How to cancel an insurance policy

Whether you’ve declared your car as SORN, sold your car, or have simply renewed your car insurance early elsewhere, you’ll need to know how to cancel your car insurance policy.

Find out how to go about it, and get the low down on refunds and cancellation fees, with our guide. 

How to cancel your car insurance

It’s usually quick and easy to cancel your car insurance. In some cases you can do it online, however lots of insurance companies might want to speak to you first. If that’s the case:

• Get your policy documents to hand so you have your policy number

• Call your insurance company (it needs to be the policyholder who does this)

• Tell them you're cancelling your car insurance (they may ask why – that’s fine)

• They should explain any fees and might ask you to send your certificate of motor insurance back to them

• If you’re declaring your car as SORN, make sure you fill in the SORN form with the DVLA

Can I cancel my car insurance?

Yes. A car insurance policy is a private arrangement between you and your insurer, and you can take away your business at any time.

If you do this at renewal time, there should be no charge. You simply need to make sure a new provider is covering you from the moment your current policy ends if you still have a car.

But there are some important things to bear in mind. The most important thing is to make sure you never drive without insurance. So, if you want to cancel a policy but continue to drive you have to find a new provider.

Other things to take into consideration include cancellation fees and the impact on your no-claims bonus if you cancel a policy mid-term. You likely haven’t earned anything that year towards your no-claims bonus as you won’t have completed a full year under the policy.

When to cancel my car insurance after selling my car

One of the most common reasons for cancelling car insurance is because you've sold your car. 

Call your insurer, tell them you no longer own the car and you want to cancel your policy. They should send you a copy (whether paper or via email) of your no claims bonus, which stays valid for 2 years.

Make sure you keep your no-claims bonus proof somewhere safe. The next company you take out insurance with is likely to want to see a copy of it.

Do I need to cancel my car insurance if I buy a new car?

If you’re selling your car and buying a new one, you don’t necessarily need to cancel your policy.

You should be able to call your car insurance provider or, if they’re online only, log in and change your car details to your new one.

Your car insurance costs could go up or down for the remaining term of the policy, depending on the new car.

If you feel you’re being charged too much under the amended policy, you can shop around for a better deal in the normal way. But don’t forget to take into account the impact of any cancellation fees with your existing insurer.

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

You can cancel your car insurance if you’ve made a claim, but the catch is that you may not be entitled to a refund. This is because you had the financial benefit of the insurance, which could well be greater than the cost of your cover.

Drivers that pay monthly may also have to pay for the remainder of the policy if they cancel their policy.

Can I cancel car insurance extras?

Although you can get a refund of your costs if you cancel your car insurance, any extras, like breakdown or legal expenses cover, are not usually refundable.

Car insurance cancellation fees

If you change your mind, you can cancel your car insurance free of charge within the first 14 days. 

However, if your policy has been active for longer than that, you’re likely to have to pay a cancellation fee to cover administration costs.

If you bought your policy via a car insurance broker, they might also charge you a cancellation fee on top.

Can I dispute the car insurance cancellation fee?

You can dispute your car insurance cancellation fees if you wish. But if they’re reasonable and outlined in your policy documents it’s unlikely you’ll have any luck.

If, on the other hand, they’re excessive or disproportional when compared to other providers you might have more success. Complain first to your insurance company, making sure to keep a record of all your communications. If you don’t get a satisfactory response you can then take your complaint to the Financial Ombudsman Service.

Will I get a refund if I cancel my car insurance?

Yes, you should get a refund for the insurance you’re cancelling. This should be on a pro rata basis. So if there are 6 months left on the policy you can expect half of your costs to be returned.

Unless you’re cancelling within the 14 day cooling-off period, an admin fee is also likely to be deducted from your refund.

If you pay by monthly direct debit, once the admin fee has been sorted you stop paying any further.

Always check with your bank or building society to ensure the direct debit has been cancelled. 

What’s the cooling off period for car insurance?

When you take out a new car insurance policy, as with any insurance, you have a cooling off period. Regardless of which company you choose, by law you have 14 days to change your mind and cancel.

You shouldn’t have to pay a cancellation fee, although some companies may try to charge you. You do, however, have to pay for the days you've been insured.

If you paid for the policy in one lump sum, you should get the rest of your money back. Your insurer might deduct the cost of the days you were insured.

If you’ve been paying monthly, you should get a part-month refund and the direct debit will be cancelled.

I can’t get through to my insurer so how do I stop my car insurance renewal?

If you can’t get through to your insurer, you can send an email instructing them not to renew your policy.

This should be enough to cancel the policy before the renewal date. Bear in mind that only the policyholder can cancel the policy. 

You can find your insurer's email address on their website. In your email, it’s worth including:

• Your policy number and renewal date

• Your name, date of birth and postcode

• Your car’s registration number

It might also help if you add in a reason for cancellation, and mention that you weren't able to get through over the phone.

Unless you no longer have a car to insure, make sure you have valid insurance in place elsewhere to cover you from the renewal date.

Cancelling my car insurance because my car is SORN

If you’re keeping your car, but won’t be driving it for the foreseeable future, you can register it as SORN with the DVLA. You then need to decide whether to cancel your current insurance policy with immediate effect, or keep it.

Why would you want to keep it? Well, you might want to keep your car insurance in case your car is stolen, or catches fire. And if you choose to keep the policy, you’ll also be earning your no-claims bonus.

To SORN your car, you need to fill out the form that can be found on the government’s website.

How to get car insurance after cancelling

You can apply for a new policy in the same way you did last time. You’re free to ask for a quote from any insurer, and you start again from scratch.

It’s always best to shop around for the best deal on your car insurance, although make sure you also know what it is you’re paying for. Cutting the cost of insurance is great, but not if you’re left with an unsuitable policy.

But if you’re continuing to drive your car in the meantime, you should take out a new policy that kicks in the moment your previous policy is cancelled. It’s a serious offence to drive without insurance, and there won’t be a grace period for being between insurance providers.

Changing the date your car insurance renews

If you have multiple cars in your household, you might want to change the month your car insurance renews so they renew at the same time of year. 

To break the cycle of renewing at a certain time, you can buy a new car insurance policy at the date you prefer, and then cancel your old one.

However, if you decide to do this, you lose the current year of NCB that you’re earning.

And depending on your insurer, they might charge an admin fee for cancelling the initial policy early. 

What to do if your insurer cancels your car insurance

If your insurer decides it doesn’t want to insure people with your risk profile, they should give you good notice. You should have time to find a new policy before your current one expires.

What if your insurance is cancelled because of something you’ve done wrong? For example:

When you take out a new policy elsewhere, you have to declare that you’ve had a policy cancelled. They might decide that they don’t want to insure you. At the very least, you can expect the cost of your insurance to go up.

Whatever happens, never drive your car until you have a new car insurance policy in place, and make sure it’s off the road in the meantime.

It’s also worth making sure you don’t fall behind if you pay your premiums if you pay monthly. This could also result in your policy being cancelled.