When is an insured allowed to cancel their automobile insurance contract?

An insured is allowed to cancel their automobile insurance contract whenever they decide during the contract period because Ontario law provides policyholders with the right to cancel their insurance at any time. This flexibility is designed to give consumers control over their insurance arrangements.

Typically, to execute a cancellation, the insured must provide notice to the insurer, and any premium refunds would be calculated based on the remaining term of the policy. This means that regardless of their reason—be it finding a better rate, selling their vehicle, or no longer requiring insurance coverage—the policyholder can initiate cancellation without needing to wait for the end of the policy term or a specific grace period.

Understanding this right is critical for both consumers and insurance professionals, as it underscores the principle of consumer choice in the insurance market. Other scenarios, such as waiting for a grace period, are not applicable since cancellation can happen immediately upon the insured's decision.