On cancellation, insurer is obliged to return the pro rata premium for the unexpired period of the policy
In the past two months my car met with three different accidents for no fault of mine. After the third accident I received a letter from my insurance company giving me notice that my policy will be cancelled. Can an insurance company send such a letter to a customer?
Anamika Singh, Gurgaon
As per the general regulations of the All India Motor Tariff, which governs the motor insurance policies in India, an insurer can cancel a motor policy by sending the insured a seven days notice of cancellation by recorded delivery to the insured’s last known address. Further, on cancellation of the policy at the behest of insurer, the insurer is obliged to return the pro rata premium for the unexpired period of the policy. Considering this the insurer is within their power to cancel the cover on your policy. The insurers cannot refuse to provide you a third party cover but at the same time they can always decline the ‘Own Damage’ cover.