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Cancelling your car insurance policy


From cancellation charges to cooling-off periods, here's what you need to know about cancelling your car cover.

Cancelled stamp

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.

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Cooling-off periods | Cancelling a policy mid-cover | Consequences of cancelling early | Cancelling before an auto-renewal | Buying a new car? | How to cancel a policy | Disagree with cancellation charges?

Is there a cooling-off period?

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

This means that if you want to end a policy within two weeks of receiving your policy, you should be eligible a 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.

On the other hand, if your policy hasn’t yet started by the time you cancel, you should only have to pay the admin fee.

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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 your car insurance policy 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.

Want to cancel your car insurance before it automatically renews?

Man tearing up paper

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 your car insurance

If you decide you do want to go ahead and cancel, you’ll need to contact your insurer. 

Insurance companies have different procedures for cancellations, so it is best to speak with them directly or check your policy for instructions. 

What to do if you disagree with cancellation charges

The potential cost to cancel 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.

Rounding up

If you are considering cancelling your insurance policy then below is a suggested step-by-step summary of what to do when you are ready to leave your insurer. This will ensure that you have all the information you need before you go through with cancelling. 

  1. Find out if you are still within the cooling-off period
    If you’ve only just recently purchased your insurance, you could still be eligible for your money back, excluding the administration fee, as long as it’s within the two-week window, and you haven’t made a claim.

  2. Find out how much you’ll be expecting to pay to cancel your car insurance
    If you have already passed the cooling-off period, the potential cost to cancel may increase, and there may also be a limit on any refund you’re entitled to.

  3. See what the consequences are for cancelling your policy
    This includes your no-claims bonus and potential add-ons you have with this policy that may not be refundable.

  4. Are there any other avenues to pursue instead?
    If you are cancelling your policy to change vehicles, for example, your insurance company might be able to transfer your policy to your new vehicle.

  5. Are you near your renewal period?
    Auto renewals are common with insurers, but if you’re not looking to renew your policy then ensure this is communicated with your insurer as soon as possible.

  6. Contact your insurer
    Either check your policy instructions or give them a direct call. Make sure you understand your insurer’s specific cancellation procedure, including their respective complaints policy, should the need arise.

  7. Compare insurance quotes
    If you are dissatisfied with your insurance policy and have cancelled your policy, why not shop around and compare quotes to find the best policy for your needs?


First published 1 January 2011


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