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Car insurance providers have the right to cancel or void your policy if they believe you’ve violated their terms of service or broken the rules.
Having your cover cancelled or voided by an insurer can make it more difficult to get a cheap car insurance quote in the future.
In this guide, we’ll go over the reasons why policies can be cancelled by your insurer and what to do next.
The most common reasons an insurer might cancel car insurance are non-payment, non-disclosure and fraud. Drivers with a telematics policy might also see their policy cancelled if they drive dangerously.
Paying for your car insurance upfront is usually cheaper. But with the cost of cover increasing and the cost-of-living crisis making it difficult for many people to make ends meet, more drivers opt for monthly insurance payments.
Paying monthly increases the risk of non-payment. You might miss a payment if you switch bank accounts and your direct debit isn’t moved across correctly, or it might fail if you don’t have sufficient funds in your account.
Usually, your insurer will alert you to the missed payment and give you the chance to resubmit it in this situation. It’s crucial that you don’t ignore any correspondence from your insurer.
Don’t be tempted to stop payments if you’re short of cash or sell your car. Not only will non-payment result in your cover being cancelled, but it could also impact your credit record, as paying for insurance monthly is effectively taking out a loan and repaying it with interest – any missed payments are likely to be reported to credit reference agencies.
Non-disclosure happens if you leave out relevant information you were asked about when you took out or renewed your car insurance policy. If you fail to disclose something important – a “material fact” – your policy could be cancelled.
An example of deliberate non-disclosure would be if you lied about a previous motoring conviction. Or it could be innocent non-disclosure, such as forgetting to tell the insurer that you’ve changed jobs.
When you take out insurance, you’ll be asked what you intend to use your car for. The options are:
If you choose SDP – the cheapest option – but have an accident commuting to work, this will count as non-disclosure, and your policy could be cancelled.
It’s also considered non-disclosure if you use your car as a delivery driver but haven’t told your insurer about this. This type of work is deemed a substantial risk for insurers, and your provider may not have offered you cover if it had known about your job at the outset.
Car insurance fraud can take various forms. One common type – fronting – is when you name an older, more experienced driver as the primary motorist on your car insurance policy when the main driver is actually inexperienced or younger. More experienced drivers benefit from cheaper car insurance, so fronting is classified as fraud because it involves lying to get more affordable cover.
Other types of car insurance fraud include abandoning your car and claiming it has been stolen and “pre-inception loss,” which is when you try to claim on your insurance for damage that happened to your vehicle before you were insured. In the event of an accident, you might also commit fraud by exaggerating the extent of your injuries or losses.
Some types of organised crime involve car insurance fraud, such as staged crashes and “crash for cash” scams.
If you have a telematics or black box, your insurer will monitor your driving, including your speed, cornering, braking and accelerating. If your insurer notices you’ve been driving dangerously or at excessive speeds, it might cancel your policy.
Cancelled and voided car insurance policies will both leave you without cover, but there’s a slight difference between the two.
Cancelled car insurance policies are those that have been terminated before they were due to expire. However, the policy is still valid before the cancellation date, and claims made during this period may still be covered.
A voided policy means it was never valid in the first place, leaving you unprotected for the entire term. This means that claims made since you took out the policy but before the void date won’t be covered.
When you buy car insurance, the insurer will ask you several questions and make certain assumptions. Make sure you answer all the questions honestly and that the suppositions apply to you.
Remember that insurers can check your claims history using the Claims and Underwriting Exchange database. So, if you don’t tell your insurer about past claims, it may find out anyway.
If you move to a new address, change your job or modify your vehicle once your insurance policy is up and running, make sure you let your insurer know. The same goes if you start using your car to commute to work when you didn’t before. All these factors impact your car insurance premiums.
If you miss a car insurance payment or can’t afford an upcoming one, contact your insurer immediately. You might be able to make an online payment to catch up or agree on a new payment plan.
Driving without at least third party insurance in the UK is illegal. So, if your insurer has cancelled your policy, you’ll be breaking the law if you drive without having another policy in place. This could be tricky, as you’ll have to tell any new insurer you had a car insurance policy cancelled.
If you won’t be driving your car, you could register your vehicle as “off the road”. This is done via a statutory off road notification with the Driver and Vehicle Licensing Agency. You don’t need insurance if your car is declared off the road, but it means you won’t be able to drive it on public roads.
If your insurer cancels your policy, it should tell you why. You could appeal the cancellation if it was due to innocent non-disclosure or an administrative oversight. It’ll be more difficult to argue your case in the event of deliberate non-disclosure or fraud, such as fronting.
If you disagree with the insurer’s decision to cancel your policy or don’t receive a satisfactory response within eight weeks, you can take your case to the Financial Ombudsman Service. Resolving your complaint will take time, during which you won’t be insured.
Sometimes, it may be possible for an insurer to rescind a cancellation and reinstate your policy. This might be the case if your policy was cancelled due to an administrative error or for one missed payment. If your insurer agrees to reinstate your policy, make sure you get this agreement in writing.
But in most cases, especially those involving deliberate non-disclosure or fraud, your policy is unlikely to be reinstated.
When you buy car insurance, the insurer or price comparison site will ask you if you’ve ever had car insurance cancelled or voided by an insurer in the past. It’s essential to answer this question honestly, as the new insurer can check your insurance history, and failing to tell the truth will likely result in your new policy being cancelled, too. However, there’s no need to declare rescinded cancellations.
Insurers may see past cancellations as a red flag, depending on the reason for the cancellation. This means they may refuse to cover you or will charge you a higher premium. In some cases, you might need to go to a specialist insurer to find cover.
Cancellations due to fraud – such as fronting or cash for crash – are likely to be treated more harshly than having a policy cancelled due to a past due payment.
Yes, you’ll pay more for car insurance if your previous policy was cancelled or voided by your insurer.
A previous cancelled policy may also affect how you can pay. If it was cancelled due to non-payment, you might have to pay the premium for your new policy upfront rather than monthly.
Even if you’ve had car insurance cancelled in the past, there are several things you can do to find cheap car insurance. These include:
There’s no fixed answer to this question, as each insurer will ask about a different time period of your insurance history. Some insurers may only request your insurance information for the past five years, while others will want to know if you’ve ever had insurance cancelled.
It’s essential to always answer questions about cancelled insurance honestly – lying could mean another cancelled policy, making it even more challenging to find affordable cover.
Yes, a car insurance provider can refuse to cover you due to a previously cancelled policy. You can also be denied cover for other reasons, such as previous driving convictions. If an insurer asks if you’ve had cover refused in the past, it’s important to answer this question honestly.
Some insurers won’t explicitly refuse you cover, but they’ll quote an unaffordable premium you’re unlikely to accept.
If you use a price comparison site to find car insurance and input your details, it should only list insurers willing to offer cover for your circumstances.
Car insurers send customers a renewal quote towards the end of the policy term. You can accept this or switch to a new insurer. But sometimes, your current insurer won’t offer to renew your policy.
There are several reasons for this – it might be that the insurer doesn’t want business from people who live in your area or to insure your type of car. Or it could be that the insurer is exiting the car insurance market.
Non-renewal of car insurance is different to having a policy cancelled or voided, and it shouldn’t affect your ability to find insurance in the future.
You won’t have to pay any fees if your insurer cancels your policy. However, you’re unlikely to get a refund for any premiums you’ve paid.
If you, rather than the insurer, decide to cancel a car insurance policy, a cancellation or administrative fee will usually apply.
