There are various circumstances that may result in you wanting to cancel your car insurance, whether you have recently purchased a new car, or have simply changed your provider. Our in-depth guide explains how to cancel your insurance policy, costs that you may be liable for, and whether you may be entitled to a refund.
Insurers must offer a minimum cooling-off period of at least 14 days due to distance selling regulations, where you are able to cancel your car insurance. The cooling-off period should start when you receive your documents or the commencement date of your insurance, depending which comes earlier.
If you cancel within the cooling-off period, the insurer may still apply a fee to cover their costs, so it’s recommended that you check the documentation provided before cancelling to ensure you’re not hit with unexpected costs.
If you want to cancel your insurance after the specified cooling-off period, you are still able to do so but may incur cancellation and administration fees. In addition, you may have to pay for the amount of time that you’ve been insured, which will be worked out using pro-rata and is based on the amount of time you’ve been insured on the car. It is also worth noting that if you cancel your car insurance mid-policy, you will not earn any no-claims bonus due to not completing the full year claim-free.
Read more: how to get proof of no claims bonus
To cancel your policy, you will need to contact the insurance company and make them aware of your intentions. Some insurers may allow you to cancel your policy online, however, you may also need to call and/or provide written confirmation that you wish to cancel. The procedure that you will need to follow should be included in the terms and conditions of your policy documents.
Read more: car insurance policy types
If you declare your car as a SORN (Statutory Off Road Notification) to the DVLA, you are registering the car as off the road - this ultimately means that the vehicle will not be driven or stored on a public road
You can cancel your insurance if you have declared the car as a SORN, however, this will mean that you’ll be liable for the costs if the vehicle is damaged in any way, or it is stolen. If you are nearing the end of the policy, it may also be desirable to keep the car insured to earn your no-claims bonus for the year.
Read more: what is a SORN?
If you are planning to sell your car, or have already sold the vehicle, you may want to cancel your insurance policy, as it is no longer required. If you are selling your car and not replacing it with a new one, you will need to contact your insurance provider to make them aware that you want to cancel. You should request a copy of your no-claims bonus, which will remain valid for two years.
However, if you are selling your current vehicle and replacing it with a new one, you may consider contacting your current insurance provider to make them aware and see if they can transfer the policy to your new car. Depending on the car, your premium could rise or fall, which will help decide whether you change the details or go with a different company. If you choose to cancel your current insurance, it is worth noting there may be cancellation fees and you will lose your no-claims bonus.
Read more: can I sell a car with outstanding finance?
If you’ve made a claim on your insurance, it doesn’t affect your ability to cancel the policy, although you will still be liable for the fees set out in the terms and conditions. You may also be required to pay the policy in full and may not receive a refund for the remaining months. Furthermore, if you pay for your car insurance via monthly payments, you may be asked to pay any remaining payments in a single lump sum if you choose to opt-out of the policy.
Read more: how to claim on your car insurance
If you are cancelling your policy within the cooling-off period, you will be entitled to a refund for the amount you’ve paid, with a deduction for the amount of time you’ve been insured. If you have made a claim since the commencement date, this may also be deducted from the amount of money refunded. The insurance provider may also charge an admin fee, which will be outlined in the policy documents.
If you are wanting to cancel car insurance outside of this period, you may still be entitled to a refund. This could be the case if you have paid for your insurance in full, where you will receive a refund on a pro-rata basis - this will be outlined in your policy documents. Where you’ve opted to pay monthly, you may be eligible for a partial refund on the month paid in advance upon cancellation. If you opt to cancel your insurance, you may be liable to pay a cancellation and administration fee, which will also be found in your policy documentation.
Read more: can I get a car tax refund?
If your insurance is coming to an end and you are keeping the car for another year, you have the choice of either renewing the policy or choosing another company. Your current policy may include an auto-renew clause, therefore if you want to cancel at the end date, you may need to contact your provider before this date. You should ask that the cancellation is effective as of the final date on the agreement, which ensures that any cancellation fees are avoided.