Can I cancel my car insurance if I pay monthly? - Best Money Saver

24th January 2019by Joanna White

When it comes to cancelling your car insurance, there are a few things you should be aware of.

Oftentimes, it’s not quite as easy as simply cancelling your direct debit and moving on; there’s often other processes that you must carry out in order to be able to cancel your car insurance.

This guide will tell you everything you need to know about cancelling your car insurance, especially whether you can cancel your car insurance if you pay monthly.

What you need to know – can I cancel my car insurance if I pay monthly?

In the simplest terms – yes, you can cancel your car insurance if you pay monthly.

One thing to bear in mind, however, is that just by simply cancelling your direct debit, doesn’t automatically mean that you’ve cancelled your insurance policy.

You must ensure that you tell your car insurance provider that you want to cancel your policy and make sure you receive the appropriate confirmation from them, otherwise you could still be billed for any unpaid premiums if they aren’t made aware.

When you cancel your car insurance if you pay monthly, you may also be faced with other fees such as cancellation fees as well as the possibility of having to pay a percentage of the total price of your policy.

In some cases, you may also be expected to pay for the remaining months that you have left on your insurance policy; however, you may be able to contest this with your car insurance provider if you don’t feel that it’s right.

How do I cancel my car insurance policy?

Cancelling your car insurance policy, even if you pay monthly, is a relatively easy process.

Once you’ve decided to cancel your policy, it’s imperative to let your provider know as soon as possible so that you can avoid having to pay any additional costs of your premium.

Each insurer will differ in the way they want to receive your confirmation, but you’ll likely do it via email, a letter in the post or over the phone.

Cooling off period

The cooling off period is the time between the moment you purchased your policy and when you’re no longer able to change your mind.

It usually lasts around 14-days but will likely vary between different providers. The cooling off period begins when you receive your new insurance policy documents (when the cover begins) and will last for around 14-days.

During that time, you have the option to cancel your insurance policy without paying for the entire cost of your policy. You may still be faced with small administration fees, but you won’t be required to pay out for the entirety of that month’s premium (if you’re paying monthly instalments, that is).

No-claims discount

Your no-claims discount (or no-claims bonus) is how long you’ve gone for without making a claim on your car insurance policy. Each insurance provider will differ slightly on what they deem as an acceptable time to be able to qualify for a no-claims discount, so you should check with your provider to be sure.

When cancelling your car insurance however, it is unlikely that you’ll earn that year’s no-claims discount, especially if you cancel right in the middle of the year.

Refunds

In terms of refunds when it comes to cancelling your monthly car insurance, it’s unlikely that you will be refunded for any amount that you have paid; these terms are usually reserved for annual policies.

Claims and cancellation

If you’ve previously made a claim on your car insurance policy, then you’ll be pleased to know that you can still cancel your policy, even if you pay in monthly instalments.

With annual payments (or upfront payments) it’s very unlikely that you’ll receive a refund if you cancel your policy when you’ve made a claim. If you pay for your car insurance monthly, then you may still have to pay for any remaining time left on your policy, or you could choose to pay it off all in one go.

Conclusion – can I cancel my car insurance if I pay monthly?

You may wish to cancel your car insurance for a few different reasons; whichever reason that may be, it’s good to know that you can cancel it if you pay monthly.

Providing that you let your insurance provider know via the appropriate method, and that you’re aware of the extras charges and cancellation fees you may face, cancelling your insurance policy is simple and easy to do.

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