Insurance is there to give you added protection if things go wrong. There are lots of types of insurances out there, with options to protect your health, life, home, vehicle, pets, and more. However, you may decide that you no longer want or need your insurance policy, due to things like affordability or a change in circumstance.
Cooling-off Period
A cooling-off period is a period of time you have to change your mind about a purchase. When buying an insurance policy, you are legally entitled to a period of 14-30 days in which you have a right to cancel, without facing any penalty, and without having to give any reason for cancellation. Some insurers may give you a longer cooling-off period, so if you aren’t sure how long this period is you should check the terms of your policy.
This cooling-off period begins either from the day you sign the contract or the day you receive your policy documents, whichever is later. The right to cancel during the cooling-off period does not apply to those who have purchased short-term policies such as travel insurance to cover less than a month-long period.
Costs
If you choose to cancel an insurance policy within a cooling-off period, the provider should refund you for any premiums you have already paid. The insurer may charge you for any days where the policy was active, as well as an administration fee.
If you cancel your policy after the cooling-off period, your insurer may still refund you money for the unused portion of your policy if you paid in advance. However, you may be charged a cancellation or administration fee. You may even not get any money refunded at all, so it’s important to check your policy terms beforehand.
If you have already made a claim on your insurance in the current policy year, and then wish to cancel it, it’s unlikely you will get refunded any premiums you have paid, as the insurer has had to pay out costs.
Cancellation
When cancelling an insurance policy, it’s important to ensure you contact your insurer, rather than simply cancelling your direct debit. If you cancel your payments but do not contact the insurer, you still owe them the premiums.
Some policies auto-renew, so you should make note of your renewal date to ensure you aren’t paying charges for a policy you no longer wish to have.