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
Depending on your insurance company's rules, there are a variety of ways to cancel your policy. Call your provider. Most major companies simply ask that policyholders speak with an insurance agent to cancel. The phone number likely will be found on your insurance card, as well as on the company's website or app.
What happens if you cancel an insurance policy? ›
Some insurance companies permit you to cancel right over the phone or online. Other insurers may require written notification or a signed document. Generally, insurers will refund you the money for the unused portion of your policy, assuming you paid in advance.
Are you penalized for canceling insurance? ›
At the same time, you might also be subject to a cancellation fee. Many companies don't charge such penalties, but with those that do, you can expect to pay a flat fee of under $100 or around 10% to 15% of the remaining policy premium.
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.
How much does it cost to cancel insurance policy? ›
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.
Is it bad to cancel insurance early? ›
If you cancel your insurance policy before your policy expiry / renewal date, your insurance company will typically charge a percentage of your total insurance premium for the year that is higher than the per day amount would be. This is called a short rate cancellation penalty.
Can I cancel my insurance policy any time? ›
You can cancel a policy at any time. Make sure to have your new car insurance in place before canceling. You don't want any gap in coverage—even if it's a day. You may also decide to cancel a policy at the end of your term, so you don't face a cancellation fee if your policy has one.
Is it bad to cancel car insurance? ›
If you cancel your car insurance before getting new coverage, your record will show an insurance gap. This insurance gap is referred to as a lapse. Even if you canceled because you sold the vehicle, an insurance lapse frequently results in costlier premiums when you pick up coverage.
Can you cancel insurance and get it back? ›
Your insurance company may issue a refund if your policy is canceled, and you've paid your premium in advance. Receiving an insurance refund will largely depend on why you're canceling the policy and how much of the premium you paid in advance.
Is it hard to get insurance after being Cancelled? ›
Is it hard to get car insurance after being canceled? Getting car insurance after being canceled can be tricky, but you should first ask your previous insurer to see if they'll reinstate the policy. If they won't, you can reapply for a new policy with the same insurer or shop around.
Yes. While car insurance policies are usually taken out for 12 months and paid either up front or through monthly premiums, you can cancel at any time. However, cancelling doesn't come without consequences. Cancelling before the end of your policy's term may result in paying a cancellation or administration fee.
Who has the right to cancel an insurance policy? ›
An insurance company has the right to cancel your policy if you do not fulfill your obligations under the policy agreement.
How to avoid insurance cancellation fees? ›
To avoid cancellation fees, it is important to contact the new insurer to notify it of your decision before the date at which the contract comes into force. Be aware, though, that if you dealt with an insurance broker to find a contract, the broker may charge you a fee.
Can you cancel insurance mid year? ›
Cancel your health plan any time
You can cancel your Marketplace coverage any time. You may need to do this if you get other health coverage, or for another reason. You can end coverage for: Everyone on the application after your coverage has started.
Do I need to cancel my car insurance before switching? ›
Your new insurance company can provide proof of insurance to your old company if necessary, but they generally aren't authorized to cancel a policy with another insurer on your behalf. After you purchase a new policy, you should immediately contact your former insurer and cancel your old policy.
How long does it take for insurance to refund you? ›
The time it takes to get your money back depends on how you choose to get your refund. For example, a direct deposit typically takes around two weeks to show up in your account. It may take longer if the insurance company sends a check since you'll have to wait for it to arrive.
What happens if you cancel insurance on a financed car? ›
Neglecting to carry a full-coverage policy on a financed car would probably violate your loan contract. In that case, the lender could repossess your car. It may instead opt to get force-placed insurance, which generally costs you much more than coverage you'd find on your own.
