There are occasions when your NTUC car insurance may need to be cancelled before it is due. When this happens you can get back the remaining (unused) value of your policy. As such, a little knowledge on how to estimate your refund value and how to cancel your policy may be helpful.
Why Do People Cancel Their Car Insurance Policy?
The most common reason is because they have sold their car and bought a new one. In this case, the existing insurance policy will not be applicable for the new car. Therefore it has to be cancelled and a new motor insurance policy enforced.
Secondly, if the car is lost through fire or theft, or if it is damaged beyond economical repair, it has to be scrapped. When this happens, the car insurance policy will automatically lapse. The market value of your vehicle will be paid out to you and you may choose to purchase another vehicle using the compensation.
As a side note, NTUC Income will not refund any unused policy value if at least one claim was made within the policy term. (This is generally the same for other insurers too.)
Another reason why an NTUC car insurance could be cancelled is because the details provided on the application form is incorrect. As such, the policy will not be valid since it is based on erroneous information. Therefore it has to be cancelled and a new contract reinforced.
An amendment (known as an endorsement) can be passed to correct minor mistakes though. Nevertheless the premiums may not remain the same.
What’s the Procedure like?
NTUC Income may cancel a car insurance policy by giving seven days’ notice at your last known address and you must return your original Certificate of Insurance to them.
You may also initiate the cancellation by notifying them in writing or by teleconversation. You must return your original Certificate of Insurance thereafter. The cancellation will take effect from the date NTUC Income receives your original Certificate of Insurance.
How To Calculate the Premium Refund?
The formula for premium refund depends on whether you’ll take up another insurance policy with NTUC Income within the next 90 days:
(i) If you take up another NTUC Income policy within 90 days:
Premium Refund = Premium * Unexpired Period of Insurance / Original Period of Insurance
(ii) Otherwise:
Premium Refund = 85% of Premium * Unexpired Period of Insurance / Original Period of Insurance
If the remaining unused premium is less than the minimum sum of $25, no refund will be made.
In summary, to cancel an NTUC car insurance policy, this is what you have to do:
1. Email or call up NTUC
2. Send in your Certificate of Insurance
3. Wait for the refund cheque in your mailbox