Cancellation of Car Insurance Policies

Please remember that it is an offence to drive without car insurance.
Cancellation is the termination of a car insurance policy before the expiry date. Cancellation occurs during the life of a car insurance policy and does not include policies that are not renewed at their renewal date
A car insurance policy can be cancelled by notifying us at any point prior to the policy expiry date. A policy may be cancelled with immediate effect or at a date in the future
We will always send a letter of cancellation to confirm the cancellation of a car insurance policy
Customers will have to return all currently valid (unexpired) Certificates of Motor Insurance. If the certificate(s) have been lost, stolen or destroyed, in order to comply with statutory legislation, we will send a declaration form which the customer will need to sign and return. Failure to return the certificate(s), or sign the declaration, is an offence under the Road Traffic Act
No premiums will be refunded until all currently valid Certificates of Motor Insurance have been returned, or the declarations have been signed and returned (see previous point) or the cover note has expired
If a car insurance policy is cancelled following a claim or any incident which subsequently gives rise to a claim, any premium due will remain payable. The Claim has to be for a total loss in the first 14 days to ensure the whole premium is due
Under the Financial Services (Distance Marketing) Regulations 2004, a customer who cancels a car insurance policy within 14 days of receiving their policy documentation is entitled to a proportional refund of premium from the date the unwanted Certificate of Insurance is returned. The customer will not be entitled to the refund of any fees that have been paid
After the first 14 days the following rules apply:
If a car insurance policy is cancelled we will calculate the premium for the period of cover based on the short period rates in force at the time. Please refer to the Policy documentation for more details of short-term rate premium
Note that when a car insurance policy is cancelled, all related additional cover such as Motor Legal Protection and Breakdown Cover will be cancelled at the same time. The premiums for Motor legal Protection is not refundable, unless the cancellation takes place within 14 days of receiving the policy documentation
Refunds will be paid back into the account that the premium came from unless the account holder is deceased. If the account holder is deceased, we will need confirmation in writing to prove the name of the executor of estate so that a cheque can be sent to them
If a car insurance policy is cancelled prior to expiry, a fee will be payable. Please refer to the Policy documentation for more details of refunds and fees applicable
We will issue proof of No Claims Discount as long as all of the premiums owed have been paid
Note that simply cancelling a direct debit does not cancel a car insurance policy or any premiums that are due.

Short-term premium rates:

Please note that short-term premium rates do NOT apply during the first 14 days after receiving the Policy Documentation
The application of short-term rates is a common practice throughout the car insurance industry
These rates are applied when a customer cancels their car insurance policy early. The customer has failed to stay insured with us over the agreed period of time. Had we known at the inception of the policy that the customer only wanted the car insurance for a reduced time period we would have charged a higher premium at the onset of the agreement. If the customer cancels early we are entitled to apply the higher premium rates, called short-term premium rates. Higher premiums apply to car insurance policies held for reduced time periods because of the increased risks to insurance companies from fraudulent claims activity
If an annual car insurance policy is cancelled during the cover, short-term premium rates are applied. This means that customers who have paid the premium in full by a lump sum payment are only entitled to a percentage of the paid premium as a refund
Customers paying by instalments usually owe some money to cover the short-term premium rates. The amount of premium retained depends on those rates in force at the time of the cancellation and the month in which the cancellation takes place