Key Points
- You can cancel any insurance policy at any time.
- If you have only recently purchased your insurance, your provider could provide a cooling-off period.
- If you've paid for your insurance up-front, you should be refunded for the cancelled portion of your policy, although insurers can charge a cancellation fee.
Can I cancel my car insurance early?
Yes. Whether it be for your car or your cat, you can cancel any insurance policy at any time. However, some insurers may charge a fee for processing this cancellation.
If you've only just signed up for your insurance, and have quickly changed your mind, you cancel without any penalty and receive a full refund. Initial cooling-off periods are typically during the first 14-21 days of a policy.
What if I paid for the whole year upfront?
If you paid upfront you should be reimbursed any unused premiums. For example, if you paid for twelve months upfront, but are cancelling after just four, you should get eight months' worth of premiums back (less any fees). However, be sure to clarify this with your insurer.
Note that if you've already made a claim on your insurance the amount you get back may be impacted.
What happens to my car insurance if I sell my car (or home)?
Car insurance doesn't automatically stop if you sell your car. So, if you do sell your car either:
- Contact your insurer and cancel your car insurance policy
- Notify your insurer that you want to transfer your insurance policy to a new vehicle
The rule to remember here is that car insurance follows the car, not the driver. So if you buy a new car your old policy doesn't jump to the new car with you. It stays with the old car.
It's for this reason that your car is (typically) still covered under your policy even if your friend is driving it.
The same logic tends to apply to other insurable assets, such as a home. So if you're moving house, be sure to update your insurance policies.
→Related article: Can You Sell a Car With Finance Owing?
How to cancel insurance
It should be pretty quick and easy to cancel any insurance policy.
Particulars on how to do so will vary between insurers but, typically, you can cancel your policy by visiting your insurer's website, signing into your account and following the necessary steps. Otherwise, be sure to contact your insurer for assistance.
→Related article: Car Insurance Renewal: What You Need to Know
Remember to organise any new insurance policies before you cancel!
If you're cancelling your insurance because you've found a better deal elsewhere, it's important you time things carefully. You don't want to find your car is completely uninsured for a time between policies.
A safe bet is to set the new policy to start one day before your old one ends. This way there will be no confusion about whether your car is covered.