Introduction
Scrapping your old vehicle can feel like closure after a long journey. However, before that smile and goodbye, there’s one thing a lot of drivers forget to do: tell their insurance company! Sounds unimportant? It might not seem urgent, but it’s more important than you think.
Your insurance policy doesn’t simply vanish when your car is scrapped — it’s still attached to the vehicle! By informing your insurance company, you are making sure their records are up to date. You’ll avoid future bills and potential liability by showing you responsibly handled the car.
If you live in Ontario, you also have to do this to ensure you handle your plate and registration properly. Read on to see when, why, and how to tell your insurance company, and what you can expect from that point.
Why Should You Tell Your Insurance Company?
If your car isn’t on the road anymore, your insurer should know. Insurance policies don’t stop when you are scrapping your car. Unless you cancel the insurance policy, it stays in effect. This means you can get charged or held responsible if something unexpected happens, like someone using your plates after they were scrapped.
In Ontario, even if you are not driving the car, your name remains associated with the vehicle until you properly dispose of it. In addition, if you cancel early, most insurers will refund you for the premiums that remain unused. You may also be entitled to a refund for the remainder of a policy period. But an insurance company can’t refund a premium unless you cancel.
When Should You Inform the Insurer?
You should ideally inform your insurer before the car is collected for scrapping. This gives you time to explore cancellation options, remove the vehicle from coverage, and potentially receive a refund for unused days. If your car is already gone, don’t worry, just call the insurer as soon as you are able. You will need to explain when and where the vehicle was scrapped, along with whether or not you returned the plates.
Also Read: Selling a Car Without Insurance in Ontario: Risks & Smart Solutions
What are the Consequences for Failing to Inform the Insurer?
If you don’t notify your insurer, the policy stays active, and you might unknowingly continue paying for a car you no longer own. If your policy automatically culls, you could pay hundreds of dollars on a car you do not own. If someone misuses your old license plates after scrapping the car, and they’re still linked to your insurance, you could face penalties.
This could develop into a legal issue or cause you to receive a delayed new policy in the future. This could hinder your insurance record moving forward. Insurers may view gaps in coverage or missed cancellations negatively, potentially raising your premiums in the future.
How To Cancel Your Policy After Scrapping Your Car?
It is not an overly complicated process, but attention to detail is important for a proper cancellation.
- Call or go online: Most of Ontario’s insurers will allow you to cancel by phone or through their digital platform. Have your policy number on hand.
- Provide proof of scrapping: Some companies may ask for a copy of your bill of sale or scrapping certificate.
- Return the plates: In Ontario, you must return your license plates to a ServiceOntario office if you will not use them again. The insurer will probably ask you if the plates will remain active.
- Ask about refunds: If you paid your premium policy upfront, ask if you will receive any refund. You should normally receive a refund for any unused portion.
- Request written confirmation: Always also request an email or letter confirming the cancellation. This protects against future confusion.
Also Read: What Happens to Your Car Insurance When You Scrap Your Car?
Do You Require To Cancel Any Associated Policies?
Multiple drivers also take advantage of optional extras like roadside assistance or gap coverage. These could be through third parties or credit cards. Check to see if extras are still being billed before scrapping your car. If you are handing in a financed or leased car, let your lender know. They may have their procedures to remove the car from the loan or lease contract before scrapping.
Does Cancelling Your Insurance Impact Future Coverage?
Yes, some motorists feel that canceling their insurance could affect their history or result in higher premiums in the future. If you are in Ontario, when you cancel because you are scrapping the car, it will not ruin your history. It is responsible to cancel your insurance if you are no longer using it. The only consideration is to avoid long lapses in insurance or cancellation due to failed payment. If you are buying another vehicle shortly, the insurer could transfer the policy or offer some assistance that would help you avoid completing lots of paperwork again.
What Happens If You Are Still Paying For The Vehicle?
If the vehicle still has financing or a lease to pay off, you may not be able to scrap it legally until it is paid off. The lender may still be the owner of a portion of the vehicle, and the documentation will show that. You will have to pay off the loan or get express permission from your lender to junk the vehicle. Eventually, lenders want their money back — unless you pay them off, including a buyout or trade-in toward another vehicle. Don’t try to junk a vehicle that has financing on it without resolving this matter first, as you may face legal action.
Conclusion
If you’re prepared to scrap your car in Ontario, the process is easy with Greenway Auto Recycling. Not only do they come to pick up your vehicle, but they also help you through every step of the way. From helping you take off your old license plates to providing you with information about how to cancel the insurance properly, they will account for every angle so that missed steps are avoided.
They also provide proof of disposal and help you return your plate and update your registration. This way, you will be protected and legally clear. If you’re ready to move forward and cleanly break from your old vehicle, call us at (416) 783-9026 to make scrapping your car simple, fast, and stress-free.
Frequently Asked Questions
Do I need to cancel insurance after scrapping a car in Ontario?
Yes. Once your car is scrapped, you must cancel your insurance policy to avoid being charged for a vehicle you no longer own. The policy doesn’t automatically end, and your insurer must be notified directly.
What happens if I don’t cancel my car insurance after scrapping it?
If you don’t cancel, your policy stays active. You could continue getting billed, and if your old plates are misused, you might be held liable. It may also affect your insurance history negatively when applying for future coverage.
Can I get a refund on my insurance after scrapping my car?
Yes, most insurers in Ontario will refund the unused portion of your premium if you cancel your policy after scrapping the vehicle. You’ll need to provide proof of disposal, like a bill of sale or scrap certificate.
How do I cancel my car insurance after scrapping the vehicle?
You can cancel your policy by calling your insurer or using their online portal. Have your policy number ready, submit proof of scrapping if requested, and ask for written confirmation of the cancellation. Also, return your license plates to ServiceOntario if you won’t reuse them.
Does cancelling insurance after scrapping hurt my future coverage?
No, cancelling because you scrapped your vehicle won’t harm your insurance history, as long as it’s not due to missed payments. It’s considered responsible. Just avoid long lapses in coverage if you plan to drive again soon.
