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How do I cancel my car insurance policy?

From cancellation charges to cooling off periods, we tell you what you need to know about cancelling your car cover.

Decided to sell your car? Or maybe your vehicle’s been stolen or written off and you’re not ready to buy a replacement? Perhaps you've simply changed your mind.

Whatever the reason you want, or need, to cancel your car insurance policy, there are a few things you should be aware of first.Contract cancelled

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Changed your mind?

If you've decided you simply don’t want the insurance you have bought, for whatever reason, UK insurance rules give customers a 14-day “cooling-off” period when they buy most kinds of cover.

This means that if you want to end a policy within two weeks of receiving your documentation, you should receive a full refund.

You may still have to pay an administration fee, however, and you could be charged for the number of days you were covered for too.

On the other hand, if your policy hasn’t yet come into effect when you cancel it, you should only have to pay the admin fee.

Want to cancel a policy mid-cover?

Once the 14-day cooling-off period has passed, the cost of cancelling your policy may increase sharply.

If you want to cancel your policy after this period, you’ll likely be charged a cancellation fee.

It's also likely that there will be a limit on any refund you might get. Cancelling half way through your policy doesn’t necessarily mean you’ll get half your premium back.

Consequences of cancelling early

There are a number of potential consequences to cancelling your car cover early, so it’s worth checking all related terms and conditions beforehand.

For example, you may miss out on the no-claims bonus for that period.

Or, if you have breakdown cover and other add-ons included with your policy, these will also come to an end and you may not get a refund.

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Want to cancel your car insurance before it automatically renews?

Many annual car insurance policies automatically renew at the end of the 12-month cover period.

This is done to ensure that drivers who forget their renewal dates are not on the road uninsured and driving illegally.

If you don’t want to renew your current car insurance policy, you have to tell your insurer either by phone or in writing. It's not enough to simply cancel your direct debit.

You won’t face any fees for this, provided you cancel before the new policy comes into effect.

Buying a new car?

If you’re selling your car and buying something new, you may not need to cancel your insurance at all as most insurers will allow you to update your policy to cover the new vehicle.

There are often charges for doing so, however, and it’s worth bearing in mind that your premium for the remaining months of the policy may change to reflect your new car’s "risk rating".

If your insurer does raise your premium by a large amount to cover your new car, it could be worth comparing quotes from other insurers before accepting the new deal.

You can find more information on amending your policy in our guide.

How to cancel the policy

If you decide you do want to go ahead and cancel, you’ll need to contact your insurer to tell them and return your Certificate of Motor Insurance.

You may also need to sign and return a declaration that you want the cancellation to go ahead.

In most cases, the cancellation will only take effect once the signed declaration has been received by your insurer.

You'll then get a letter to confirm the policy has been cancelled.

What to do if you disagree with cancellation charges

The potential cost of cancelling your car insurance early can be quite significant.

If you think you have been unfairly charged — or if you have to cancel because of what you think is a mistake on the insurer’s part — you can complain to the company directly.

Ask for an address for customer services, and write giving clear details of your case — such as what happened, when, and why you think you have been charged too much.

Even if fees are laid out in the policy booklet, you may be able to challenge them.

Keep a record of anyone you speak to, and of the letters you send. If you use Special Delivery, you’ll have proof they’ve been received.

If the company doesn’t deal with your complaint to your satisfaction, you can take your case to the Financial Ombudsman Service at no extra cost.

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