Changing motor insurance policy mid-term

rory41444

Martin Lewis in a car insurance article suggested cancelling your motor insurance policy and sign up with a new company if you manage to find one who will insure you for less. A contributor to these forums in a previous thread made it clear that when signing up for motor insurance you are entering into a yearly contract and you cannot prematurely cancel it without incurring penalties. Who is correct?

mattymoo

Many policies carry a 14 or 30 day cancellation period. If you take out the policy then, within 14 / 30 days find you could have insured for less, you can cancel without penalty providing you have not made a claim.

Beyond this period penalties do apply.

Astaroth

Both are correct.

Most policies can be cancelled after the legal 14 day cooling off period however will carry charges to do this.

What you obviously need to do is see how much it will be to make a mid term amendment and then cross compare that to the new quotes you get adding on the cancellation fee.

Also need to consider the NCD effect if you have less than the maximum NCD as you lose the part year

lisyloo

Some policies have no penalties.
Some will only charge a penalty in the first year but not afterwards.

As others have said you need to take this into account before deciding whether to switch or not.

ArchieB_2

Even in the first 14 days, if the policy has commenced, some policies will make an 'admin' charge. As ever, read your policy and weigh up the charges vs new premium saving vs impact on NCD.