Would you like to cancel your car insurance policy early? If you're not sure how to do it or what to expect, below we explain exactly how cancelling your car insurance mid policy works. Learn about the different charges you might need to pay, how to go about it and more.
- Can I cancel my car insurance early?
- Do I cancel my car insurance if I'm buying a new car?
- How much does it cost to cancel car insurance?
- How do you cancel car insurance mid policy?
Can I cancel my car insurance early?
Yes, no matter who you're insured with, or how far you are into the policy year, you'll be able to cancel your car insurance early. In fact, cancelling car insurance is very common and can happen when someone sells their car or finds a better deal elsewhere. A car owner may also cancel their car insurance policy if they decide not to drive their car anymore, taking it off the road and declaring a 'Statutory Off Road Notification' (SORN).
Cancelling car insurance after a claim
Yes you can cancel your car insurance if you've made a claim—but you must pay the whole annual premium and you won't get a refund. All car insurance policies work this way, with terms stating that you must pay the entire premium in event of a claim. And if you pay monthly you'll need to make the car insurer whole on the entire year of premiums even if you cancel.
The exception to this is windscreen claims (e.g., repair of a stone-chipped windscreen), which typically do not trigger an obligation to pay the entire year of premiums if you cancel after claiming.
- If you pay annually, upfront then you won't get any refund on prepaid premiums if you've made a claim. You will also need to pay any cancellation charges laid out in your policy documents.
- If you pay monthly then you will need to pay the insurer for the rest of your monthly payments through to the end of your policy year, plus any cancellation charges.
Example: You have a car accident one month into your policy year. Your car is damaged beyond repair and written off. Your car insurer pays your claim, and you are obligated to pay the whole premium even though you only used up one month of cover and your car is no longer drivable. If you paid upfront, this means you will not get a refund. If you pay monthly, this means you continue to pay 11 months of car insurance even though your car is no longer being driven.
Can I cancel my car insurance extras?
While you can cancel car insurance extras like breakdown cover, in most cases you won't get any refund on coverages you've added on. Non-refundable extras include breakdown cover, windscreen cover, motor liability, courtesy car, and more.
This is a very important piece of information to keep in mind when comparing new car insurance offers. If one company offers a fully loaded policy with all extras included for £X, and another company offers a basic policy onto which you add extra coverages for a slightly cheaper total price marginally less than £X, it might be better to pay up for the fully loaded policy. That way, if you need to cancel early into the policy term you're likely to get a larger premium refund.
What happens to my NCD when I cancel my car insurance?
If you cancel your car insurance early, you don't get any credit for the partial year of cover without claiming. That is, the NCD should revert to the level from the beginning of the policy year.
Do I cancel my car insurance if I'm buying a new car?
It depends. If you're swapping cars (e.g., selling your current car and replacing it with another car) then you might not need to cancel your car insurance—instead, you can potentially transfer the policy to your new car.
First ask your current insurer how much they would charge to insure your new car. If you're happy with the price, you won't need to cancel your policy. You can stay with your current insurer, although you might need to pay an admin fee as well as any extra premium required to insure your new car.
If you're unhappy with your current insurer's price then compare the market to look for better deals. If you find a cheaper alternative for your new car then you will need to cancel your existing car insurance (making sure you're covered until you've sold the car). However if you do want to switch to another insurer, if there's only a short time left until renewal then it might be cheaper to transfer your existing insurance to the new car, then switch when the policy comes up for renewal (to avoid cancellation charges).
What happens to insurance if I buy my new car before selling my old car?
If it works out such that you buy a new car before selling your old car (e.g., you have two cars to insure for a short time), contact your car insurer ASAP to ask if you're covered for both cars. Some insurers offer a grace period (e.g., a 'delayed substitution) giving you two weeks, for example, of cover for both cars. This gives you time to sell your old car, so you don't have to rush to get rid of it before taking possession of your new car. Any grace period will be up to your insurer, however.
If your insurer doesn't give a delayed substitution grace period, or you're holding onto your car beyond the grace period, you can SORN your old car if you're not planning to drive it. (SORN is essentially registering a vehicle as being off the road so you can't drive it.) The clear drawback to a SORN is that you can't give anyone a test drive until you re-tax and re-insure your car, so this won't work for a lot of people.
Average costs to cancel car insurance
The average fees to cancel car insurance are £24 during the cooling off period and £55 afterwards. However, we've seen cancellation charges anywhere from £0 to £247 or more in the UK market so your cancellation costs could be highly variable depending on who you're insured with. Check your policy documents to learn more about how your car insurer calculates fees at cancellation.
What is the 14-day car insurance cooling-off period?
According to the law (see the FCA document Insurance: Conduct of Business, section 7.1 The Right to Cancel), consumers have the right to cancel a contract of car insurance withing 14 days without penalty and without giving a reason. You can also read more about cooling off periods from Citizen's Advice.
However, car insurance companies may still charge you for cancelling during the cooling-off period under the guise of 'admin fees'. Black box (aka telematics) policies are especially notorious for charging high admin fees for cancelling during the cooling-off period—although we have to say this is somewhat justified because insurer have high initial setup costs for telematics plans from providing, sending out and in some cases arranging professional fitting of the black box.
At any rate, it is nearly always the case that cancelling during the cooling-off period is cheaper than cancelling afterwards.
Will I get a refund if I cancel my car insurance?
You'll probably get a refund when you cancel your car insurance if you haven't made a claim and you paid upfront, but it depends on when during the policy year you cancel. Typically, refunds are calculated on a pro-rata basis, which essentially means that each month of cover costs the same amount (e.g., the refund is 1/12 of the annual premium times the number of unused months).
Pro Rata Car Insurance Refund Calculation: A policyholder who paid £600 upfront for insurance decides to sell their car 4 months into the policy term and cancels their insurance. The insurance company calculates the pro-rata refund for the 8 months of unused premium (8/12 of £600 = £400) less any cancellation fees.
That said, some insurers don't calculate the premium on a pro-rata basis but instead front load the cost onto early months in the policy year using a sliding scale calculation. In that case you end up getting a smaller refund for early cancellation mid policy (vs calculations using a pro-rata system).
Alternate Car Insurance Refund Calculation: A policyholder who paid £600 upfront for insurance decides to sell their car 4 months into the policy term and cancels their insurance. The insurance company calculates the refund using a sliding scale for the 8 months of unused premium (e.g., policyholders get a 50% refund at 4 months so 50% x £600 = £300) less any cancellation fees.
Policyholders cancelling with only a month or two left in the policy year are not likely to get much of a refund, if any, due to cancellation fees and how your insurer calculates the premium owed.
How to cancel car insurance mid policy
Many insurers require policyholders to phone in to cancel a policy (or write)—they don't allow cancelling car insurance online via a customer portal. This system enables an insurer to enquire about the reason for cancellation, to ensure that the cancellation will not result in an uninsured vehicle. Cancellations need to be legitimate (e.g., the car has been sold or you've found a better deal elsewhere), so don't be surprised when you're asked why you're cancelling. There are exceptions to this, of course. For instance, Axa customers can cancel online, as can Quotemehappy.com customers.
The downside of requiring a customer service call to cancel is obviously that cancelling a car insurance policy becomes more difficult (e.g., time consuming). Policyholders frequently complain of being left on hold for extended periods of time while trying to initiate a cancellation.
Car Insurer Cancellation Contact Numbers
Here is a list of phone numbers to the cancellation lines at some of the largest and best value car insurance providers in the UK. If you don't find your insurer listed below, try Googling your insurer's name and 'cancel car insurance' to find the contact number.
|Cancellation/Customer Service Phone Number
|Link to Cancellation Fees
|0333 220 2000
|Admiral cancellation fees
|0333 220 2000
|Ageas cancellation fees
|0330 024 1158
|Axa cancellation fees
|0333 220 2011
|Bell cancellation fees
|0345 603 3551
|Churchill cancellation fees
|0871 882 220
|Diamond cancellation fees
|0345 246 8706
|Direct Line cancellation fees
|0330 134 3259
|Elephant cancellation fees
|0345 045 1000
|esure cancellation fees
|01227 284 848
|Geoffrey cancellation fees
|0333 321 9801
|Hastings cancellation fees
|0800 633 5211
|LV= cancellation fees
|0844 800 3844
|People's Choice cancellation fees
|Quotemehappy cancellation fees
|0330 100 0593
|More Than cancellation fees
|0333 035 9368
|Swinton cancellation fees
|0345 246 2895
|Tesco cancellation fees
|General Accident cancellation fees
|0345 608 6034
|Sainsbury's cancellation fees