Should You Cancel Your Motorcycle Insurance
Short answer: No, cancelling your motorcycle insurance in the winter or mid-term won’t save you money in most cases. In fact, it might cost you more.
Why Cancelling Won’t Save You Money
Motorcycle insurance in Ontario is charged seasonally. That means even though you pay the same amount every month, the insurance company collects most of your premium between March and October—when you actually ride your bike or in other words the premium is earned during the months of March to October.
If you cancel in the winter, you might think you’re avoiding payments, but in reality, you’ve likely only paid half of what you actually owe. If you cancel, you’ll still have a bill to pay!
How Motorcycle Insurance Payments Work
Here’s a breakdown of how insurance companies charge your yearly premium. Most companies are the same, but it’s best to check with your provider:
| Month | % of Annual Premium Charged |
|---|---|
| January | 0% |
| February | 0% |
| March | 5% |
| April | 10% |
| May | 10% |
| June | 20% |
| July | 20% |
| August | 20% |
| September | 10% |
| October | 5% |
| November | 0% |
| December | 0% |
Let’s assume your policy renewal is on March 1st. If your annual premium is $2,400, your monthly payments will be $200 per month (12 equal payments). Since most of your insurance cost is packed into the summer months, by end of October, you’ve only paid $1,600 to the insurance company—but you actually owe the full $2,400.
That means if you cancel in October, you’ll get a bill for $800—due immediately. If you keep your policy, you’ll just keep making your regular $200 payments per month. it all depends on your policy renewal date, your insurance company’s cancellation process and more.
Another example: You get a quote for a bike, and it works out to be $2400 per year ($200 Per month), you insure this bike on July 1st and you make a single payment for $200. On Aug 1st, you’re forced to sell the bike for whatever reason and you wish to cancel the policy. You’ll get a bill for $280! July consumes 20% of the total premium which is $480. You made a payment for $200, and now you still owe another $280. Sometimes circumstances force you to cancel the policy which is totally understandable, but now you understand why they charge you the extra premium. Keep in mind, if you’re cancelling because you want to switch companies, you have to pay a Short-Rate cancellation fee on top of that $280 !!
Other Problems with Cancelling
If you cancel your motorcycle insurance in the winter, you could run into even more issues:
- Cancellation Fees – Insurance companies charge a penalty for cancelling early if you’re switching to another company(2-7% of your total premium). If your premium is $2,500, you might owe up to $175 extra.
- Loss of Discounts – Cancelling means you lose loyalty discounts and could pay more next time you get insured. This depends on your history, age, years licesed and insured, etc.
- Lapse in Insurance History – This could make your rates higher in the future, depending on which insurance company you go with. Some will charge you more because of the gap, some don’t.
- No Theft or Fire Coverage – Your bike isn’t protected in the winter. If it’s stolen, vandalized, damaged, you’re on your own.
- You Might Miss Out on Fall Rides – There are warm days in Nov or Dec where you could still be riding!
Cancelling your motorcycle insurance in the winter won’t save you money—it’ll probably cost you more. Instead, keep your policy active and enjoy a few last rides before the snow comes!
