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Can car insurance be cancelled?

If you’re asking the question ‘can car insurance can be cancelled?’, it’s worth reading the following guide.

Cancelling your insurance

The cooling-off period

By law, a 14-day ‘cooling-off’ period applies to any new insurance policy taken out. Therefore, if you cancel within this time limit, and the policy has not yet started, you can expect to receive a full refund of any premium you’ve paid. The insurance company can apply an admin fee if they wish, however. They can also retain payment for any days of cover that have passed.

After 14 days

Once you’re 14 days or more into the policy, you become liable for cancellation charges as well as the above costs. You will have to pay for any days of cover you have had, and the insurer also has the right to add an admin fee. Therefore, if you cancel after the cooling-off period, your refund is likely to be smaller.

If you sell the car

It is important to cancel the insurance policy that covers a car you have sold. There are two main reasons for this. If you don’t have the car any more, there’s no point in paying to insure it. You could also encounter problems if the new owner has an accident before you’ve cancelled the policy.

If you replace the car

If you’re buying a new car to replace the old one, you can either cancel the policy and take out new cover, or you can ask the insurer to swap the insurance over to the new vehicle. This may be subject to an amendment fee, as well as any extra costs due if the car is deemed higher risk. It is worth comparing the price of amending your existing cover with quotes for a brand new policy, factoring in any amendment or cancellation fees, to see which will be cheaper.

Can car insurance be cancelled if I’ve made a claim?

You can cancel the insurance if you’ve made claim on the policy - but you will still have to pay for the entire year of cover. If you paid upfront, you will not get any refund. If you pay monthly, you’ll have to settle the balance due for the rest of the year’s cover at the time of cancellation.

Am I due a refund?

That depends. Insurers do not normally refund two months’ worth of premiums, because this sum covers their admin costs. If you want to retain your no claims bonus for the year, then it may be wise to continue with the cover.

Why might the insurer cancel my policy?

It does happen. Car insurance companies can and do cancel policies for a number of reasons.

Non-payment

If you haven’t kept up with your premiums, the insurer can cancel your policy. They would usually give one or more warnings before they did this. If you have trouble paying, it’s best to contact the insurer and discuss the situation with them, before you miss a payment if possible. You may be able to reach an agreement, thereby avoiding further problems.

Non-disclosure

When taking out any type of insurance, you must disclose any relevant facts to the insurer. If you fail to do this, they may have grounds to cancel your policy. Failing to disclose relevant information can also mean that the policy does not provide sufficient cover to suit your circumstances.

Fraud

Car insurance fraud often occurs because customers hope to benefit from lower premiums. One common example is a parent naming themselves as the main driver on their child’s car - especially if their child is a new driver and their insurance would be very costly. If this type of fraudulent activity is discovered, the insurer can cancel the policy immediately.

Other related FAQs

Looking for more related content to this? We’ve picked a selection of related topics that you may find helpful

Yes, if you wish to cancel your car insurance policy, you can expect to be charged a cancellation fee. How much you are charged will depend on your specific circumstances and the terms of your policy.

Each individual insurance provider will set terms and conditions about how and when their policies can be cancelled.

Whether or not you’ll get a refund after cancelling cover with your car insurance provider generally depends on how you’ve paid your premium. If you’ve paid upfront, then your refund amount could be fairly high – but if you pay monthly, any admin fee you’re charged is likely to counteract the part-month refund you’d otherwise get.