Everything you need to know about cancelling 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.

Daniel Hutson
From the Motor team
minute read
Do you know someone who could benefit from this article?
Posted 13 JULY 2020

Can I cancel my car insurance policy?

A typical car insurance policy will last 12 months but 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. And if you took out your car insurance policy via a broker, be aware that the broker could charge you a cancellation fee, as well as the insurance provider. 

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

Yes, 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. However, you may have to pay an administration fee, so check the policy terms and conditions.

The 14-day cooling-off period starts when you receive the paperwork, and it's an entitlement by law for all types of insurance.

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

It depends. If you cancel your policy, be prepared to pay cancellation charges as well as administration fees. It could be that those charges add up and cancel out any refund you were expecting. Otherwise, there are these things to consider as well:

  • If you paid for your policy in full upfront, your refund will be calculated on a pro-rata basis, minus any charges. For example, if 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, then you might not get a refund. In fact, you may 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. Also, be aware that if you selected to include optional add-ons that are supplied by another company, such as breakdown cover, you could still be paying for those add-ons after you've cancelled your car insurance policy and you might need to contact the add-on provider to cancel.
  • If your insurance provider decides to cancel your policy for a specific reason, it's most unlikely that you'll receive a refund

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.

What happens to my no claims discount if I cancel my insurance policy?

If you cancel your insurance mid policy, it's unlikely that you'll earn that year's no claims discount. That's because you can only earn the discount after one full year of claim-free driving.

I've bought a new car. Do I need to cancel my existing car insurance?

Not necessarily. Most insurance providers will update your existing policy to cover the new car. Just bear in mind that your insurance premium could go up or down depending on the type of car it is. Also, expect to pay an administration fee for the update.

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 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, you should talk to your insurance provider directly.

How do I cancel my insurance policy for my car?

You need to tell your insurance provider you want to cancel. Insurance providers have different procedures for cancelling. These will be written in your policy terms and conditions.

You might be expected to inform your insurance provider in writing, either by a letter or email.

If you're able to cancel your policy by phone, make a note of the time, date and the name of the person you spoke to. It's worthwhile following up the conversation in writing too, just to be sure.

How can I save money on my car insurance?

By simply comparing car insurance with us, you could save up to £283** on your premium.

Once we have your details we'll show you policies based on price, cover level, add-ons or annual and monthly payment terms, leaving you in the driving seat when it comes to choosing the right policy for you.

**Based on Online independent research by Consumer Intelligence during August 2020. 50% of customers could achieve this saving on their car insurance through Compare the Market.

Looking for a quote?

Compare car insurance in minutes to see if you can save

Get a quote
Compare car insurance Get a quote

comparethemarket.com uses cookies to offer you the best experience online. By continuing to use our website, you agree to the use of cookies. If you would like to know more about cookies and how to manage them please view our privacy & cookie policy.