It is possible to cancel your car insurance early. You don’t have to wait until the end of your policy.
But to do this, you’ll usually have to pay a fee.
The cancellation fee goes down the closer you are to the end of your policy.
Different insurers charge different cancellation fees. There’s no fixed amount. But you can expect to pay at least £25. You also won’t be eligible for any no claims bonuses you’ve accrued, and your breakdown cover usually won’t be refunded.
The type of policy you have will also affect the amount you have to pay to cancel your car insurance early. Black box insurance policies, for example, will be more expensive.
Cancelling your car insurance during the cooling-off period
Insurers have to offer a 14-day “cooling-off” period when you take out a policy. If you cancel your car insurance during the cooling-off period, there’s no cancellation fee. But you may be charged a small admin fee. These vary among different insurers. Admiral, for example, charges £25.
The admin fee might not be completely clear when you sign up. Make sure you take it into account when comparing car insurance products.
How cancellation fees are paid
If you pay your annual premium in one go, you’ll actually receive money when you cancel your insurance policy. This is a refund of all the money you paid up-front for your annual policy.
However, the amount you get back will be less than the amount you paid. This is because your insurer has subtracted the cancellation fee.
The amount refunded will be lower the closer you are to the end of your policy.
Cancelling monthly car insurance
You can cancel monthly car insurance early, but you will usually have to pay. The total cancellation cost is usually higher with monthly car insurance than it is if you pay for your insurance up-front.
Along with the standard cancellation fee, you might be charged a percentage of the total policy cost.
If you do cancel monthly car insurance, you need to contact your insurer and let them know you want to cancel. You can’t just cancel your direct debit.
How to cancel your car insurance
The process for cancelling your car insurance is in the terms and conditions of your policy. It varies depending on your insurer.
Some insurers will require your cancellation to be submitted in writing. Others let you cancel your policy over the phone.
|Brand||Charge if you cancel within the 14-day cooling-off period||Charge if you cancel after the 14-day cooling-off period|
|Admiral||The amount of time you’ve been covered, plus £25.||£49.50|
|Geoffrey||The amount of time you’ve been covered, plus £25.||£45, or £30 if you’ve only got two months left on your policy.|
|Direct Line||Your premium will be returned, minus a charge for the number of days you’ve been covered. You’ll also get refunded for breakdown cover.||Your premium will be returned, minus a charge for the number of days you’ve been covered and an admin fee of £48.16, and £11.20 for breakdown cover.|
|Hastings Direct||No charge.||£45.|
|Tesco Bank||No charge.||£40.|
Cancelling your policy if you’ve made a claim
If you cancel your car insurance policy after making a claim, you usually won’t get a refund, even if you’ve paid the full amount up-front. But you still can (and should) cancel your insurance policy if you know you won’t need it anymore.
If you pay monthly, you’ll have to pay up to the end of the month in one lump sum. The admin fees are also likely to be higher than if you pay up-front.
Cancelling a black box insurance policy
Black box insurance policies are usually more expensive to cancel.
For example, Admiral charges £129.50 for the removal of their LittleBox/ Safe Driver options.
On top of this, there will usually be a fee for removing the black box from your old car. But some insurers, like Insurethebox, do this for free.
Cancelling after selling your car
When you sell your car, you should let your insurer know straight away.
If you’re buying a new car, you can switch your policy. There’s a fee for doing this, but it’s usually still cheaper than cancelling your policy and starting again.
If you’re not buying a new car, you still need to let your insurer know, and you’ll have to cancel your policy as usual.
If your insurer cancels or voids your policy
If your insurance policy has been voided or cancelled, it can be more difficult to get car insurance in the future. Before you take out a policy, you’ll be asked if you’ve ever had a car insurance policy voided or cancelled, and most comparison sites will ask you the same question.
There are specialist insurers who insure people who have had their policies cancelled in the past, such as Acorn.
If you've ever cancelled your car insurance early, how was the experience? Were the fees clear? Was the process straightforward? Leave a review and let us know.