The cancellation condition or clause contained in all short-term insurance policies, including car insurance policies, grants both the insurer (the insurance company) and the insured the right to terminate a policy at any time during the term of the policy. The cancellation of the policy will be subject to a notice period. The cancellation clause will also stipulate the payment or refund of premiums during the notice period. A cancellable policy is one that may be cancelled.

In most cases the notice period will be 30 days written notice given by either party to the contract. The onus, in terms of the contract, is usually on the insured to check that cancellation took place on the arranged date.

The following acts by either the insurer or the insured will result in the termination of the contract: failing to make payments, fraudulent activity and misrepresentation. The insurance company will not cancel a policy if all the premiums are paid up to date without a good reason and the reason must be explained to the client. Insured clients can lodge a complaint with the Ombudsman for Short-Term Insurance if they feel they have been treated unfairly.

If you give notice on your car insurance to move it to another insurer make sure that the new cover is in place from the agreed date.