Everything you need to know about cancelling car insurance

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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. 

Frequently thought questions

Can I cancel my car insurance policy?

Yes. A typical car insurance policy will last 12 months but you can cancel it at any time; but bear in mind that you won’t automatically get your money back and you may be charged a car insurance cancellation fee.

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

When you buy car insurance, you’re entitled by law to a 14-day cooling off period, which starts when you receive the paperwork. If you cancel and transfer your car insurance within this 14-day period, then you are entitled to a refund minus any days that the policy was active for. You may also have to pay an administration fee, so check the policy terms and conditions. 

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

If you decide to cancel your policy outside of the cooling off period, then be prepared to pay cancellation charges as well as administration fees. It could be that those charges add up and cancel out any refund. 

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 would 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. Instead, you may have to pay extra to cover the time you’ve been insured, as well as a car insurance cancellation fee and any administration charges.

Add-ons are often non-refundable. Be aware, too, that if you selected to include optional add-ons to your policy that could be supplied by another company - breakdown cover for example - you could still be paying for those add-ons after you’ve cancelled your car insurance policy. 

However, if your provider cancels your policy instead, which could be for a number of reasons, then it's more unlikely that you will receive a refund. 

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

Yes, you can. If you’ve paid upfront, you probably won’t be eligible for a refund. If you pay by monthly instalments, then you’ll still have to pay for any remaining time you have on your policy (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?

You will only be awarded a no claims discount if you have one full year of claim-free driving, so if you cancel your insurance mid policy, you won’t earn that year’s discount.

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

If you’re buying a new car, you might not need to cancel your existing policy as your insurance provider will usually update it to cover the new car. But bear in mind that your insurance premium could go up or down, depending on what your new car is, and they will typically charge you an administration fee.

Can I dispute the cancellation costs?

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

However, if you think what you’re being charged is unreasonable, then you can complain to your insurance provider directly – but be prepared to explain why you think the charges are unfair.

How do I cancel my insurance policy for my car?

You need to tell your insurance provider that you want to cancel. Insurance providers have different procedures for cancelling, so check your policy document if you’re not sure what to do. You might also be expected to inform your insurance provider in writing – in a letter or by email.

If you do speak to someone and cancel your policy over the phone, make a note of the time, date and the name of the person you spoke to. In this situation, it’s also worthwhile following up the conversation in writing too.

How can I save money on my car insurance?

That’s easy. Compare car insurance with us and we’ll help you find a good deal at a price you can afford. All you need to do is tell us a bit about you, your car and what you need. We’ll show you policies based on price, policy cover level, add-ons or annual or monthly payment terms, leaving you in the driving seat when it comes to choosing what’s best for you. 

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