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How to cancel your car insurance

Want to cancel your car insurance policy? Our easy-to-follow guide tells you how to do it, what costs you might have to pay and whether you're entitled to a refund.

Want to cancel your car insurance policy? Our easy-to-follow guide tells you how to do it, what costs you might have to pay and whether you're entitled to a refund.

Written by
Kate Hughes
Insurance expert
Last Updated
24 FEBRUARY 2023
6 min read
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Can I cancel my car insurance policy?

A typical car insurance policy lasts 12 months but yes, you can cancel it at any time. Just bear in mind that you won't automatically get your money back and your insurance provider may charge you a cancellation fee.

How do I cancel my insurance policy for my car?

Cancelling your car insurance should be pretty easy, although each provider might have a slightly different procedure. Some will let you cancel your policy online, while others will want to speak to you by phone.

To cancel your car insurance:

  • Have your car insurance policy with the policy number to hand
  • Call your insurance provider (it must be the policyholder who does this)
  • Tell them you want to cancel your car insurance and ask what fees are involved
  • They may ask why you’re cancelling, but that’s okay, just be honest
  • Keep a note of dates, times and who you speak to, just in case there’s an issue further down the line
  • If you’re taking your car off the road, you must register it as SORN with the DVLA.

Top tip

If you want to continue driving your car, you must be insured. It’s illegal to drive, or even park, on UK roads without car insurance. You must have a new policy in place before you cancel your current one.

Will I get a refund if I cancel my car insurance during the cooling-off period?

When you take out a car insurance policy, by law, you’ll be entitled to a “cooling off” period. That means you have at least 14 days from when you receive the paperwork to change your mind about your insurance, cancel your policy and get a refund.

If you cancel and transfer your car insurance within the 14-day cooling-off period, you're entitled to a refund minus any days the policy was active for. But check the policy terms and conditions because you may have to pay an administration fee too.

Will I get a refund if I cancel after the 14-day cooling-off period?

It depends, so be prepared to pay cancellation charges and admin fees if you cancel your policy before it’s due to end. Those charges could quickly add up and cancel out any refund you were expecting. It’s also worth considering a couple of other things:

  • If you paid for your policy in full upfront, your refund will be calculated on a pro-rata basis, minus any charges. So if, for example, you cancelled your policy after three months, you’d be entitled to a refund of nine months, minus a cancellation charge and any administration fees.
  • If you pay for your insurance monthly, you might not get a refund. In fact, you might have to pay extra to cover the time you've been insured, as well as a cancellation fee and any administration charges.
  • Add-ons are often non-refundable. And be aware that if you have optional extras with another company, for example breakdown cover, you might need to cancel those too.
  • If your insurance provider decides to cancel your policy for a specific reason, it's unlikely that you'll receive a refund.

Can I cancel my car insurance if I pay monthly?

Yes. Plenty of people choose to pay their car insurance monthly, and there’s nothing to stop you from cancelling. Just tell your insurance provider that you want to cancel, and they’ll arrange it for you.

You’ll probably face some admin and cancellation fees though, so make sure you know what to expect before cancelling.

Don’t just cancel your direct debit and assume your car insurance is cancelled too, you’ll need to let your insurance provider know before you go ahead and stop payments.

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

Yes, you can. If you’ve paid upfront, though, you probably won’t be eligible for a refund. If you pay by monthly instalments, you’ll still have to pay for any remaining time you have on your policy, or you can pay it off as a lump sum in one go. The same applies if your car’s been written off.

Can I dispute the cancellation costs?

You can try to dispute the cancellation costs, but you may not be successful. A better option is to make sure you know exactly what the car insurance cancellation fees are before you take out the policy so you aren’t hit with any surprises.

If you think the charges are excessive and you can explain why you think they’re unfair, talk to your insurance provider directly. Don’t forget to keep a record of dates, times and points of discussion whenever you speak to them, as well as keeping copies of any correspondence – emailed or written. This evidence will help if you’re unsatisfied with the outcome and want to take your case to the Financial Ombudsman Service (FOS).

What happens if my insurance provider cancels my policy?

There are a few reasons your insurance provider might cancel your car insurance policy. This could be because you’ve not kept up with your payments, or you’ve violated the terms of your policy somehow. If that’s the case, you’ll no longer be covered and will need to sort out new cover as soon as possible. It’s illegal to drive a car without insurance, so you need to either get new cover or declare the vehicle as SORN or off the road by registering the change of status with the DVLA.

You may find it more difficult to get a new insurance policy if you’ve had a previous one cancelled, and you’ll need to declare this to every new insurance provider in future. Just be as honest as possible, as it’s always worse to be caught out in a lie. It might be harder to get cover, so you may need to find a specialist provider.

Frequently asked questions

If I sell my car, when should I cancel the insurance?

As soon as it’s sold. If you no longer own the car, and aren’t intending to buy another one, there’s no point in paying for cover you don’t need.  
 
Also be aware that if you don’t cancel, and the new owner has an accident, a claim could still be made against your insurance.  

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

If you’re selling your car to buy a new one, you can talk to your provider to see if you can transfer your policy to the new car. It could be less hassle than cancelling and taking out a new one — just make sure your provider can insure your new car.

You might be charged an admin fee for changing your policy, and the cost of your car insurance could go up or down, depending on the model of your new car. But it’s still simpler than taking out a whole new policy.

Should I cancel my insurance if I register my car SORN?

If you declare your car as SORN, you won’t need to insure it. This means you can cancel your existing policy once it’s declared off the road. But that doesn’t happen automatically. You’ll still need to get in touch with your provider to cancel.

What other charges can you expect after cancelling car insurance?

Different insurance providers can have different terms for ‘cancellation fee’. Some might call it an ‘administration fee’, others, a ‘processing fee’. Any charges should be explained in the terms and conditions of your policy, so check before cancelling, so you know what to expect.

And watch out for extra costs if you bought your policy through a car insurance broker. They could charge you a cancellation fee on top of the insurance provider’s fee.

Should I cancel my car insurance or let it auto-renew?

Auto-renewing your car insurance can seem like less hassle. You don’t need to do anything, and you won’t run the risk of being uninsured. However, auto-renewing every year means you could be missing out on potential savings. Your renewal quote might not be the cheapest available, so it’s worth shopping around for a better deal.

To help make this as easy as possible, we can compare car insurance quotes from dozens of providers to try and find you a cheaper deal within minutes. If you find a better price, you can cancel your existing policy and take out the cheaper one.

Will I lose my no claims bonus if I cancel my car insurance?

If you cancel your insurance mid-policy, then yes, you’ll probably lose that year’s no claims discount because you can only earn the discount after one full year of claim-free driving.

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