Insurance gives you extra protection if things go wrong. However, you may decide that you no longer want or need your insurance policy. This page explains what you can do if you’ve taken out an insurance policy and decide you want to cancel it.
Cancelling during the cooling-off period
You may want to cancel an insurance policy if you have just bought it and have changed your mind. By law, you have a minimum 14-day cooling-off period during which you can cancel the policy for any reason. If you’ve bought life insurance, the cooling-off period is 30 days.
The cooling-off period starts from when the policy begins or when you receive your policy documents, whichever is later. You should get a refund of any premiums you have already paid. However, your insurer may take off a small amount to cover days when the policy was in force. They may also charge you a small administration fee.
Some insurers may give you a longer cooling-off period. If you’re not sure how long your cooling-off period is, you can check the terms of your insurance policy.
If you want to cancel your policy during the cooling-off period you should contact your insurer as soon as possible
The right to cancel during a cooling-off period does not apply to travel insurance that lasts less than one month.
Cancelling after the cooling-off period
If you want to cancel your policy after the cooling-off period you should check your insurance policy. Most insurers will give you a refund if you have not made any claims during the policy year but you will usually have to pay administration fees.
If you are thinking of cancelling your policy because you’ve found a better deal with another insurer it may be easier and cheaper to wait until your policy is due for renewal and then switch.
Cancelling a direct debit does not cancel your insurance policy. If you do this you will still owe your insurer the premiums. You must contact your insurer to cancel the policy.
Some policies are automatically renewed each year. It’s important to check when your policy is due for renewal so you can make sure that it is not renewed when you don't want it to be.
It’s a good idea to make sure you have a new policy in place before cancelling the old one so that you’re not left uninsured.
Can your insurer cancel your policy?
Occasionally your insurer may wish to cancel your policy. They are only likely to do this if they believe:
something has happened to make it much more likely you will make a claim, or
you have not kept to the terms of the policy.
In most cases your insurer will wait until the policy needs to be renewed then refuse to renew the policy.
Next steps
Check that you are within the cooling-off period.
If your cooling-off period has ended, work out whether it will be better to wait until your policy needs to be renewed, rather than cancel straight away
FAQs
Canceling your term policy couldn't be easier: just stop paying your premium and write a letter or call your insurer to let them know you are canceling the policy. Check the website of your insurer, too — there may be a form there you can fill out to terminate your policy.
What is a valid reason to cancel an insurance policy? ›
Reasons to consider canceling your insurance policy:
You believe you're paying too much for insurance. Your business has changed, and you need different coverage. You're moving out of state, and your current insurer doesn't offer policies in your new location. You're unhappy with the service your insurer provides.
What do you say when Cancelling insurance? ›
Dear Cancellation Department, I am sending you this written notice to request cancellation of my insurance policy effective (date you plan to cancel). I would appreciate you sending me written confirmation within 30 days that the cancellation has been put into effect.
How do you write a cancellation policy for insurance? ›
The reason for cancellation is {reason you want to cancel your policy}. The effective date of policy cancellation is {cancellation date}. Please stop automatic payments and refund the unused portion of my premium directly to me the address stated above. I also request written confirmation of the cancellation.
What happens if you cancel an insurance policy? ›
Some insurance companies permit you to cancel right over the phone or online. Other insurers may require written notification or a signed document. Generally, insurers will refund you the money for the unused portion of your policy, assuming you paid in advance.
Do you need a reason to cancel insurance? ›
Policyholders may cancel their car insurance policies at any time and for any reason, from selling their car to needing more affordable coverage. However, depending on your provider and transportation needs, you may need to prepare for penalties or get a new policy to avoid an insurance lapse.
How to write a cancellation letter to an insurance company? ›
Dear [Insurance Company's Name or Insurance Agent's Name], I am writing this Letter to formally request the cancellation of my auto insurance policy, with the policy number [Your Policy Number], effective [Date you wish the cancellation to take effect]. The terms and conditions make this request of my policy.
What is an example of a short rate cancellation? ›
For example, if you paid $1000 for a 12-month policy and cancel after three months, you will get back $750 or nine months' worth of premiums. On the other hand, if you cancel this policy after three months, and the company uses a short rate, you would not receive the full $750 of the remaining premium.
How do you write a formal cancellation letter? ›
How to write a cancellation letter for an event
- Choose a letter format. The first step is to choose a letter format. ...
- Make the cancellation clear. ...
- Share why the event was cancelled. ...
- Apologise for the cancellation. ...
- Include information about event refunds. ...
- Share words of appreciation.
The word cancellation is solidly spelled with two l's, no matter where you are.
The easiest way to cancel your car insurance is to call your insurance company or agent. In many cases, a phone call is enough to cancel your policy or stop insurance renewal. However, some insurance companies may require you to pay a cancellation fee and sign an insurance cancellation form or letter.
Is it easy to cancel insurance? ›
Depending on your insurance company's rules, there are a variety of ways to cancel your policy. Call your provider. Most major companies simply ask that policyholders speak with an insurance agent to cancel. The phone number likely will be found on your insurance card, as well as on the company's website or app.
Is it bad to cancel insurance early? ›
If you cancel your insurance policy before your policy expiry / renewal date, your insurance company will typically charge a percentage of your total insurance premium for the year that is higher than the per day amount would be. This is called a short rate cancellation penalty.
Can I cancel my insurance policy at any time? ›
You can cancel a policy at any time. Make sure to have your new car insurance in place before canceling. You don't want any gap in coverage—even if it's a day. You may also decide to cancel a policy at the end of your term, so you don't face a cancellation fee if your policy has one.
Can I cancel my insurance policy and get my money back? ›
Receiving an insurance refund will largely depend on why you're canceling the policy and how much of the premium you paid in advance. If you pay your full premium upfront, then you'll typically get a refund when you cancel your policy.
