You bought a sweater, but you realize that it is not suitable for you after reaching home. What will you do? Take it back to the store. The same is the case with insurance. Is it also possible to refuse insurance if you imposed it or found an offer more profitable? Yes, in many cases, it can really be done without losses.
For insurances that affect the loan terms, the repayment rules further regulate consumer credit and mortgage laws.
Within 14 days of the insurance registration, you have the right to refuse it and get paid back – in full or most of it. Some insurance companies set a longer repayment period.
The conditions of the cooling period of insurers are prescribed in the rules of insurance, in the insurance contract itself, or an additional agreement to it.
Often banks offer borrowers to join the collective insurance agreement, which the bank has entered into with the insurance company in advance. In such cases, the order of refusal of collective insurance should be specified in the credit application.
Is there a cooling-off period for any insurance?
The rule applies only to voluntary insurance contracts. Compulsory insurance, such as OSAGO, does not have a cooling-off period.
You can opt out of the following types of policy:
- Life insurance;
- Accident and Disease Insurance;
- Property insurance;
- Civil liability insurance for harm;
- Transport insurance (casco);
- Voluntary insurance of the civil liability of transport owners;
- Voluntary Health Insurance (MHI);
- Financial risk insurance.
If your insurance company’s rules don’t say otherwise, you can’t opt out of your policies:
- Insurance for those traveling abroad;
- Green Card;
- Insuring professional liability, if, for example, you are an auditor or notary – without such a policy, you will not be allowed to work;
- Health insurance if you do not have citizenship and you need a work permit or patent.
You cannot opt-out of mortgage insurance completely. 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 the loan’s early repayment.
The cooling-off period is valid only for individuals.
You can refuse insurance in the case when you bought a policy yourself in an insurance company and when you were attached to a collective insurance agreement. So often do banks – in advance conclude a contract with the insurance company and then enter into it with their borrowers.
How much money will I get back during the cooling-off period?
- If the insurance has not yet started to operate, you will return its full cost.
- If the insurance protection has already been activated, but the insurance case has not come, some of the money can be deducted from the refund amount – for the days when the insurance worked. The terms of the refund each company is required to specify in the contract or insurance rules.
- If your insurance is already valid and there is an insurance case, you will not return the policy, but you will get an insurance payment.
I don’t need the insurance I bought. What to do?
- Assess if you don’t need it. Voluntary insurance often affects the parameters of the loan. For example, a mortgage usually offers life insurance, and in addition to a car loan – a policy of casco. With such insurance, the bank reduces its risks and can offer more favorable credit terms. If you sign a contract and then refuse additional insurance, even during the cooling-off period, the loan’s interest rate is sure to rise.
- Check if your insurance is covered by a cooling-off period.
By law, the cooling-off period lasts 14 calendar days. But some insurers themselves provide a longer period for denying insurance. You can specify in the contract the rules of insurance or in the insurance company itself what is the maximum term for refusal in your case. If you decide to terminate the contract when 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 spelled out in your contract. So carefully examine the contract and insurance rules.
- Submit a written waiver to your insurance company as calling the insurer is not enough. You must personally come to the office or send documents in the 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, you will be given it in the office. But you can write a waiver of the company’s services and on a regular piece of paper. You can also interact with the insurer remotely – through a website or mobile app if required by an insurance contract.
Together with the statement it is necessary to present:
- Passport or other identity documents
- Notary power of attorney if acting through a representative;
- Bank details if you want to get money into an account;
- Original insurance contract and receipt of its payment, if required by the company.
If the bank has connected you to a collective insurance agreement, you need to refuse insurance through the bank.
On the same day that the insurer or lender received your application, the contract is terminated, and the insurance ceases to be valid.
Is it possible to refuse insurance if I have issued it for a loan, but repaid it ahead of schedule?
In some cases, this is possible even when the cooling-off period has already passed. By law, you are entitled to receive back a portion of the payment for life, health, or loss of employment, but on the condition that the insurance contract is concluded after September 1, 2020.
How and when will I get my money back?
The money must be returned within 7-10 business days from the date of receipt of the written application and package of necessary documents.
You can receive a cash refund at the cash office you applied to or a non-cash transfer.
The insurance company or the bank refuses to return the money. What to do?
You can file your complaints here.