Can I cancel my car insurance?

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cancelling car insuranceThere are many reasons for you wanting to cancel your car insurance policy.

You may have sold your car and no longer need car insurance.

Your car could have been stolen or written off the road in an accident.

Whatever the reason, the answer is always yes – cancelling car insurance is always an option open to you.

Before you take such a big decision though, it’s best to make sure you know as much about it as possible – so we’ve put together this useful guide on cancelling your car insurance…

Does it cost to cancel my car insurance?

When you take out a car insurance policy an insurance company has to give you, by law, a ‘cooling off period’. This time period allows you to cancel your policy without incurring a penalty.

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The standard cooling off period is 14 days, however some companies will offer a longer period of time. It is always worth checking your policy details so you are aware of how long is available to you.

If you do decide to cancel your policy during the cooling off period, you should not be charged for doing so. However, some insurers will charge a small cancellation fee to cover the cost of administration.

If you decide to cancel your car insurance after the cooling off period further along the line you will more than likely have to pay a cancellation fee which is much higher.

Cancellation fee prices vary from insurer to insurer, with some being as high as £75.

Can I get a refund?

Some people choose to spread the cost of their car insurance premium by paying monthly by direct debit.

For those who don’t do this and pay their premium annually, a refund may be available.

For example, if you decide to cancel your policy in the third month you should be entitled to be refunded for the remaining nine months minus the cancellation fee.

However, insurance companies don’t usually refund the last two months on a policy so bear this in mind and make sure you check before deciding to cancel your policy.

Are there any consequences to cancelling my car insurance?

Other than having to pay a cancellation fee, the only other consequences for cancelling your car insurance is that you will miss out on the no claims bonus for that period.

If you have additional cover on your policy, for example breakdown cover, you may not be entitled to a refund.

How do I cancel my car insurance?

To cancel your car insurance, you need to contact your insurance company. They will ask you to sign and send back a declaration form and policy schedule – once the company has received this, the cancellation will take effect.

You will receive a letter or email confirming the cancellation of your policy which you should always keep for your own records.

Tips on cancelling car insurance

  • If you are thinking about cancelling your car insurance, you should work out if it is better for you financially to wait until the policy ends. For example, if you have two or three months left, it would be worthwhile to wait until the end as you would be out of pocket from paying the cancellation fee and not being refunded for the final two months.
  • Check your policy details as some insurance companies will automatically renew your insurance every year. If your policy does this and you wish to cancel, as long as you contact your insurer before renewal, you will not face any fees as this is not classed as cancellation.
  • You have the right to make a complaint to an insurance company if you feel you have not been treated fairly. For example, you may think the cancellation fee you had to pay was unreasonably high.

IF YOU CONTINUE TO OWN A VEHICLE YOU SHOULD ALWAYS HAVE IT IS FULLY INSURED OTHERWISE YOU COULD FACE A PENALTY SO MAKE SURE YOU HAVE NEW COVER ARRANGED BEFORE CANCELLING YOUR EXISTING POLICY.

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