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 policy before your renewal date may trigger early cancellation fees. Depending on your provider and other factors, you may be charged either a flat or short-rate fee.
Can you cancel an insurance policy at any time? ›
Policyholders can cancel their auto insurance policy at any time, for any reason. And you never have to wait until the end of your policy period to cancel your policy. Even if your policy only started a few days ago, you may cancel it.
Can I cancel my insurance policy without penalty? ›
Generally speaking, the farther off your policy end date, the higher the penalty will be. Keep in mind that you can avoid the penalty by notifying your insurance representative in advance that you'd like to cancel your insurance on your policy renewal date or if you notify them before your policy comes into effect.
Does canceling insurance affect anything? ›
Even if you aren't driving, you may risk fines or a license suspension if you own a registered vehicle but don't have insurance. Canceling your insurance will also lead to a lapse in car insurance coverage, which may mean higher rates in the future.
How much does it cost to cancel car insurance? ›
Car insurance cancellation fees
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.
Who has the right to cancel an insurance policy? ›
The Bottom Line
An insurance company has the right to cancel your policy if you do not fulfill your obligations under the policy agreement.
What happens if I cancel my insurance policy early? ›
If you paid your premium in advance and cancel your policy before the end of the term, the insurance company might refund the remaining balance. Most auto insurers will prorate your refund based on the number of days your current policy was in effect.
How long do you have to cancel a policy? ›
Check the cooling off period – the standard cooling off period is 14 days, but some insurers may give you longer. Find your policy documents – when you contact your insurer about cancelling, they may ask for your policy number and renewal date. You'll find these in your policy documents.
Do I get a refund if I cancel my car insurance? ›
Typically, insurers won't refund the final two months of a policy, so for example if you cancel with five months left, you'll only receive three months of premium payments back. Check what your terms are though, as each insurer is different.
What is a good reason to cancel insurance? ›
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.
In short, yes, you can cancel a car insurance policy at any time, even if you've paid upfront for 12 months. However, there are a few things to consider. If you'll no longer be driving the car because you've sold it, then cancelling your car insurance makes perfect sense.
What are the three types of cancellation? ›
Here are the different main types of cancellations are short rate cancellations or pro-rata cancellations, flat cancellations. In comparison to short rate cancellations or pro-rata cancellations, flat cancellation is different, being classified as the simplest and easiest way to terminate an insurance policy.
What is the difference between cancellation and surrender of insurance policy? ›
Essentially, surrendering a life insurance policy means that you're canceling it. You will no longer owe premiums and if you pass away, your beneficiary will not receive a death benefit payment. Discussions about surrendering a life insurance policy typically only refer to permanent life insurance policies.
