While car insurance is a must-have for all vehicles which are on public roads, you can cancel your policy at any time if you decide you no longer need the car or want to store it off-road for a period of time while you’re not using it.
How early you cancel your insurance can affect how much (if anything) you’re charged by your insurer to do so. There are certain procedures you have to follow depending on whether you’re leasing your car or own it outright.
Read on to find out everything you need to know about cancelling car insurance in this guide.
How much does it cost to cancel car insurance?
If you decide that you want to cancel your car insurance policy then it’s important to be aware of the potential costs involved. This is especially true if you went through a broker to get cover for your vehicle, as you may be subject to a cancellation fee from the insurer providing it and the broker you bought it from.
Cancellation fee
How much you’re charged will be proportional with the time you’ve been insured, and if you cancel your policy during the 14-day cooling-off period* then most insurers won’t charge anything.
Depending on where you go to receive your cover and which insurer you choose could mean that you still have to pay an admin fee from the provider or broker for processing it. However, this won’t be as expensive as the cancellation fee if you decide to pull the plug after the cooling-off period.
Remember: Each provider will have its own rules on cancellation fees, so be sure to check what it says on this before agreeing to a contract.
*By law, insurers have to offer a minimum of 14 days cooling-off period – starting the moment you receive your documents – whereby you can cancel your policy.
Other fees
Some insurance providers can charge you a fee for arranging your policy, which is later taken away as a percentage of your remaining cover.
If you think you may have been overcharged by your provider, you should contact them and make a complaint. The complaints procedure of the company will be available on their website and you should get a response within eight weeks of submitting your complaint. However, you can take matters further by raising the issue with the Financial Ombudsman Service if a refund is refused or you don’t receive a response.
I pay monthly. Can I still cancel my insurance?
Yes, but you might not be able to get a refund and you may even have to pay extra in order to cover the amount of time your policy has covered you. This will be on top of any cancellation and admin fees your insurer has in place.
Remember: Any add-ons such as windscreen and breakdown cover won’t be eligible for a refund and you may have to contact the add-on provider separately in order to cancel these.
I’ve made a claim on my insurance. Can I still cancel?
You can still cancel your insurance policy if you’ve claimed on it. However, if you paid for the cover upfront, it’s unlikely that you’ll be able to get a refund. On the other hand if you pay monthly, you’ll have to pay for the remaining time left on your policy, which you may be able to do in one lump sum.
If you cancel your insurance mid-policy then you probably won’t be able to earn your no claims discount for that year, as this tends to only apply after you’ve done a full year of driving.
Do you lose your no claims discount if you cancel your insurance?
Unfortunately, a no claims discount (or no claims ‘bonus’/NCB) can only apply if you see out your current insurance policy. So, if you cancel your insurance early, you won’t get to carry your no claims discount over into your next policy.
Another thing to remember is that every NCB has an expiry date of two years, starting from the end date of your last insurance plan. This means that if you leave it more than two years before you next get insured on a car, you’ll have to start from scratch again and build up your no claims discount again.
Most insurers will provide you with proof of your NCB once you’ve cancelled or decided not to renew your policy, which is a good reference for when you decide to get insured again. It means that you can easily tell another insurer (if you’ve decided to switch) exactly how many years worth of no claims you have in order to get an accurate quote for your premiums.
Remember: You can carry a no claims discount over from one car to a new car if you change vehicles within two years and need to take out insurance again.
Can I cancel my lease car insurance?
Because the finance company is the registered owner and keeper of all personal and business lease cars, you’ll need to get permission from them before cancelling your insurance policy.
A decision to cancel insurance for a lease car will also be subject to the insurer’s approval, especially as they will be aware that the policy is under the name of the finance provider and that you don’t own it.
There’s no guarantee that you’ll be able to cancel lease car insurance as without it they could risk having to pay for any damage or loss of the vehicle. Also, if you’re not paying for a ‘Total Care’ package whereby insurance is included in the cost of the monthly payments for the car, then you’ll be contractually obliged to insure it for the entire duration of your agreement. As such, you can be fined and taken to court for reneging on the original contract.
Remember: Requests to cancel lease car insurance are dealt with on a case-by-case basis and therefore it’s best to speak to the leasing provider about it first.
Total care leasing
Unlike standard contract hire and leasing agreements, Total Care deals include insurance cover within the monthly payments for the vehicle. For this reason, cancelling your insurance would in effect void the finance agreement.
It’s highly unlikely that you’ll be able to arrange for insurance cancellation on your lease car if it’s a Total Care package. These agreements include many aspects, such as maintenance, servicing and fully comprehensive insurance with breakdown cover which is already funded and arranged with a chosen insurer through the finance provider. Therefore, asking to cancel one aspect tends to be impossible.
How to cancel your insurance policy
The first thing you need to do when you decide that you want to cancel your car insurance is to get in contact with your provider and make them aware of your decision. From there, most insurers will have their own procedures that you will need to follow in order to successfully cancel your cover.
Depending on the reason you have for cancelling your insurance, you may need to take some actions before being able to do so. There’s also certain documents you’ll need in order to go ahead with a cancellation, whether it’s over the phone or online.
Declaring your car as SORN
If you decide to keep your car but won’t be driving it anytime soon then you’ll need to register it as SORN (Statutory Off Road Notification) with the DVLA. This means that you will be taking the vehicle off public roads and not using it, therefore it will need to be stored in a garage or be on private land such as a driveway.
When you do this, you’ll be required to fill out a SORN form for the DVLA.
Remember: You can still keep your insurance policy if you decide to SORN your vehicle, meaning you’ll still get your no claims bonus and be covered for fire and theft if it’s stolen or catches fire.
Not wanting to renew
A lot of the time you can avoid early cancellation fees from insurance providers if you don’t wish to renew your policy and you’re coming towards your renewal date.
Whether you’re planning on switching to a different insurer, are planning on selling the car or declaring it as SORN, interrupting the renewal process is not the same as cancelling your policy. As such, you should contest any charges a provider tries to hit you with for deciding not to take out another year of cover with them. However, it’s very unlikely that this will happen.
Remember: Insurers usually don’t offer a refund for the final two months of your policy if you decide to cancel during this time, so if you leave your decision to cancel insurance a little last minute then you will save money by deciding not to renew before your renewal date.
Selling your car
You should cancel your insurance policy straight away if you’re selling your car and not getting a new model.
Not doing so won’t just cost you unnecessary amounts of money because you’re not using the car, but you could also face the headache of a claim against your insurance if the new driver of the vehicle is involved in an accident.
If you are replacing your old car, most insurers will allow you to change your policy to switch over to cover for your new motor. It’s likely that there’ll be a charge for changing over and your premium may be higher if your next model is deemed as a higher risk by the insurer, but be sure to do some calculations on the different options before deciding to cancel and take out a new policy with a separate provider.
What you need when cancelling your insurance
Whether your insurer requires you to cancel your car insurance online or over the phone, the process is generally a simple one across the board.
Should you need to speak to a member of staff from your insurance provider when cancelling your policy, here is some information you may need to have on hand.
- Your policy number and accompanying documents.
- You may need to tell the provider your reason for cancelling (if they ask why you wish to do so).
- After the insurer has explained what fees are in place, you’ll need to send them your certificate of motor insurance back to them.
- If you’re declaring the car as SORN, you’ll need to have the document for this to hand.
- If you’re leasing your car, you’ll need permission from your finance provider to say that you can cancel your insurance before going ahead with it. To do this, contact the company who leased you the car, who will then pass on your request.
