Insurance Change: What You Need to Know
Change is inevitable. Sometimes you make decisions and change your mind later. Sometimes you make a choice that no longer suits you. This also applies to your business. Have you chosen an insurance company that you would like to change now? Find out here how to proceed when changing insurance.
The right insurance is essential for a business. As we explained in another post, an insurance package must be chosen carefully. However, a company never stands still. Hopefully it will grow and expand. The chosen package may no longer suit your needs. No problem. You have the right to switch to a more suitable insurance coverage.
An insurance policy is a contract with a specific duration. The contract term is agreed upon in advance based on your needs. This period is often 3 years for insurance policies and 10 years for corporate transactions, although deviations are possible. Insurance contracts – like all types of contracts – end through fulfilment.
An insurance contract is fulfilled in the following two cases:
- At the end of the contract term. An insurance contract is often automatically renewed without cancellation. If this does not happen, the term expires, and the contract is therefore fulfilled.
- In the event of a total loss. An insurance contract is only valid as long as the insured object exists. For example, if your car is totaled, you no longer need insurance because the car no longer exists. The contract has been fulfilled. Once the contract has been fulfilled, you can take out a new insurance policy.
What happens if you cannot wait that long? There are various reasons to terminate an insurance policy before the end of term.
Insurance Change: Under What Circumstances
- Expiration of Contract
When your contract expires, you may cancel your insurance of course and then take out a new one. But be careful! If you miss your cancellation deadline, your contract, including premiums, will be automatically extended by one year. So, make sure you cancel on time. The deadline is a few months before the contract expires, usually three.
Note: For your cancellation to be considered timely, your letter of cancellation must reach the insurer before the deadline.
In certain cases, insurance contracts also end automatically. This happens, for example, when a company ceases its activities. The insurance contracts will end at the same time as operating activities.
- In The Event of Claim
In the event of a claim, the policy can be cancelled after the compensation has been paid out. In the event of a total loss, as mentioned above, the contract with your insurer automatically expires, as there is no longer an item that can be insured. Cancellation is not necessary.
In the event of partial damage, you may terminate the contract. You have 14 days from receipt of the payment in your account, or the date on the letter from your insurance company. During these 14 days, you are still covered under your old insurance policy.
- Premium Adjustment
If your premiums are increased, you can cancel your insurance and choose a different one. Even if only part of your insurance policy is adjusted. As a rule, the notice period is 31 December, though it can vary from contract to contract. Your letter of cancellation must reach the insurer by this date at the latest.
If you do not cancel your insurance, the contract will be automatically renewed with the new premiums.
- Change of Owner or Vehicle
If you sell the insured item, the policy is transferred to the new owner. However, they may choose to terminate the contract. They have 30 days from the date of purchase to do so.
If you have insured your car, you may cancel insurance early if the vehicle or its owner changes. In such a case, a new policy is taken out and the old one expires.
Is Cancellation Necessary?
If you want to change the content of your contract, you do not necessarily have to cancel your current contract. Contact your insurance advisor to make the necessary changes. In this case, the existing contract is replaced, and a new insurance contract is drawn up. You can request a change to your insurance contract at any time.
When Is the Best Time to Cancel?
The cancellation must be received by the insurer at the right time. The deadline is usually three months before the contract expires. More detailed information can be found in the general terms and conditions, on request at customer information or from your advisor. In the case of premium adjustments, cancellation may take place up to the last day before these come into force.
The important thing is when the cancellation letter is received by the insurer, not when it is sent. If the notice period is 31 September, the letter must reach the insurance company by this date at the latest. Starting 1 October, the contract is automatically extended by one year. The following applies in all cases: If you miss the deadline, the contract will be automatically renewed without giving you any notice. This is done to make sure you will not suddenly find yourself without insurance. Your insurance contract is therefore renewed every year unless you cancel it or there are any changes.
What Is the Best Way to Cancel?
Consult the general terms and conditions of your insurance policy to find out exactly how to cancel. We recommend cancelling in writing, ideally by registered letter, to receive a receipt confirming that the insurance company has received your cancellation letter. You should, however, ask your insurer for written confirmation either way.
As mentioned above, the decisive factor is the day on which the insurance company receives your cancellation. Keep therefore in mind that public holidays, weekends or other delays could delay your cancellation.
The content of the letter is also important. In general, you are free to choose the exact wording. However, the following points must be included in your letter:
- Your policy number
- Date of cancellation
- Reason for cancellation
- Your signature, of course.
Please note that the cancellation cancels the contract with future effect. Meaning, the contract remains effective until the cancellation expires. This guarantees you insurance cover up to that point.
After Cancellation
Under no circumstances should you ever be left without insurance. So, make sure that a new insurance package is available to you after cancellation.
Are you still looking for the right insurance for your company? Then get in touch with info@atlanto.ch. We will connect you with our partner Helvetia Insurance, where you will find consultation for SME. For more information on insurance or starting a business, visit our blog.
