How do you cancel your car insurance?

Once signed, car insurance contracts are automatically renewed every year. However, there are several cases where you can request cancellation. What are they? What steps should you take? What if you took out an insurance policy online? Get all the answers with ViaMichelin.
How do you cancel your car insurance?
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For what reasons can you cancel a car insurance policy?

The law states that every owner of a motor vehicle is obliged to insure it. Typically, a car insurance policy lasts 12 months, but you can cancel it at any time, but your provider might charge you a cancellation fee and won’t automatically get your money back. Here are some reasons why you might cancel your car insurance:

  • The cooling-off period. By law in the UK, there is a 14-day ‘cooling-off’ period for any new insurance policy taken out. You can expect to receive a full refund if you cancel within this period. This applies whether you bought it in person or online.
  • After 14 days. Once you are 14 days or more into the policy, you will become liable for cancellation charges, as well as payment for any days of coverage that have passed.
  • If you sell your car. If you have sold a car, it is important to cancel the insurance policy that was covering it.
  • If you replace your car. If you buy a new car, you can either cancel the insurance policy or ask the provider to swap the insurance over to the new vehicle.

How do I cancel the insurance on my car?

Different providers will have different procedures for cancelling policies, and these will be detailed in the terms and conditions. You may have to inform your insurance company in writing, by letter or by email. If you do the job by phone, make sure you take note of the time and date and, if possible, who you spoke to.

Will I get a refund?

When you take out insurance, you are legally entitled to a ‘cooling-off’ period of at least 14 days. This starts when you receive the paperwork. If you change your mind and cancel your policy within this period, then you won’t have to pay any extra fees. If you cancel and then transfer your car insurance within the cooling-off period, you will be entitled to a refund minus the cost of any days that the policy was active. Ensure to check the terms and conditions, as you might have to pay an administration fee on top.

If you decide to cancel the policy after the end of the cooling-off period, you should be prepared to pay cancellation fees on top. You should also consider that any charges will be docked from your refund.

If your insurer decides to cancel the policy for a specific reason, then it is unlikely that you will get a refund.

What if I pay monthly?

If you pay monthly for your car insurance and want to cancel, don’t just stop the direct debit payments. You will need to contact the insurance provider since this just stops the money from leaving the bank, but it does not cancel the policy. You might also face some cancellation fees.

Why might an insurer cancel a policy?

There are a number of reasons why this might happen:

  • Non-payment. If you do not keep up your premiums, the insurer can cancel the policy. They will usually warn you about this. If you are having trouble making payments, contact the provider to discuss the situation.
  • Non-disclosure. If you did not mention relevant facts when taking out the policy, the insurer might have the grounds to cancel. The policy may not provide sufficient cover to suit your circumstances.
  • Fraud. Activity such as ‘fronting’, when a parent names themselves as the main driver on their child’s car, particularly if their child is a new driver and car insurance would be very expensive, is considered to be fraudulent activity and grounds for immediate cancellation of the policy.

If you’re not happy with the way you are treated by your car insurance company, you have the right to complain. The Consumer Rights Act applies to consumer insurance contracts taken out for personal use, including car insurance bought online.