Or fill out a standard form, which will be given at any insurer’s office.

The application, along with the originals of the comprehensive insurance policy and payment receipt (to confirm that everything has been paid by the client), must be personally submitted to the office of the insurance company.

Important! The original policy and receipts should not be submitted to the company. It is enough to show them to the employee who accepted the application. If necessary, he can make copies of these documents for himself.

After receiving the application, company employees will review it, check the database to see if there is any debt to pay the insurance premium, and submit it for calculation of the refund amount.

Does the company return part of the paid premium?

If a motor vehicle insurance policy is terminated early, each car owner expects to receive part of their payment back.

Insurance companies easily return part of the insurance premium for the unused period of the policy. But the calculation of the refund amount may differ significantly from company to company.

How is the refund amount calculated under comprehensive insurance in case of early termination?

In a generalized version, the calculation of the refund in case of early termination is made using the following formula:

REFUND AMOUNT = (PREMIUM - SK EXPENSES) x n / N - PAYMENTS

PREMIUM - the policy premium paid by the client,

COSTS OF THE IC - the costs of the insurance company for conducting business, measured as a percentage of the paid premium and range from 30 to 50%,

PAYMENTS - the amount of insurance compensation paid and payable for losses,

n is the number of full months remaining from the date of termination to the expiration date of the policy,

N is the number of full months for which the policy is concluded.

For example, the policyholder decided to terminate the comprehensive insurance policy concluded with RESO-Garantiya for a year from 11/10/2015 to 11/09/2016. The paid premium is 55,000 rubles. There was one loss of 12,000 rubles.

If the policy is terminated from March 10, 2016, the refund amount will be.

Refund amount = (55,000 - 35%) x 8 / 12 - 12,000 = 11,833 ru pip.

We get that RESO-Garantiya will pay the client and receive 11,833 ru pip upon early termination.

How to receive the refund amount?

The calculated refund amount in case of early termination is paid by the insurer either in cash through the cash desk (for this you will need to visit the company office again), or by wire transfer to a bank account or bank card.

The format for receiving the amount can be discussed at the time of submitting the application.

Do break-even discounts apply to early termination?

About how break-even discounts work on comprehensive insurance policies, you must check with the insurance company from which the comprehensive insurance policy was purchased. Since insurers have significantly different approaches to the insurance history of their clients.

Some keep break-even discounts for several years, demonstrating loyalty to policyholders. And it does not tie the preservation of discounts to early termination.

Someone immediately resets the discount history to zero after early termination.

But in general, the market practice is to maintain break-even discounts only for continuous car insurance with the same company. Therefore, early cancellation of a comprehensive insurance policy carries the risk for the car owner of losing the accident-free history accumulated over several years.

But this only applies to comprehensive insurance. In MTPL, the accident-free history is formed and stored in a different way.

Read more about discounts for careful driving under MTPL in the article - “Calculation of KBM under MTPL”.

Is it possible to re-insure a car after early termination of a comprehensive insurance policy?

If the car owner, for any reason, cancels the comprehensive insurance policy ahead of schedule. Then in the future he can re-insure his car.

Insurers do not have any prohibitions on re-insurance of cars for which the previous comprehensive insurance policy was terminated early.

By the way, sometimes this method is to terminate the current policy ahead of schedule and immediately purchase a new one, but from a different company - a way to save money, since the tariffs for comprehensive insurance between companies sometimes differ significantly.

Conclusion

— The owner of a comprehensive insurance policy has the right to cancel it early.

— In case of early termination of a comprehensive insurance policy, the insurance company calculates the amount of return of the unused portion of the premium.

— The calculation takes into account the insurer’s expenses for conducting the business and the payments made.

— The refund amount is paid in cash or to a bank card.

— If you terminate your comprehensive insurance policy early, there is a risk of losing accumulated discounts for accident-free driving.

— After termination, the car owner can again insure the car under comprehensive insurance with the same company or another.

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