In Malaysia, car insurance is required for all car owners, however, circumstances can change. If you’re selling your car, upgrading to a new one, or simply transferring insurers, you may need to cancel your current car insurance plan. Many Malaysians are confused about the process, refund eligibility, and the laws.
Here is a comprehensive guide on cancelling your car insurance policy in Malaysia.
Top Reasons to Cancel Your Car Insurance
There are various reasons why you, as a policyholder, might want to cancel your car insurance. Here are some common scenarios:
There are several reasons why you, as a policyholder, might want to cancel your auto insurance. Below are several typical scenarios:
- Selling Your Car
If you are selling your car to a new owner, you will need to cancel the current insurance policy as part of the ownership transfer process. The new owner will need to obtain their own insurance policy in their name.
- Switching To Another Insurance Provider
If you find a better deal or a policy that suits your needs, you may switch to another insurance company. You can do this even before your current policy expires, but you must cancel your current car insurance first before applying for a new one.
- Buying A New Car
When you purchase a new car, you can choose to transfer your existing policy or cancel your old policy and purchase a new one for your new car. This usually happens when your new car’s value is worth more or has different features than the old one, so you need a different coverage plan.
- Car No Longer In Use
You don’t need to keep your insurance policy active if you no longer drive your car. Cancelling the policy allows you to claim a refund for the unused portion and avoid paying for something you don’t need.
What Steps Should You Take To Cancel Your Car Insurance Policy?
The process of cancelling your car insurance policy may differ depending on whether you seek help from an agent or handle it by yourself. If you choose to cancel the policy on your own, the cancellation process may vary among different insurance companies or takaful operators.
Cancelling your car insurance isn’t complicated, so no need to stress! To make things simple, here’s a step-by-step guide to help you through the process:
- Reach Out To Your Insurer or Customer Service
Contact the customer service team of your insurance company to learn more about the cancellation procedure and requirements.
- Cancel Road Tax for Ownership Transfer (If Selling Car)
If you are selling your car, you will also need to deactivate your road tax. You can visit the nearest JPJ office to handle this yourself or ask your preferred used car dealer for assistance.
- Submit a Written Notice
Some insurance companies may need a written notice of cancellation. Usually, insurance companies will offer a 7 days cancellation period. Here, you will be required to present the original insurance certificate and any other necessary documentation that is requested.
🌟Just to be safe, double-check with your insurer to make sure you’re following the right steps.
- Receive Your Refund (If Eligible)
When you cancel your insurance, you will receive a refund depending on the short-term rate that your insurance company offers.
For Example:
✔️Cancel after 3 months ➡️ about 50% refund of your annual premium.
✔️Cancel after 8 months ➡️ no refund in most cases.
In most cases, the money will be credited to your bank account within two to four weeks.
🚨Important Things To Note🚨
- Refund eligibility depends on claims made during the policy period.
- Some fees are non-refundable, such as stamp duty or service charges.
- If you’re selling your car, you should always cancel your road tax and insurance at the same time. This is because JPJ needs proof of active insurance for road tax to be valid.
👉For more tips and the best car insurance coverage options, visit Key Plus website. Key Plus is a reliable car insurance provider in Malaysia, offering easy online renewals, competitive rates, and trusted service for local drivers. Renew your car insurance hassle-free with Key Plus.