You can cancel your car insurance at any time. If you do this at renewal time, there should be no charge. If you do this outside of your 'renewal window' you likely have to pay a cancellation fee.
If you still have a car, make sure you have another policy ready to take over your cover. Otherwise, you need to take your car off the road.
Here's what you need to know.
Cancelling car insurance: Step by step
Cancelling your car insurance is usually a quick task. It's perfectly legal to cancel your insurance too - it's a private contract between you and your insurer. In some cases you can do it online, but some insurance companies might want to speak to you first. If that’s the case:
Get your policy documents ready and find your car insurance policy number.
Call your insurance company. It needs to be the policyholder who does this, but you can then authorise someone else to deal with the policy on your behalf.
Tell your insurer you want to cancel your car insurance. They may ask why you want to do cancel, in case they can help.
If you're cancelling because your car insurance is too expensive, they might offer you a discount to stay.
They should explain any fees and might ask you to send your certificate of motor insurance back to them.
If you’re giving your car a statutory off-road notification (SORN), make sure you fill in the SORN form with the DVLA.
Although you can sometimes get a refund of your costs if you cancel your car insurance, any extras, like breakdown or legal expenses cover, usually aren't refundable. But it's worth contacting your provider to see what their terms are.
It's important to make sure you have some kind of cover in place after you cancel your car insurance policy. Unless you're taking your car off the road, you should always have a valid policy in place. Otherwise, you're driving without insurance, which could see you get a fine and points on your licence.
Can I cancel my car insurance if I’ve made a claim?
Yes, you can cancel your car insurance if you’ve made a car insurance claim, but you may not be entitled to a refund. This is because you've already had a payout from the insurer.
If you've made a claim and you pay monthly, you may also have to pay for the remainder of the policy after cancelling.
Do I lose my no-claims discount if I cancel my insurance?
Yes. If you've not had a full year with your policy you lose your no-claims bonus for that year.
If you take a break from your insurance, most insurers allow up to 2 years before you lose all of your no-claims bonus.
But this varies depending on the insurer, so check the policy details.
Car insurance cancellation fees
Depending on when you cancel your car insurance, you might have to pay a cancellation fee:
- If you cancel at renewal: You shouldn't have to pay any fees. This is called 'lapsing' the policy.
- If you cancel within 14 days of starting a policy: You may have to pay an admin fee.
- If you cancel at any other time: You're likely to pay a cancellation fee. This is known as a 'mid-term cancellation'.
If you bought your policy via a car insurance broker, they might also charge you a cancellation fee.
Can I dispute the car insurance cancellation fee?
Yes, you can dispute your car insurance cancellation fees. If the fees are reasonable and outlined in your policy documents you're unlikely to have any luck.
But if the fees are excessive or disproportional when compared to other providers, you might have more success.
First, make a complaint to your car insurance company, making sure you 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 usually get a refund for the policy you’re cancelling, so long as you've not made a claim. This should be on a 'pro rata' basis - so if there are 6 months left on the policy, you can expect around half of your costs back.
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?
The cooling off period for car insurance is 14 days. Regardless of which company you choose, by law you have 14 days to change your mind and cancel.
There may be a small admin fee for this, and you have to pay for the days you've been insured. If you paid for the policy in a lump sum, you should get the rest of your money back, so long as you've not made a claim.
If you’ve been paying monthly, you should get a part-month refund and the direct debit should be cancelled.
"It's a common misconception that cancelling within the 14-day 'cooling off' period means you don't have to pay any fees. While you should get some kind of refund from your insurer, you still have to pay for the days you've had cover for. And insurers can charge an admin fee for cancelling within this window. Check your policy documents - they should tell you exactly when they charge a fee for cancellations." Louise ThomasMotor insurance expertWhat our motor insurance expert says
Do I get a refund if I cancel after the cooling-off period?
Yes - if you decide you want to cancel your car insurance after the 14 day cooling-off period, you can still get a refund, as long as you've not made a claim.
Your refund amount depends on when in your contract you've decided to cancel. Your insurer is also likely to charge you a cancellation fee.
Your overall charges for an early exit vary between insurers, so check your policy terms and conditions to know how much you have to pay.
Cancelling your insurance if you're buying or selling your car
Do I need to cancel my car insurance if I buy a new car?
No - if you’re buying a new car, you don’t necessarily need to cancel your policy.
You should be able to change your car insurance policy to your new car. If the insurer allows it, you can log into your account and make the change.
Your car insurance costs could go up or down for the remaining term of the policy, depending on the new car.
When should I cancel my car insurance after selling my car?
If you've sold your car, call your insurer and tell them you no longer own the car and you want to cancel your policy. They should send you a copy of your no-claims bonus, which stays valid for 2 years.
Make sure you keep your proof of no-claims bonus somewhere safe. The next company you buy car insurance with is likely to want to see a copy of it.
Should I cancel my car insurance if I give my car a SORN?
You don't have to cancel your policy. If you’re keeping your car, but won’t be driving it for the foreseeable future, you can give it a SORN from the DVLA. You then need to decide whether to cancel your current insurance policy.
Why would you want to keep it? Well, your policy could still cover you if your car is stolen, or catches fire. And if you choose to keep the policy, you're also be earning your no-claims bonus.
To SORN your car, you need to fill in the form that's on GOV.UK.
What do I do if my insurer cancels my 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 policy expires.
Your insurance could also be cancelled because of something you’ve done. For example:
- Failing to declare penalty points on your licence
- Not telling your insurer about modifications to your car
- Failing to report an accident
When you buy 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. You can also expect the cost of your insurance to rise.
When you compare car insurance quotes with us, we'll ask you "Have any of the drivers ever had insurance declined, cancelled or special terms imposed?". This is the last question before you see your list of quotes. Make sure to select 'yes' if a previous insurer has cancelled your policy.
