Cancelling your car insurance

Last updated by mustard.co.uk on June 1st, 2021

If you want to cancel your car insurance but aren’t sure about what your rights are or whether you’re entitled to a refund, our handy guide sets the record straight. Here are the facts: 

Can I cancel my car insurance policy?

Yes, even though car insurance policies usually last one year, you can cancel it at any time.  Depending on when you do, you may have to pay a cancellation fee and you might not get all your money back.

Cancelling car insurance within the cooling off period

By law, you get a 14-day cooling off period when you buy car insurance. The 14 days begins on the policy start date or from the day you receive your policy documents  (whichever is later).

If you cancel within the 14 days you’ll only be charged for the days your policy was active for. Your insurer might also charge you a small admin fee for setting the policy up in the first place but everything else will be refunded. 

Can I cancel my car insurance after the cooling off period?

You can still cancel your car insurance even after the cooling off period, but you could face a cancellation fee and further admin costs. What you get back will also depend on how you paid for the policy in the first place.

Before you cancel your car insurance, check any terms and conditions set out in your policy. Some insurers may not offer you any refund at all if you’re more than halfway through your policy. If this is the case, it often makes more financial sense to see your policy through to the end, than to cancel it part way.

If your policy includes added features provided by a third party (like breakdown cover) you may need to contact the provider directly to cancel their services. You should also bear in mind that any refunds will be at their discretion. 

How do I cancel my car insurance?

If you decide to cancel your car insurance policy, your terms and conditions should set out any specific procedures you need to follow. In most cases you should be able to do it:

  • Online – if you manage your policy online, you might be able to cancel it simply by logging into your account and taking the necessary steps.
  • By phone – if you call your insurer to cancel your policy then make a note of the time, date and if you can, the name of the person you spoke with. It’s also a good idea to follow up the conversation with an email.
  • In writing – some insurers may want written confirmation which could be a letter or an email. Remember to include all your relevant details including name, address and policy number.

Whatever method you use to contact your insurer, always make sure you get confirmation that your policy has actually been cancelled.

Cancelling car insurance

What should I do if I disagree with the cancellation charges?

You should contact your insurer if you want to discuss cancellation charges or you think there’s been a mistake.

If you don’t think your insurer is being reasonable or isn’t taking your complaint seriously, then you can refer it to the Financial Ombudsman Service.

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

Yes, even if you’ve made a claim, you can still cancel your car insurance but you probably won’t be entitled to a refund if you’ve paid for your policy in full. This is because your policy has paid out and a refund wouldn’t be fair on the insurer. 

If you want to cancel your policy after a claim and you’re paying in monthly instalments, you could be asked to pay the outstanding amount in one lump sum. 

Does stopping my DirectDebit cancel car insurance?

No, if you pay for car insurance by monthly DirectDebit, cancelling the instruction does not automatically cancel your policy. It just means the automatic payments will stop so your insurer will end up chasing you for the unpaid amount.

What happens to my no claims bonus if I cancel car insurance?

If you cancel within the 12-month period, you won’t earn any no claims bonus for that year. How this affects your overall discount will depend on the number of years you’ve already accumulated.

For example, if you have more than five years of no claims then there’s a good chance you already get the maximum discount available. In this instance, missing one year isn’t likely to have a big impact on future premiums.

On the other hand, if you’re a relatively new driver with just one or two years’ worth of no claims, you might want to think twice before cancelling your policy as it could significantly affect future discounts on your premium.  

Do I need to cancel my existing car insurance if I’m buying a new car?

Buying a new car doesn’t mean you have to cancel your existing policy. In most cases, your insurer will be able to amend it to reflect your new vehicle. 

If your new car is more powerful or modified, you should expect your premium to increase. If this applies to you and you’re after ways to keep insurance costs down, head to our guide on how to save money on your premium.

If you’ve sold your car and have no plans to replace it, you should cancel your policy as soon as possible as there’s little point in paying for a policy you don’t need.

Should I cancel car insurance if I SORN my car?

If you’re not using your car, you can declare it off road with a SORN (statutory off road notification). Doing this means you don’t need to tax or insure it so you can cancel your car insurance policy.

Remember that if you SORN your car, it has to be kept on private land (which could be a garage or driveway). 

Can my insurance provider cancel my policy?

In certain circumstances your insurer may choose to cancel your policy, for example if they suspect:

  • Fraud – this includes cases of fronting where a more experienced driver says they’re the main driver in order to get cheaper insurance for a younger or less experienced motorist.
  • Non-disclosure – this is when insurers haven’t been given all the facts; even if non-disclosure was unintentional, for instance if a policyholder forgot to mention a previous accident.
  • Non-payment– if a policyholder has missed one or more payments, then insurers have the right to cancel. If you know you’ll struggle to meet an instalment, speak to your insurer before you miss it – they’re more likely to be sympathetic beforehand and come to an arrangement about payment.
  • Breaking policy conditions — if your policy has certain rules and conditions, your insurer can cancel it if they feel you’ve broken them. 

If your insurer decides to cancel your policy, they should tell you straight away so that you can find an alternative.

If you’ve been unlucky enough to have a policy cancelled or refused, it can make finding car insurance trickier or more expensive but you’ll still need to tell insurers if this is the case. If you don’t, this in itself counts as ‘non-disclosure’ so you risk your policy becoming invalid or being cancelled further down the line. 

 

Compare deals on your car insurance

At mustard.co.uk, you can compare car insurance quotes from a range of leading UK insurers. To start your search, simply fill in our online quote form or speak to a friendly expert on 0330 022 8814. 

 

Other Articles you might be interested in:

Who is mustard?

We are experts in insurance comparison, dedicated to helping you compare quotes online quickly and easily.

We search quotes from some of the UK’s leading insurance providers to help you find the right policy for you at a price to suit your budget.

Don’t just take our word for it, take a look at some of our car insurance comparison reviews.

Insurance as individual as you are

Compare Car Insurance Quotes