Most insurance policies in Spain are 12-month contracts and auto-renewable. This means that unless either the policyholder or the insurance company cancels the policy in the agreed way, it will automatically renew. If you do not want to renew then make sure you cancel insurance in Spain correctly.
It does not matter whether you pay the premium by direct debit through a bank or whether you pay by debit or credit card. If it is not cancelled correctly then it will automatically renew.
Advantage and disadvantage of automatic renewal
There is a benefit to auto-renewable policies. It means that you do not find yourself accidentally uninsured. The drawback is if you wanted to cancel the policy. You must do so in writing at least one month in advance of the renewal date. You can cancel before then of course and the policy will run on to the renewal date and then expire.
Note that if the insurance company wants to cancel the policy the insurance company must give you two months’ written notice. It might want to cancel the policy because you have had a large car accident claim for example. So it does work both ways.
Cancel the renewal in writing
The way you cancel insurance in Spain depends on the insurance company. It should be in writing. The insurance company should be in receipt of that cancellation notice at least one month prior to the renewal date. The letter should be signed and a copy of your identification enclosed with it.
In most cases, you can deliver it to the broker’s office. Many insurance companies will accept scanned copies of the signed letter and a copy of your identification. Some will even accept just an email but currently, most do not. If the insurance company insists on receiving an original letter to their offices then we recommend you send it “certificado”. This is a service from the post office. Alternatively, send it by courier as someone has to sign for it.
The policy automatically renews if you do not cancel it properly. It will continue for another period of 12 months and the policyholder is liable to pay the premium for the coming year.
It is important to cancel a policy in plenty of time to avoid it renewing if not required or desired. If you cancel outside of the legal time frame then the insurance company has the right to pursue you for the premium.