We’ve all done it; bought something that we only realise afterwards isn’t what we actually thought it was, or what we really wanted or needed. In the past, consumers had far fewer rights, and this could lead to serious financial difficulties for people who had made genuine mistakes.
However, the Consumer Credit Act means UK citizens now have much greater protection from making ill-informed or heat-of-the-moment decisions they later regret, and, potentially, being mis-sold financial products.
Why you might want to cancel cover
There are a variety of reasons why you might want to cancel a home insurance policy.
You may have found a better deal elsewhere, or realised there are costly elements included in the policy which you don’t need, or you’ve moved abroad and don’t require home cover in the UK any more.
Here are your rights and what to do if you’ve taken out a policy and decide to subsequently cancel it:
Cancelling during the ‘cooling off’ period
When you first take out cover, you have 14 days during which you can cancel it without any questions asked.
This is the ‘cooling off’ period and it starts from either the date your policy is due to begin or when you receive the policy documents, whichever is the later. You should get a full refund of any money you’ve paid out, less any days the cover was actually in force. Generally, an insurer will deduct a set-up charge, typically around £15, but that’s all.
Cancelling a policy isn’t necessary if you’re simply changing the existing cover, such as to cover a property you’ve moved to or a new garage you’ve had built in your garden.
Cancelling after the cooling off period
Cancelling a policy after the 14-day cooling off period isn’t quite so easy, but still relatively straightforward. Usually, insurers give you a pro-rate refund, assuming you haven’t made any claims up to the moment you decide to cancel. As above, this will be minus some sort of administration charge and/or set up fee and you’ll find this detailed in the small print (for post-cooling off period cancellations, this is typically between £30 and £50).
Any discount applied at the time you took out the policy is likely to be deducted from the sum returned to you. Other small charges could apply. You need to check, and these will be detailed in the terms and conditions.
If you’re cancelling because you’ve found a better deal elsewhere for the same level of cover and think it’ll save money, make sure you include the costs of cancelling when working out the difference. And you should note that simply cancelling a direct debit for your monthly premiums doesn’t cancel the policy. You will still owe the insurer the missed premiums unless you inform them you’re cancelling the policy itself!
Before you do anything, speak to your insurer and check your policy documents. You don’t want to suddenly find you’re without cover. If you’re moving to a new insurer you might need confirmation of a no-claims bonus, for example, and you would want to make sure your old insurer is going to provide this in time for when you want your new policy to start.
How to cancel
In most instances, you will need to write to your insurer to cancel a policy, explaining exactly when the policy should cease. This might be a date in the future to ensure it dovetails with a new policy. Likewise, you could always have a new policy in place before cancelling the old cover. It might cost you a little more, but it gives you the certainty that you’re covered.
We have a real passion for making sure people get the cover that’s right for them. We’re driven by a desire to help you find not only the best value insurance, but the right insurance for your individual needs. For more information speak to one of our experts on 0203 014 9300 or email email@example.com