How to cancel unnecessary insurance

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How to cancel unnecessary insurance

Cancel unnecessary insurance: The Bank of Russia obliged all insurance companies to return money to customers during the so-called cooling period.

For insurances that affect credit conditions, return rules are further regulated by consumer credit and mortgage laws . And for investment and endowment life insurance – by indication of the Bank.

How to cancel unnecessary insurance

Within 14 days from the date of registration of insurance, you have the right to refuse it and receive payment back – in whole or in large part. Some insurance companies, on their own initiative, set a longer repayment period.

Investment and endowment life insurance policies in which you have invested less than 1 million have a longer cooling period. For insurance with a one-time payment – 30 days, with regular payments – up to the third installment, but not less than four weeks.

The conditions of the cooling period are prescribed by insurers in the insurance rules, in the insurance contract itself or in an additional agreement to it.

Before concluding an investment or endowment insurance contract, you should be given a memo, which also indicates all the conditions and terms for the return of money.

Before applying for a loan, banks often offer borrowers to join a collective insurance agreement that the bank has previously concluded with an insurance company. In such cases, the procedure for waiving collective insurance must be indicated on the loan application form.

Does any insurance have a cooling off period?

The rule applies only to voluntary insurance contracts. Compulsory types of insurance, such as OSAGO, are not covered by the cooling period.

You  can opt out of the following types of policies:

  • life insurance, including investment and accumulative;
  • accident and illness insurance;
  • property insurance;
  • civil liability insurance for causing harm;
  • transport insurance (casco);
  • voluntary insurance of civil liability of transport owners;
  • voluntary medical insurance (VHI);
  • financial risk insurance.

Unless otherwise stated in the rules of your insurance company, you  cannot refuse policies:

  • travel insurance;
  • “Green Card” (Green Card);
  • professional liability insurance, if, for example, you are an auditor or a notary – without such a policy you will not be allowed to work;
  • health insurance if you do not have Russian citizenship and need a work permit or a patent.

It is impossible to completely refuse real estate insurance with a mortgage. But in some cases, when the terms of the contract allow it, you can change the insurer. If you do not have insurance, the bank will have the right to demand early repayment of the loan.

The cooling period is valid only for individuals. If you insure, for example, the company’s property, it is unlikely that you will be able to terminate the contract without loss.

You can also cancel the insurance if you bought the policy from an insurance company on your own, and if you have been added to a collective insurance contract. Banks often do this – they conclude an agreement with an insurance company in advance, and then simply enter their borrowers into it.

How much money will I get back during the cooling off period?

  • If the insurance has not yet begun to operate, you will be refunded its full cost.
  • If insurance protection has already been activated, but the insured event has not occurred, part of the money can be deducted from the refund amount – for those days when the insurance worked. Each company is obliged to indicate the conditions of return in the contract or insurance rules.

    At the same time, for voluntary insurance that affects the terms of the loan agreement (with the exception of mortgaged real estate insurance and borrower liability insurance for mortgages), you will be refunded the money paid in full. This applies to both individual and collective insurance contracts.
  • If your insurance is already valid and an insured event has occurred, you will not return the money for the policy – but you will receive an insurance payment.

I don’t need the insurance I bought. What to do?

  1. Assess if you really don’t need it
    Voluntary insurance often affects the parameters of a loan. For example, along with a mortgage, they usually offer life insurance, and in addition to a car loan, a comprehensive insurance policy. With the help of such insurance, the bank reduces its risks and can offer more favorable lending conditions.
    If you enter into an agreement and then refuse additional insurance, even during the cooling period, the interest rate on the loan will certainly increase.
  2. Check if Your Insurance Covers a Cool Down Period
    By law, the minimum cooling down period is 14 calendar days. For investment and endowment insurance policies, the period may be longer, but only if you paid less than 1.5 million rubles for them. When paying for all insurance at once, it is 30 days. When paying in installments – up to the third installment, but not less than four weeks.
    Some insurers themselves provide a longer period for cancellation of insurance. You can clarify in the contract, insurance rules or in the insurance company itself, what is the maximum period for refusal in your case.
    If you decide to terminate the contract after the cooling off period has already passed, the insurer is not obliged to return the money to you. Of course, if other conditions are not specified in your contract. Therefore, carefully study the contract itself and the insurance rules.
  3. Submit a written waiver to your insurance company
    Calling the insurer is not enough. You must come to the office in person or send documents by mail. The application form is free. Some companies have prepared special application forms for termination of the contract for the convenience of customers.
    If the company has such a form, they will give it to you at the office. But you can write a refusal of the company’s services on a regular sheet of paper.
    You can also interact with the insurer remotely – through the website or mobile application, if it is provided for by the insurance contract.

Along with the application, you must submit:

  • passport or other document proving your identity;
  • a notarized power of attorney, if you act through a representative;
  • bank details, if you want to receive money into your account;
  • the original insurance contract and a receipt for its payment, if required by the company.

If the bank has connected you to the collective insurance agreement, you need to cancel the insurance through the bank.

On the same day that the insurer or creditor receives your application, the contract is terminated and the insurance ceases to be valid.

Insurance Contract Thing You Need To Know

Is it possible to refuse insurance if I took out it for a loan, but repaid it ahead of schedule?

In some cases, this is possible even when the cooling period has already passed. For example, by  law , you are entitled to receive a refund of part of the payment for life, health or job loss insurance, but on the condition that the insurance contract was concluded after September 1, 2020.

How and when will my money be returned?

You must return the money within 7-10 working days from the date of receipt of a written application and a package of necessary documents.

You can receive a refund in cash at the cash desk of the office you applied to, or by bank transfer.

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