There’s a big difference between you cancelling your car insurance and your insurer cancelling.
When you do it, it’s fine. You pay your fee, and you get your refund. And - apart from losing out on your no-claims bonus - your car insurance won’t be affected by it in the future.
But if your insurer cancels your policy, it means they think you did something to break the rules. And when you try to buy car insurance in the future, this won’t look good to insurers.
You won’t have to pay any fees if your insurer cancels your policy, but you won’t get a refund either.
If you’ve had your car insurance cancelled by your insurer, you might find it difficult to get a policy without looking for specialist brokers. At the very least, you’ll probably find the cost goes up.
Technically, insurance companies can cancel your policy at any time, and for any reason.
But they don’t tend to do it for no reason. It wouldn’t exactly be treating customers fairly to cancel car insurance policies for customers you simply didn’t want to insure any more.
Some of the more common reasons for getting your car insurance cancelled are:
Insurers can be pretty strict about what they consider "non-disclosure". Even changing the colour of your car can count, if your insurer thinks it's a "modification".
Sometimes insurers will “void” policies rather than cancelling them. There are a few differences between the two terms.
If your policy gets voided, it means it was never valid in the first place.
This could happen if you lied about certain things on your on your insurance application to get a cheaper policy, such as your:
Cancelling means your policy was valid when you bought it, but you did something after that broke the rules. Like adding cosmetic or performance car modifications, or not letting your insurer know that you changed jobs.
Voiding and cancelling can both make it harder to get car insurance in the future.
There’s a third reason a car insurance policy can end. And that’s “non-renewal”.
Non-renewal means your policy comes to an end, and you choose not to renew it. (Most car insurance policies automatically renew, so you normally have to choose to do this.) It’s not the same as cancellation or voiding.
It doesn’t count as cancellation or voiding.
If your insurer cancels your policy, don’t drive until you’ve got a new policy. If you’re caught driving without insurance, you could get a £300 fine and six points on your licence. (That’s the standard punishment for driving without insurance.)
Even if you aren’t driving the car, you’ll still need to get a new insurance policy. There’s a law called Continuous Insurance Enforcement that means your car has to be insured all the time, even if it’s just sitting in your driveway.
If you think your car insurance got cancelled wrongly or unfairly, you can make a complaint to your insurer. Different companies will have different ways of dealing with this, but it usually involves submitting something in writing.
If you’re still not happy after they get back to you, you can chat to the Financial Ombudsman about it.
There’s no fixed amount of time that cancelled car insurance stays on your record. And that's because there's not actually an official "record" of your cancelled car insurance policies. But insurers will usually ask you about it.
But insurers won’t always ask to see your full insurance history when you try to buy a new policy.
Most of the time, car insurance companies ask for details of at least the last five years. But some might ask for longer.
So if your car insurance got cancelled six years ago, and your car insurance provider is only asking for details for the last five years, you don’t have to include it, and so it shouldn’t affect whether you can get insurance - or how much it costs.
Cancellations are different to driving convictions.
Sometimes your insurer will cancel your policy, realise it was their mistake, and then “rescind” the cancellation.
If this happens, you don’t need to declare that cancellation next time you get a car insurance policy.
But if you do get a cancellation rescinded (lucky you), it’s best to get written confirmation that a) the cancellation was rescinded, and b) it was a mistake made by the insurer - not you.
Sometimes you'll also hear this called "reinstated" car insurance. Both words mean the same thing.
Updated on 23rd December 2020