How to cancel your car insurance

You can cancel your car insurance at any time. If you do this at renewal time, there should be no charge. If you do this outside of your 'renewal window' you likely have to pay a cancellation fee.

If you still have a car, make sure you have another policy ready to take over your cover. Otherwise, you need to take your car off the road.

Here's what you need to know.

Cancelling car insurance: Step by step

Cancelling your car insurance is usually a quick task. It's perfectly legal to cancel your insurance too - it's a private contract between you and your insurer. In some cases you can do it online, but some insurance companies might want to speak to you first. If that’s the case:

• Get your policy documents ready and find your car insurance policy number.
• Call your insurance company. It needs to be the policyholder who does this, but you can then authorise someone else to deal with the policy on your behalf.
• Tell your insurer you want to cancel your car insurance. They may ask why you want to do cancel, in case they can help.
• If you're cancelling because your car insurance is too expensive, they might offer you a discount to stay.
• They should explain any fees and might ask you to send your certificate of motor insurance back to them.
• If you’re giving your car a statutory off-road notification (SORN), make sure you fill in the SORN form with the DVLA.

Although you can sometimes get a refund of your costs if you cancel your car insurance, any extras, like breakdown or legal expenses cover, usually aren't refundable. But it's worth contacting your provider to see what their terms are.

It's important to make sure you have some kind of cover in place after you cancel your car insurance policy. Unless you're taking your car off the road, you should always have a valid policy in place. Otherwise, you're driving without insurance, which could see you get a fine and points on your licence.

Can I cancel car insurance if I pay monthly?

Yes, you can cancel even if you’re paying monthly, but there may be a few extra costs to keep in mind. If you’ve made a claim, you might still need to pay off the rest of the policy balance. Plus, some insurers charge an admin fee or a credit-related fee for monthly payments if you cancel mid-term. It’s worth checking with your insurer to understand any remaining payments, fees, or charges, and to confirm when your coverage will officially end after you cancel.

Can I cancel my car insurance if I’ve made a claim?

Yes, you can cancel your car insurance if you’ve made a car insurance claim, but you may not be entitled to a refund. This is because you've already had a payout from the insurer.

If you've made a claim and you pay monthly, you may also have to pay for the remainder of the policy after cancelling.

Do I lose my no-claims discount if I cancel my insurance?

Yes. If you've not had a full year with your policy you lose your no-claims bonus for that year.

If you take a break from your insurance, most insurers allow up to 2 years before you lose all of your no-claims bonus.

But this varies depending on the insurer, so check the policy details.

Car insurance cancellation fees

You can cancel your car insurance at any time, but depending on when you do, you might face different fees:

• If you cancel at renewal: You shouldn't have to pay any fees. This is called 'lapsing' the policy.
• If you cancel within 14 days of starting a policy: You may have to pay an admin fee.
• If you cancel at any other time: You're likely to pay a cancellation fee. This is known as a 'mid-term cancellation'.
• If you bought through a broker: Some car insurance brokers might also add their own cancellation fees on top of what the insurer charges.

Remember, it’s your right to cancel anytime, but the closer to renewal, the less you’re likely to pay in fees.

Will I get a refund if I cancel my car insurance?

Yes, you should usually get a refund for the policy you’re cancelling, so long as you've not made a claim. This should be on a 'pro rata' basis - so if there are 6 months left on the policy, you can expect around half of your costs back.

If you pay by monthly direct debit, once the admin fee has been sorted you stop paying any further.

Always check with your bank or building society to ensure the direct debit has been cancelled.

What’s the cooling off period for car insurance?

The cooling off period for car insurance is 14 days. Regardless of which company you choose, by law you have 14 days to change your mind and cancel.

There may be a small admin fee for this, and you have to pay for the days you've been insured. If you paid for the policy in a lump sum, you should get the rest of your money back, so long as you've not made a claim.

If you’ve been paying monthly, you should get a part-month refund and the direct debit should be cancelled.

Will I have to pay an admin fee to cancel my insurance?

Yes, your insurer will probably charge an admin fee if you cancel your car insurance. Sometimes, you'll get a charge even if you cancel within the 14 day cooling-off period.

The charge amount varies depending on your insurer and usually, it's more expensive if you cancel outside the 14-day cooling off period.

For example, insurers might charge an admin fee below £30 within the cooling-off period. But they could charge £50 if the cooling-off period is over.

Can I cancel car insurance within 14 days?

Yes, you can cancel your car insurance within the first 14 days, known as the cooling-off period. But, there are some costs to consider. Insurers usually charge an admin fee and may deduct an amount for the days you were covered. These fees vary by provider, so it's you'll need to review your policy terms for the specific details.

To give you a better idea of what to expect, here’s an example of cancellation fees from a range of providers both within and after the 14-day cooling-off period*:

Each insurer has its own policy, so always check the terms carefully. Comparing these fees can help you make an informed decision about cancelling or switching providers.

*Figures correct as stated on providers' websites November 2024.

What our motor insurance expert says

"It's a common misconception that cancelling within the 14-day 'cooling off' period means you don't have to pay any fees. While you should get some kind of refund from your insurer, you still have to pay for the days you've had cover for. And insurers can charge an admin fee for cancelling within this window. Check your policy documents - they should tell you exactly when they charge a fee for cancellations."

Louise Thomas Motor insurance expert

Do I get a refund if I cancel after the cooling-off period?

Yes - if you decide you want to cancel your car insurance after the 14 day cooling-off period, you can still get a refund, as long as you've not made a claim.

Your refund amount depends on when in your contract you've decided to cancel. Your insurer is also likely to charge you a cancellation fee.

Your overall charges for an early exit vary between insurers, so check your policy terms and conditions to know how much you have to pay.

Can I dispute the car insurnace cancellation fee?

Yes, you can challenge a car insurance cancellation fee. How far you’ll get depends on what’s laid out in your policy and whether the fee seems fair. If the fee is clearly explained in your documents and matches up with what other providers charge, you might not have much luck. But, if the fee seems excessive or out of proportion, you may have more success.

Will I get a refund if I cancel my car insurance?

Yes, you’ll usually get a refund if you cancel and haven’t made a claim. Refunds are generally 'pro-rata'—you get back the cost of any unused months, minus any admin fees.

If you paid upfront, you’ll be refunded for the time left on your policy. For monthly payers, future payments will stop, and you’ll only pay for the days you were covered. Just be sure to cancel any direct debits to avoid extra charges.

Cancelling your insurance if you're buying or selling your car

Do I need to cancel my car insurance if I buy a new car?

No - if you’re buying a new car, you don’t necessarily need to cancel your policy.

You should be able to change your car insurance policy to your new car. If the insurer allows it, you can log into your account and make the change.

Your car insurance costs could go up or down for the remaining term of the policy, depending on the new car.

When should I cancel my car insurance after selling my car?

If you've sold your car, call your insurer and tell them you no longer own the car and you want to cancel your policy. They should send you a copy of your no-claims bonus, which stays valid for 2 years.

Make sure you keep your proof of no-claims bonus somewhere safe. The next company you buy car insurance with is likely to want to see a copy of it.

Should I cancel my car insurance if I give my car a SORN?

You don't have to cancel your policy. If you’re keeping your car, but won’t be driving it for the foreseeable future, you can give it a SORN from the DVLA. You then need to decide whether to cancel your current insurance policy.

Why would you want to keep it? Well, your policy could still cover you if your car is stolen, or catches fire. And if you choose to keep the policy, you're also be earning your no-claims bonus.

To SORN your car, you need to fill in the form that's on GOV.UK.

What do I do if my insurer cancels my car insurance?

If your insurer decides it doesn’t want to insure people with your risk profile, they should give you good notice. You should have time to find a new policy before your current policy expires.

Your insurance could also be cancelled because of something you’ve done. For example:

• Failing to declare penalty points on your licence
• Not telling your insurer about modifications to your car
• Failing to report an accident

When you buy a new policy elsewhere, you have to declare that you’ve had a policy cancelled. They might decide that they don’t want to insure you. You can also expect the cost of your insurance to rise.

When you compare car insurance quotes with us, we'll ask you "Have any of the drivers ever had insurance declined, cancelled or special terms imposed?". This is the last question before you see your list of quotes. Make sure to select 'yes' if a previous insurer has cancelled your policy.