Most service contracts can be ended before their term runs out. The clause that says how is the cancel clause. It is usually short, placed near the end, and easy to skip. Read it while you still have the choice.

Find the notice route

Look for who you must tell, how you must tell them, and when the notice counts. Some contracts want a written request sent to a stated address. Others accept a web form or a phone line but still ask for written confirmation. Ask which form counts as proof, and keep a copy of whatever you send along with a record of when it went out. A cancellation that never arrives is the one people most often discover late.

Check the refund formula

Many contracts that allow cancellation after the start return part of the price for the unused term. Find the sentence that says how that part is figured. A straight prorated share of unused time is one common method. Others subtract a fee first, or refund nothing once a claim has been paid. Ask for the formula in writing, not a summary. Ask what fee comes off, whether it is a flat charge or a share, and whether the figure is printed in the contract or set later by the company.

Ask about an open claim

Find out what happens if a repair is in progress when you cancel. Some contracts end coverage on the day notice is received. Others finish a claim that was already opened. Ask whether a claim reported before your notice is still covered, and whether it reduces the refund. Get the answer in writing.

Confirm who gets the refund

If you paid the seller at the time of a sale, or the plan was added to a loan or a bundle, the refund may go to a different party than you expect. Ask who receives it, by what method, and how long the contract allows for payment. If the plan was financed, ask whether the lender also needs to be told.

Compare the cancel clause with the term you need

A contract is only useful while the equipment it covers stays in service. Before you buy, set the contract term beside the planning window for the system. The ranking of the six major appliances by typical service life is a useful starting point, and the system pages on this site show each planning window. If the contract ends well inside that window, the cancel clause matters less. If the contract runs past it, the cancel clause is the exit you will be relying on.

Questions to put to the seller

  • How do I cancel, and to what address or line?
  • What proof will you send that my cancellation was received?
  • How is the unused share figured, and what fee comes off first?
  • Does coverage end on the day I give notice, or the day it is received?
  • What happens to a claim that is already open?
  • Who receives the refund, and how is it paid?

What to keep

Keep the signed contract, the cancel page, your copy of the notice, proof of delivery, and any written reply. If a verbal answer disagrees with the printed clause, hold the seller to the printed clause and ask for the difference in writing.

This is a plain reading of how these clauses usually work, not a substitute for reading your own contract. The published figures on this site are in its tables, not in this guide.