Can I cancel my car insurance anytime?

Yes. In the UK, you can legally cancel any standard car insurance policy. Whilst car insurance contracts usually last for 12 months, you can cancel at any time during those 12 months. It doesn’t matter if you’ve paid upfront or if you pay in monthly instalments.

If you paid your insurance up-front, you’ll be refunded for the remainder of your policy. For instance, if you’ve paid for 12 months and you cancel after two months, you’ll be refunded for the remaining 10. If you pay in monthly instalments, you’ll simply stop paying after you’ve cancelled your policy.

You’ll likely have to pay a cancellation fee for ending your contract. The amount you pay will vary by insurance provider.

If you cancel before the policy start date, there’s usually no cancellation fee. If you bought your car insurance via a broker, you may also have to pay a cancellation or admin fee to the broker.

You also usually won’t earn that year's no-claims bonus if you cancel your car insurance policy.

How do I cancel my car insurance?

How you cancel a car insurance policy will vary by provider. You should find details on how to do so in your policy documents, and you can usually check on the company’s website too.

Many insurance providers will allow you to cancel a car insurance policy online, but some will require you to do so over the phone. If you have a shared policy, the main policy holder will have to speak to the insurance provider.

Make sure you have your policy documents to hand when cancelling your car insurance, as you’ll need key details like your policy number. If you’ve lost your policy documents, or you never had printed ones, you may be able to view them in your online account or order a printed copy of them.

Cancelling if you pay monthly

Whether you paid for 12 months or you pay in monthly instalments, you’ll need to follow the same cancellation process.

If you pay monthly, you can’t just cancel your direct debit with your insurance provider as this will be a breach of your insurance contract. Missed payments will appear on your credit report, likely lowering your credit score, and you may incur additional late payment fees.

How much does it cost to cancel car insurance?

Most insurance providers will charge you a fee for cancelling your car insurance. You may also have to pay an admin fee. This fee will vary by provider and can also depend on the type of insurance you have. And if you bought your insurance via a broker, you may have to pay another cancellation fee and/or admin fee to them too.

Check your policy documents to find out whether you’ll have to pay a cancellation charge and how much it’ll be.

Can I challenge cancellation costs?

If you’re not happy with any cancellation or admin fees, you can try to appeal them. You’ll find the appeals or complaints procedure in your policy documents or on your insurance provider’s website. Keep records of any emails or letters you send, any phone calls you make, and try to get the names of everyone you speak to.

If you make an official complaint, your insurance provider has eight weeks to issue you with a decision. If you’re not happy with that decision, you can take the matter up with the Financial Ombudsman Service.

Should I cancel my insurance for a cheaper policy?

One reason to cancel your insurance policy is to switch to a cheaper one. If you’re thinking about doing so, ask yourself the following questions:

Will you be refunded for money you’ve already paid?

Most insurance providers will refund you pro-rata for the outstanding months of your policy. However, this may not be the case if you’ve already made a claim. You’ll need to check your policy documents with your insurance provider.

Will you have to pay a cancellation or admin fee?

In most cases, you’ll have to pay a cancellation fee, and potentially an admin fee on top of that. Find out if this is the case, and how much the fee(s) will be.

Will you miss out on your no-claims bonus?

If you cancel an insurance policy, you may well miss out on your no-claims bonus that year. You’ll need to consider this when it comes to switching policies.

Does the benefit of switching outweigh the costs?

If you save money by switching to a new car insurance policy, you’ll need to make sure that the amount you save will cover any cancellation or admin fees. You will also need to factor in any losses you make as a result of taking a partial refund of your existing policy.

Will I receive a refund If I cancel my car insurance?

In many cases, you’ll receive a refund if you cancel a car insurance policy you’ve paid up-front. That refund will typically be for the months you’ve not used. You won’t be reimbursed for the months you were insured by the policy.

But insurance providers and policies do vary, as will your circumstances. Always check with your insurance provider about what refund you may be entitled to.

Will I receive a refund if I cancel during the cooling-off period?

By law, every insurance policy sold in the UK must include a 14-day cooling-off period where you’ll be given a refund if you request one^[1]. The cooling-off period usually starts when your policy begins or when you receive your documents.

If you cancel your insurance contract during this 14-day period, you’ll be given a refund. But you likely won’t get 100% of the cost of the policy back. The days it will be active will typically be deducted from your refund, and you may have to pay a cancellation fee. Check the terms and conditions of your policy to make sure.

Will I get a refund if I cancel after the 14-day cooling-off period?

In most cases, you will receive a refund on an insurance policy if you cancel it at any time.

Typically, you’ll be refunded pro-rata, for the time left remaining on the policy. You’ll likely have to pay a cancellation fee, and possibly an administration fee, meaning you may not receive much money back if you cancel towards the end of the policy. You may also miss out on your no-claims bonus for that year.

Be aware that you may not be refunded automatically for additional add-ons taken with a third-party company, like breakdown cover. You might have to cancel these separately with the other companies.

Will I get a refund if I've made a claim on my car insurance?

You most likely won’t get a refund if you cancel a policy you’ve already made a claim on. If you pay by monthly instalments, you may be asked to pay the remainder of the policy up-front if you cancel it.

Can I cancel my car insurance if I pay monthly?

Yes, but make sure you officially cancel your policy. Don’t just cancel your monthly payments with your bank, as this will put you in breach of your contract and it could affect your credit score.

Cancel your insurance contract via your insurance provider. You’ll likely have to pay a cancellation fee and possibly an admin fee for cancelling your contract early.

Can I cancel my car insurance if I pay by direct debit?

You can, but make sure you cancel your insurance policy properly with your insurance provider. Don’t just cancel your direct debit via your bank account, as your policy will still be active and you’ll incur missed payments on your credit report^[2], which can damage your credit score.

If your policy provider cancels your insurance because of non-payment, that can also show up on your credit report, making it more difficult to get insurance in the future.

[1] https://www.citizensadvice.org.uk/consumer/insurance/cancelling-an-insurance-policy/

[2] https://www.citizensadvice.org.uk/consumer/insurance/cancelling-an-insurance-policy/