Cancelling your car insurance
Deciding you want to cancel your car insurance is one thing – doing it can be quite another, especially if you’re not entirely sure about what your rights are, or whether you’re entitled to a refund. Our guide to cancelling car insurance, sets the record straight – so, here are the facts.
When should I tell my insurer?
If you want to cancel your car insurance policy, you should tell your provider as soon as you can. In most cases you should be able to cancel by just calling them, or sending an email, but some insurers may want a written letter. It’s always worth checking policy documents to see if your insurer has any defined protocols for cancellation.
Bear in mind that if you’ve set up a Direct Debit, cancelling the debit instruction isn’t the same as cancelling your policy – it will just mean that the automatic payments will stop and you’ll be presented with a bill for the unpaid amount.
Does car insurance come with a 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 the later.
You can cancel your policy at any time during the 14-day period. If you do, your insurer will charge you for any days that the policy was active for; but you’ll be refunded anything else. Your insurer may also charge you an admin fee for setting up the policy in the first place.
Can I cancel car insurance after the cooling off period?
You can cancel your insurance policy at any time, but if you cancel it after the cooling off period, then you’ll probably face a hefty cancellation fee and further administration costs.
If you paid for your policy in one lump sum and have not made any claims, then your insurer may offer you a refund depending on how many months you have left.
Always check any terms and conditions set out in your policy before you cancel – some insurers may not offer you any refund at all if you’re nearly, or more than halfway through your policy.
In some instances, it makes more financial sense to see the remainder of your policy through, than to cancel it part way. Remember – if you do cancel within the 12-month period, you won’t earn any no claims bonus for that year.
Can I cancel my car insurance if I’ve made a claim?
You can still cancel even if you’ve made a claim, but it’s unlikely you’ll be given a refund for the remainder of the policy, even if you’ve paid for it upfront.
If you’re paying in monthly instalments, then you’ll be expected to fork out for the rest of the policy in full.
It might seem unfair, but the thinking behind this is that if you’ve made a claim, then the policy has served its purpose – in which case a refund wouldn’t be appropriate.
When should I cancel if I’m selling the car?
If you’ve sold your car and haven’t replaced it, you should cancel your policy as soon as possible as you no longer own it.
If you’ve replaced your car, then your insurer can amend your existing policy to reflect your new vehicle – if it is more powerful, or has been modified, then your premium is likely to increase. Find out what you can do to reduce this premium.
Can I cancel if I pay monthly?
You’re still entitled to cancel your policy at any time even if you pay your premium monthly. However, you’ll probably have to pay your insurer to cover the time your policy has been active for and you may not be entitled to any refund at all.
Getting value for money on your car insurance
At mustard.co.uk, we understand that sorting out your car insurance can be confusing, but our handy guides will help you make a decision based on facts. Plus, with our Cheapest Price Guarantee*, you can be confident that when you’re comparing quotes with mustard.co.uk, we’ll always give you value for money too.