Cancelling your car insurance policy can be tricky and you are probably not informed enough to take a decision.Whatever the reason you want or need to cancel your car insurance policy, there are few things you should be aware of first.
Is there a cooling-off period?
Yes. Whatever your reason is, UK insurance rules give you a 14-day period of withdrawal (10 days in countries like France) when you buy a car insurance.
This period begins from the start date of your policy, or from the date you receive your policy documents.
If you cancel your policy within this time, you should be eligible to a refund. You may still have to pay an administration fee, and you could be charged for the number of days you were covered for.
Cancelling a policy mid-cover
Once this period of withdrawal has passed, the cost of cancelling your policy may significantly increase. If you want to put an end to your policy after these 14 days, you’ll likely be charged a cancellation fee.
If you cancel your policy halfway through, it doesn't necessarily mean you will get half of your premium back.
Consequences of cancelling a policy early
There are lots of consequences regarding the cancellation of an insurance car policy early, that's why you should check all related terms and conditions beforehand.
For example, you could miss out your no-claims bonus (If you don't claim on your motor insurance policy, you will start to build up a no claims bonus/discount for every year that you have had insurance on a car without making a claim).
Also, if you have breach of contract, it will also come to an end and you may not get a refund.
I want to cancel my car insurance before it automatically renews, what should I do?
Most car insurance policies renew themselves at the end of the 12-month cover period.
This is done to make sure drivers who forgot their renewal dates are not on the road without any insurance and driving illegally.
You won’t have any fees for this, provided you cancel before the new policy comes into effect.
Just make sure to contact your insurer a few weeks before the end of your contract.
Did you buy a new car ?
When you buy a new car, most of the insurers will allow you to update your policy to cover the new vehicle.
There are often charges for doing so.
Keep in mind that your premium for the remaining months of the policy may change depending on your new car's 'risk rating'.
If your insurer does raise your premium by a large amount to cover your new car, it could be worth comparing quotes from other insurers before accepting the new deal.
How to cancel your car insurance
Insurance companies have different procedures for cancellations, so the best is to directly contact your agency or check your policy for instructions.
Sometimes, your future insurer can even take care of your file and do the transition for you and deal with your previous insurer.
What to do if I disagree with cancellation charges?
Keep in mind that the cancelling cost can significantly vary depending on when you put an end to your car insurance, but it's not a fair reason for the insurer to charge you too much.
If you think you have been unfairly charged, or if you have to cancel because of what you think is a mistake on the insurer’s part, you can complain to the company directly.
Ask for an address for customer services, and write giving clear details of your case, such as what happened, when, and why you think you have been charged too much.
Even if fees are laid out in the policy booklet, you may be able to challenge them.
Keep a record of anyone you speak to, and of the letters you send. If you send a registered letter, you’ll have proof they’ve been received.
If the company doesn't deal with your complaint to your satisfaction, you can take your case to an insurance mediator (if you feel that something is not fair or legal).