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There are many reasons why you may want to cancel your car insurance policy. For example:
- You may have sold your car and no longer need insurance for that vehicle.
- Your car could have been stolen or written off the road in an accident.
- Your car is declared as SORN because you are not driving it.
- You had a problem when claiming on your policy and want to switch.
- You aren’t happy with the customer service.
- You have found a much better deal with another insurance company.
Whatever the reason, the answer is always yes – cancelling car insurance is always an option open to you.
Before you make such a big decision though, it’s best to make sure you know as much about it as possible, so we’ve put together this useful guide that explains whether or not you can cancel your car insurance anytime/early and get a refund, the potential costs involved and answers other related FAQs.
How much does it cost to cancel my car insurance? Is there a cooling-off period?
When you take out a car insurance policy, an insurance company has to give you, by law, a ‘14 day cooling off period’. This two-week period allows you to cancel your policy for free, without incurring a penalty (in most cases).
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The standard cooling off period for car insurance is 14 days, but some companies may offer a longer period of time. It's always worth checking your policy details so you are aware of how long is available to you.
If you do decide to cancel your policy during the cooling off period, you should not be charged for doing so. However, some insurers will charge a small cancellation fee to cover the cost of administration, so the cost of cancelling car insurance isn't completely free.
If you decide to cancel your car insurance after the cooling off period further along the line, you will more than likely have to pay a cancellation fee which is much higher.
Cancellation fee prices vary from insurer to insurer, with some being as high as between £50 and £225, according to GoCompare.
Can I get a refund if I cancel after the 14 day cooling off period? When can I cancel my car insurance?
For drivers who choose to pay their premium annually, a refund may be available for cancelling early, but it depends on each situation and you should prepare to have to pay cancellation and administration fees.
If you paid for your car insurance upfront and in full (annual cover) and you decide to cancel your policy in the fourth month, you should be entitled to a refund on a pro-rata basis, so you'll get money back for the remaining eight months, minus the cancellation or administration fees.
However, insurance companies don’t usually refund the last two months on a policy so bear this in mind and make sure you check before deciding to cancel your policy.
Any additional extras that you have on top of your standard policy, such as legal cover, breakdown cover, courtesy car cover, are unlikely to be refunded because those additional services are provided by another company (or companies), so even if you cancel your car insurance, you may still be paying for those extras.
In this case, you will need to contact those companies directly to enquire about a refund.
Your provider has cancelled your policy
If your insurer has contacted you to let you know they’ve cancelled your policy for a certain reason, such as non-disclosure or because you have committed fraud then you are unlikely to receive a refund – unless the mistake is on their part.
Remember, if you pay monthly for cover, your situation will be different.
Can I cancel my car insurance if I pay monthly?
Yes, you can cancel, but you may not get a refund. Compare the Market states that “you may have to pay extra to cover the time you’ve been insurer, as well as a cancellation fee and any administration charges”.
Some people choose to pay monthly instead of annually, and they spread the cost of their car insurance premium by paying by direct debit every month.
Some motorists prefer to pay for cover this way as it means they don’t have to fork out a one-off lump sum, but it is important to note that with monthly car insurance, you will be paying more overall due to the added interest that comes on top of each monthly payment.
Additionally, failing to pay any monthly instalments may affect your credit score, so be sure to keep up with them and pay them on time and in full.
Are there any consequences to cancelling my car insurance?
Other than having to potentially pay cancellation fees and administration costs, the only other consequences for cancelling your car insurance is that you will miss out on the no claims bonus (NCB) for that period.
If you have additional coverage on your policy, such as breakdown cover, you may not be entitled to a refund (as mentioned above).
How do I cancel my car insurance? Can I do it online?
To cancel your car insurance, you need to contact your insurance company directly. Depending on your insurer, you may be able to cancel your policy and ask about a refund online, which would be the easiest way, but most companies generally want to speak to you to find out more about why you’re cancelling.
However you contact them to cancel your policy, they will ask you to sign and send back a declaration form and policy schedule. Once the company has received this, the cancellation will take effect.
You will receive a letter or email confirming the cancellation of your policy which you should always keep for your own records.
Consider temporary insurance if you only need cover now and again
If you’ve cancelled your policy because you don’t need it at the moment, remember that you must have insurance in place when you need to drive your vehicle again (or it should have a SORN if you are not driving it), and cover will need to be arranged before you get into your vehicle.
Annual policies can work out much more expensive for people who don’t drive their car often, so you might want to look into temporary cover as and when you need it or pay as you go insurance to cut the costs – just make sure you are covered for the dates you intend to drive your vehicle.
I’m driving my car less due to lockdown – Should I cancel my policy?
If you’re working from home as a result of the Coronavirus pandemic (Covid-19), the level of cover you currently have may now be more than what you actually need, as you’re no longer using your vehicle to commute to work.
However, it’s important that you don’t just cancel your policy straight away without talking to your provider first. It’s likely that you’ll still need insurance to get about, so the best thing to do is to contact your insurer to see how they can tweak your policy for you so that you’re sufficiently covered for your needs.
You may be entitled to some money back or you may even have to pay a bit more, but it all depends on your situation and your insurance company’s terms.
Remember, if you change your policy with your insurer but you later return to work, you’ll need to inform them of this so they can alter your policy accordingly.
My car insurance has been automatically renewed - Can I cancel?
Generally, motorists who purchase an annual policy will find that their insurer has set them up for auto-renewal (this is completely legal as long as it is stated in your policy and or/they had your content when you initially set the policy up).
Your insurer will let you know around 3 or 4 weeks before your renewal date, giving you plenty of time to shop around for a better deal and switch providers if you want to save money.
Of course though, many people forget about their renewal date and once they realise that the policy has been automatically renewed, they no longer want the policy - either because they aren't happy with the service or because they've found a cheaper quote with someone else.
If you are wondering if you can cancel your car insurance renewal, you should be able to do so without incurring a fee as long as it's within the 14 day cooling off period. Some insurers, however, may charge an administration fee, so be sure to contact them directly to find out. If you cancel after the cooling-off period though, you may be entitled to a refund but you may also have to pay fees too.
Find out more here: Car Insurance Automatic Renewal: Should I Stay or Switch?
Tips on cancelling car insurance
- If you are thinking about cancelling your car insurance, you should work out if it would be better for you financially to wait until the policy ends. For example, if you have two or three months left, it would be worthwhile to wait until the end as you would be out of pocket from paying the cancellation fee and not being refunded for the final two months.
- Check your policy details as some insurance companies will automatically renew your insurance every year. If your policy does this and you wish to cancel, as long as you contact your insurer before the renewal date, you will not face any fees as this is not classed as cancellation.
- You have the right to make a complaint to an insurance company if you feel you have not been treated fairly. For example, you may think the cancellation fee you had to pay was unreasonably high.
If you continue to own a vehicle, you should always make sure it is fully insured, otherwise you could face a penalty, so make sure you have new cover arranged or that your car is SORNed before cancelling your existing policy.
Save money on your next car insurance quote today
If you’re looking for a great deal on your next car insurance policy or you want to cancel your auto-renewal with your current insurer and switch to another, start comparing quotes now to see how much you could save.
Insurance companies generally tend to charge loyal customers more for cover, compared to new customers who get offered the best deals. This is another reason why it’s important to compare quotes, as you could be missing out on a significant saving.
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