Cancelling home insurance

Key takeaways

• You can cancel your home insurance over the phone or online at any time, but a fee (typically £30-£50) may apply

• You can cancel for a refund within the 14 day 'cooling-off' period from when your policy starts or when you receive your policy documents

• If you’ve already made a claim, you won’t get a refund for any remaining term on your policy

• If you are switching insurers mid-policy to save money, factor in cancellation fees when working out how much money you will save

• Cancelling without alternative cover leaves you vulnerable to significant costs from disasters, so ensure you have continuous protection for your home and possessions

How to cancel your home insurance

You have the right to cancel your home insurance at any time. You might need to pay a fee (typically £30-£50) to do so. The fee will depend on whether you cancel in the 14-day ‘cooling-off’ period after you first take out a policy, and your individual insurer/policy.

Home insurance cancellation requests can’t usually be backdated, so your policy will only be cancelled after you contact your insurer – even if you haven’t needed the cover for some time.

What you need to know about cancelling your home insurance

How to cancel your home insurance. You will need to contact your provider either online or by phone (don’t just cancel your direct debit). Whether you will get a refund. This depends on how long the policy has been running and how much the administration fee for cancellation is.

How to switch to a cheaper provider. You’ll need to work out whether the cancellation fee will wipe out the cost savings of switching.

How cancelling your policy affects your no claims bonus. You won’t lose your no claims bonus if you cancel your policy – but you won’t gain another year’s bonus either.

Auto-renewing home insurance. Auto-renewal means your home will always be insured, but it might be at a higher price than before.

Short-term home insurance. You can buy home insurance for periods of time of less than the standard 12 months.

Think carefully before you cancel your home insurance – your home and possessions won’t be protected if you don’t have cover, and you could be significantly out of pocket in the event of a disaster impacting your home.

Can I cancel my home insurance at any time?

Yes, you can cancel your home insurance at any time. But whether you will receive a refund depends on several factors.

By law, you have a minimum 14-day cooling-off period during which you can cancel an insurance policy for any reason. The period starts either when the policy begins or when you receive your policy documents, whichever is later.

During this period you should be offered a refund for your policy, minus an amount for the days the policy was in place. You might also be charged a cancellation fee.

Can I cancel my home insurance after the cooling-off period?

Yes, you can still cancel home insurance after the cooling-off period. In this scenario, the insurer will usually give you a pro-rota refund. For example, if you cancel after 6 months, it might refund half your premium. However, you will normally be charged an administration or cancellation fee, which is normally £30 to £50. The cancellation fee, will be stated in your policy documents.

If you are thinking of cancelling your home insurance because you have found a cheaper policy, it’s important to factor the cancellation fee into your calculations as it may mean it’s cheaper to stay with your current insurer.

If you have claimed on your home insurance during the policy term (normally a year), you will usually still be able to cancel your policy, but you won’t get a refund for an unused time period.

With some insurers, if you have paid extra for add-ons to your policy, such as legal expenses, these won’t be refunded if you cancel your policy.

Do I really need home insurance?

Home insurance is not mandatory – but it is a good idea.

If you have a mortgage, it may be a condition of your mortgage to have buildings insurance. This will cover the structure of your home, and fixtures and fittings.

Contents insurance covers your possessions.

Remember, that if you cancel your home insurance and don’t buy alternative cover, you could face significant costs if something – such as a fire or flood – happens and damages your home or possessions.

How do I cancel my home insurance?

Only the policyholder named on the documents can cancel a home insurance policy.

You can normally cancel your home insurance by:

• Calling your insurer

• Completing an online form

In either case, you’ll need to tell your insurer your name, date of birth, address, policy number and renewal date.

When you ask to cancel your policy, your insurer should tell you about any related fees. If you feel these are too high, you can make a complaint to your insurer, then to the Financial Ombudsman Service if you and your insurer are unable to come to an agreement.

If you pay for home insurance via monthly direct debit, don’t just cancel your payments. Unless you tell your insurer you are cancelling, the policy will remain in place and the insurance company will chase you for missed payments. Information about missed payments may be passed to credit reference agencies and could negatively impact your credit report.

Will I get a refund if I cancel my home insurance?

Whether or not you can get a refund for the time you no longer need your home insurance will depend on the terms and conditions of your policy.

You should be offered a pro-rata refund if you cancel your policy within the 14-day period immediately after buying it. The only time this might not apply is if you have made a claim in this period.

If you cancel at a later date, and have already paid for your cover in full, most insurers will give you a refund based on how long your policy has left to run. However, the amount you receive will usually be minus an administration or cancellation fee.

If you pay monthly for your policy, which is usually more expensive than paying annually, you may also have to pay an administration fee to stop your payments.

You can usually still cancel a home insurance policy even if you’ve made a claim against it. However, you may find you’re not entitled to a pro-rata refund if this is the case.

Can I switch to a cheaper home insurance provider?

Yes, it may be possible to switch to a cheaper home insurance provider.

But before you cancel your existing policy and buy a new one, you need to work out if it’s really worth it. To do this, you need to factor in any administration or cancellation fee you’ll need to pay. For example, if you find a policy that’s £30 cheaper per year, but the cancellation fee is £30 or more, it won’t be worth it.

Do I need to cancel my home insurance if I move house?

If you’re moving house, contact your insurer in advance and ask if there would be any charge for moving your policy to a new property.

One of the factors used to calculate premiums is your postcode as certain areas are more at risk of water damage or flooding than others, while other areas might have higher or lower crime rates. So your premium could change if you move an existing policy to a new address. You should compare your new premium with quotes from other insurers to work out what’s best for you.

You can read this checklist to find out about other things you need to do when you move house.

Do I lose my no-claims discount if I cancel my home insurance?

No, you won’t lose any no-claims discount built up prior to taking out your policy simply because you cancel it. However, you won’t qualify for another year’s no-claims discount because you won’t have completed a claim-free year.

How can I cancel if I chose auto-renew home insurance?

When you take out home insurance, you may be offered the option to auto-renew the policy in 12 months’ time. If you do this, the next year’s premium will automatically be taken from the same bank card you used to pay for the policy.

The advantage of doing this is that there’s no risk of being uninsured, for example if you forget to buy a new policy. However, it means you’ll need to contact your insurer before your renewal date if you want to switch to another provider, and tell it to cancel the auto-renewal.

Auto-renewal doesn’t mean your policy will be renewed at the same price as before – your premium might go up. Your insurer should contact you a few weeks ahead of the renewal date to tell you what your renewal price will be.

You should shop around and compare this figure with quotes from other insurers. If your current insurer is offering the best deal, you can let your policy auto-renew. Otherwise you should cancel the auto-renewal and switch to a cheaper insurer.

If you just let your policy auto-renew, and then realise there are cheaper deals elsewhere, you will usually have to pay a cancellation fee to cancel your policy.

That’s why it’s a good idea to make a note of your home insurance renewal date and start shopping around for the best value policy a few weeks beforehand.

Can I get short-term home insurance?

Yes, you can take out short-term home insurance. You might need temporary home insurance if your home insurance is due for renewal but you’ll be moving house in a couple of months’ time.

Short-term home insurance generally provides similar cover to a standard policy – although it can work out more expensive, which is why it’s best used as a stopgap.

Cover can be arranged for as little as seven days, or can extend to three, six, nine, or 12 months.

Switching to a cheaper policy

If you still want to cancel your home insurance, it’s important to understand the implications. Not having buildings insurance in place may break the terms of your mortgage contract. It will also mean your home and belongings are unprotected.

If you decide to switch to a cheaper policy, you can find cheap home insurance deals by comparing policies with MoneySuperMarket.

All you have to do is answer a few questions about you and your home; then let us search the market for the most suitable deals from a range of providers.