Buying car insurance is not just a huge expense, but a big commitment, lasting 12 months, or longer if you decided to auto renew.
But things change:
maybe you found a cheaper car insurance deal elsewhere
or you want to sell your car
or you don't want to be tied down to your old car insurance policy
All about cancelling your car insurance, car insurance cancellation charges, and the all-important 14-day cooling off period.
The first thing you need to know about cancelling car insurance is that it’s possible – you are allowed to do it.
Although there are some things to bear in mind:
your car must be insured at all times, so make sure you don't leave any gaps between cover
you’ll probably to have to pay a car insurance cancellation fee and possibly some other admin charges
Having a one-year commitment to your car insurance policy can feel like a burden, but the truth is you can cancel at any time.
If you know what the rules are relating to your car insurance cancellation policy, you can avoid paying a hefty fee when you do eventually need to cancel.
Any charges and how much you will have to pay for cancelling early will depend on:
your insurer's policy
how much you have already paid for your cover
how long you have left on the insurance term
Yes, you can but you may have to pay some fees or admin costs.
If you pay for your car insurance on a monthly basis, the longer you have left on your insurance policy term, then the more you will likely have to pay if you cancel your car insurance.
You might be only a few months into your car insurance policy, but you may
need to raise some money by selling your car,
maybe you’ve shopped around and realised another insurer can give you a better deal
or you've made a claim on your insurance, and you are now worried that the insurer won't let you cancel the policy
It’s always best to shop around for your car insurance and compare quotes to get the best deal.
Then the less you have paid already, the more you will have to pay in order to cancel your car insurance policy early.
Each car insurance provider has a different procedure when it comes to cancelling so check your insurance documents first.
In most cases you should still be able to get a refund on some of the months remaining on your insurance term.
All of the extra features you are paying for on your car insurance policy, such as breakdown cover and legal expenses cover, are likely to be non-refundable.
So, if you cancel your car your insurance, you probably won't get the money back on those features.
You will also lose your no claims discount (NCD) for that year if you cancel your car insurance policy early. Any previous years NCD will remain.
One way to cancel your car insurance early without paying anything is to do it during the cooling-off period. This is within 14 days of taking out the policy.
You may have heard of the 14-day cooling off period when researching how to cancel your car insurance policy. Luckily, it can help you cancel your car insurance without having to pay anything (although there might be a catch depending on your insurer).
the cooling off period is a legal requirement for all car insurance policies
it is usually applicable for the first 14 days of when the cover starts or when your policy documents are sent to you, whichever is later
some car insurance companies have a longer cooling off period, but as a minimum this period is 14 days and that is generally what most policies have
During the cooling-off period you are free to change your mind and cancel your policy for any reason at all.
Some insurers will charge an administration fee for cancellations during the cooling off period, but this will still be a lot cheaper than what you will pay if you cancel any time after.
Before you buy any car insurance policy read the cancellation terms and definitely check the details surrounding the cooling off period.
If you pay for your car insurance monthly, you are not necessarily paying for the cover month to month.
If you agree to a monthly payment you are taking a credit agreement allowing you to spread the cost of your 12-month insurance policy over a monthly basis.
cancellation charges will not necessarily be the same as someone who paid for the policy upfront
charges will vary depending on your policy and how long you have left on your policy
you will probably have to pay an extra penalty to buy yourself out of the credit agreement, which is calculated as a percentage of the total policy price
You are, however, most likely entitled to a refund when you cancel your car insurance regardless of whether you pay monthly or upfront unless you have made a claim that year, more of which later.
Most insurers will not offer a refund if you are cancelling with only two months to go, so if you are that far into your policy, it will usually be cheaper to just see it through to the end.
You will usually be refunded on a pro rata basis for the months you will not be receiving car insurance cover for, minus all the cancellation charges.
Before cancelling, especially if you are planning to switch to a cheaper deal, read the cancellation conditions and see if the savings of your new deal outweigh the costs of cancelling your current car insurance policy.
You can cancel your car insurance if you are selling your car, or for any reason.
If you are selling your car and not planning to get a new one, you absolutely should cancel your insurance.
It is worth speaking to your insurer and see if they will cover the new vehicle to avoid you paying a cancellation fee.
If you’re not happy with their quote, you can shop around and cancel your current policy if the savings on the new policy will outweigh the cancellation fees – just remember that you may lose any no claims bonus.
You may also find
you get charged the administrative costs of updating the policy
your premiums increase if the insurer finds there is added risk with insuring your new car
your new car could be in better condition and in a lower insurance group, so, you could get cheaper car insurance from the same policy
It is always best to shop around for car insurance and compare quotes
However, if you decide your car insurance still isn't going to work out for your new car then it could work out cheaper to move to another deal. Just bear in mind all of the costs that could come up when cancelling. It may end up being cheaper to stick with the same deal.
You can still cancel your car insurance even after you have already made a claim.
you won't be able to claim a refund on any months you have already paid for
if you pay monthly, you will have to pay off the remainder in a final lump sum
This is the area of cancellation you ought to be wary of. If you have made a claim and want to cancel, weigh up if it's worth it, as it could be quite expensive.
If you let your policy auto renew, this means that you will be pulled into another 12-month deal with your insurance provider, so you should cancel at the end of the policy if you are shopping around for a better deal.
If your cover is coming to an end and due to renew, it’s a good idea to shop around on a price comparison website to see if you could get a better deal than the renewal price offered by your current insurer.
If you find a better quote, simply call your insurer and ask them not to renew your cover. If you ask them to cancel the policy effective of the day it was due to come to an end, you will not be charged a cancellation fee.
You don’t need to own a car to get car insurance. Unlike a full car insurance policy you won’t build up a no claims bonus but it does mean you can drive someone else’s car, as long as you have their permission. If you are only planning on borrowing a car you can also compare quotes for short-term or temporary car insurance
If you are needing to insure several cars search multi-car insurance policies.
Multi insurance might also be suitable:
if you own more than one car
if you’re a family with more than one driver
if you’re a couple with more than one vehicle
Get a quote and see if it's worth cancelling your car insurance today:
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