Voided and cancelled car insurance

Car insurance is designed to protect us if the worst happens. But valid car insurance relies on you telling the truth and following the rules outlined in your policy. Failure to do so, even unintentionally, could leave you uninsured and struggling to find cover if your insurer cancels or voids your policy. Our guide will help you minimise the risk of voided or cancelled car insurance, and understand what to do if it happens.

What is voided car insurance?

Voided car insurance is any policy that has been ruled invalid by the insurer. There are a number of reasons this may happen. The most common are that the customer fails to pay their premium, or has submitted false or incorrect information to the insurer.

If an insurance provider voids a car insurance policy, it is equivalent to that policy never having existed and no protection ever having been in place. This, in turn, means that any claim being made (even before the date on which the policy was voided) will not be successful.

Ultimately, you’ll want to avoid having your car insurance voided at all costs. But to do that, you’ll need to understand how this could happen in the first place.

What’s the difference between voided and cancelled car insurance?

While the end result can be similar – you’re left without car insurance – there is a subtle but important difference between your insurer voiding and cancelling your cover.

• Voided car insurance means that an insurance provider has reason to completely invalidate your car insurance, leaving you unprotected for the entire term. This means that even claims made since you took out the policy, but before the void date, won’t be covered. This might be if, for example, you lied or omitted important details when you applied for the insurance
• Cancelled car insurance means that your policy has been terminated for some reason before it was due to an end, but was valid before the cancellation date. Claims made before the cancellation date may still be covered. An insurer might cancel your policy part way through the term if you miss a monthly payment, or change jobs without letting your insurer know.

In both cases, you may not be entitled to any refund of premiums you’ve already paid.

What are the main reasons for an insurer voiding or cancelling a policy?

There could be several reasons why an insurance provider might cancel or void a car insurance policy, but these reasons tend to fall into one of four categories:

• Non-payment of insurance premiums: this can include failing to pay them on time, or missing payments entirely
• Non-disclosure or omission: essentially, failing to tell the complete truth when you apply for insurance, or failure to update your insurer about important changes to your circumstances
• Fraud: the guidelines for fraud will vary by insurer, but it could include faking an accident, for example
• Breaching terms and conditions: by using your car for purposes that aren’t covered by the policy, for example.

What can I do if I think I’m going to miss a payment?

If you fail to pay for your insurance premiums on time or you miss payments altogether, your insurance company is likely to contact you to remind you about outstanding premium payments. It might also start discussions about putting in place an alternative arrangement for making the missed payments.

Although your insurance provider can cancel your policy at any time, it should give you sufficient warning before doing so. So, if you accidentally miss a payment (because of problems with your bank account, for example), you should be given the chance to put it right.

If you’re concerned about cash flow and worry that you’ll miss an upcoming monthly payment, get in touch with your insurer before it happens. That way, you can come to an agreement about how to manage the problem. It might give you a few days extra to pay, for example.

Bear in mind that while missing one payment is unlikely to invalidate your policy, consistently failing to pay can become a serious issue and result in cancellation.

What does non-disclosure or omission mean?

If your insurance provider finds out about information that you failed to share when taking out the car insurance policy it could decide to void your policy. This non-disclosure of information can relate to things like:

• Previously cancelled insurance policies
• Insurance claims or driving convictions in the last few years
• Medical conditions that could affect your ability to drive safely.

Failing to inform your insurer when your circumstances change can also falls into this category, and is likely to result in your policy being cancelled from the date of the change. You’ll need to tell your insurer if, for example, you move house, change jobs, make modifications to your car, or change car entirely.

Insurers will also need to know about any accidents, big or small, even if you don’t claim on your policy. This can include even minor scrapes. If you don’t tell your insurer about small accidents, and they later find out if you make a claim for more serious damage, it could render the later claim invalid.

An insurance provider will usually view each non-disclosure case separately and base its decision on how serious the issue is. For example, if the non-disclosure was an innocent mistake of information being missed off the car insurance application form, or you having forgotten about a claim a few years back, the provider may be more forgiving and simply adjust your premium (if appropriate) to account for it.

If, on the other hand, information was deliberately kept from an insurance provider, the company could treat it as fraud and decide to cancel or void your protection altogether.

Can an insurer check the details I put on my application form?

In some cases, yes. While they can’t check the details of medical conditions, for example, they have access to a central database (CUE), which has details of claims and reported incidents. So they’ll be able to quickly sniff out if you’ve made a claim that you haven’t disclosed.

What might count as fraud with an insurance provider?

Each insurance company will have its own set of guidelines around what it classes as fraud, but most will generally include the following:

• Driving without a full and valid driver’s licence
• The policyholder of the car insurance not being the main driver in order to lower premiums, known as “fronting“
• False information about what the car is used for; for example, most policies won’t cover your car for business use as standard
• False information about where the car is kept overnight
• False no claims discount certificates passed on to insurers for discounts
• Faking a car being stolen or in an accident in order to claim on the insurance
• Deliberately underestimating the number of miles you travel each year.

How can I safeguard against potential fraud?

As with non-disclosure, insurers are likely to consider the policy-holder’s intent (was the false information provided deliberately?)when deciding if they’ve committed insurance fraud. But there may be occasions when you find yourself accused of fraud even if it was unintentional.

Don’t risk it. It is likely to void your insurance, and could open you up to a prosecution for fraud.

• Always report accidents and incidents that result in damage or loss, even if you don’t intend to make a claim.
• Tell the truth when you fill in your car insurance application. Double check any details you’re not certain about, such as how long ago you made a claim or got points on your licence.
• Contact the insurer if your circumstances change, for example if you change jobs.
• Let the insurer know if you realise you made a genuine mistake – for example you underestimated your annual mileage.
• Tell your insurer if you want to add anyone to your policy as a named driver.
• Don’t risk accidental “fronting“, where you put a less experienced driver down as a named driver to lower premiums, even though they’re the main user of the car.

How can I reduce the risk of breaching terms and conditions?

You can sometimes invalidate your policy by doing something you didn’t even realise was wrong.

Things like the number of people you are allowed to have in your car and what you’re allowed to use your car for can vary between different policies and providers. Make sure you know exactly what your policy includes and what it forbids you to do to avoid any issues.

Some potential breaches are pretty obvious – such as driving without a licence, or driving under the influence. Car insurance exclusions it can be easier to accidentally fall foul of include.

• An obstructed windscreen. If you drive with morning frost, mud or dirt on your windscreen and have an accident, your insurer might refuse to pay out. You claim can also be rejected if your insurer believes that an accident was caused by an item suspended from the mirror or hanging in your windscreen affecting your line of vision or causing a distraction, so ditch that dangling air freshener (or get one that clips to your air vent).
• Failing to maintain your car. While even very well maintained cars can be involved in accidents, it’s important to make sure you take great care of your car to reduce the risk of an accident caused by a mechanical fault.
• Using your car for races, competitions or rallies. Driving on roads known to be particularly dangerous can also invalidate your policy.
• Overloading your car. Make sure you never overload the car with either people or things. Squeezing five of your mates into a car designed for four passengers, for example, could leave you on the wrong side of the law and your insurance company.
• Unleashed pets in the vehicle. If you take any four-legged friend along for a ride in your car, you must make sure they are correctly restrained. Under no circumstances should they be sitting in the front seat or on your lap. This protects you from invalidating your insurance policy and helps to keep them safe in case of an accident.
• Allowing your car to be driven by someone unnamed on your policy. Some people may be covered to drive any car through their own insurer, usually on a third-party basis, but this isn’t guaranteed.

These exclusions won’t necessarily result in your policy being cancelled. They could simply mean that incidents that take place while one of the exclusions is at play won’t be covered. But, either way, it’s not worth taking the risk.

What should I do if my insurer voids or cancels my car insurance?

If your insurance provider informs you that your car insurance policy has been voided or cancelled, it’s important that you don’t bury your head in the sand. Instead, it will be better if you contact your insurer immediately to find out the reasons. That way, you may be able to rectify the issue quickly.

If your provider is unwilling to reinstate cover, you will need to look for alternative car insurance immediately as your car will have no valid cover in place. Driving without insurance, even for a day or two, is an offence and could land you with a minimum £300 fine and six points on your licence.

If you are not happy with your insurer’s decision for cancelling or voiding your policy, you may be able to appeal. The quicker you act, the more likely you are to find a solution. Complain in writing to your insurer first. If you’re not happy with its response, you can escalate your complaint to the Financial Ombudsman Service (FOS).

Does a voided or cancelled policy affect me finding insurance in the future?

Unfortunately, yes. Having a car insurance policy cancelled or voided, even if the reason wasn’t your fault, can mean you struggle to find a policy to cover you. Providers will consider you a higher risk of being a problem customer, so may be unwilling to insure you at all.

Quotes from insurers that are willing to cover you are likely to be higher.

How much will my car insurance increase when I try to renew after it being voided or cancelled?

How long is a piece of string? Every insurer will apply its own criteria, but you’re likely to see a substantial increase.

The size of the increase may depend on the reason for the policy being cancelled or voided. If the reason your previous cover was cancelled relates to a conviction or fraud, an insurer is likely to assume you are more of a risk to insure, meaning your premiums could skyrocket.

Don’t be tempted to keep costs down by neglecting to mention the cancellation, though. This will only exacerbate the issue by voiding your next policy too, resulting in double trouble.

How long does voided or cancelled insurance stay on my record?

There is no set time that a cancelled insurance policy will stay on your record for. Some insurers may only request your insurance information for the last five years. Others may require you to share your history going further back than that. Always be upfront and disclose all information to the best of your knowledge. Failing to do this could cause you even more problems later on.

What is a rescinded car insurance cancellation?

Insurance companies sometimes make mistakes (hard to believe, we know). If they cancel or void your policy in error and then realise they’ve made a mistake, they will “rescind” the cancellation.

If this happens, you don’t need to declare it to any subsequent insurer. It’s a good idea to get confirmation in writing that the cancellation was, effectively, cancelled, and that it was down to the insurer’s mistake (not your own).

Bottom line

The shock of having your car insurance voided or cancelled by your insurer is definitely one you don’t want to experience. Not only could it leave you uninsured, it could make it tricky and expensive to find alternative insurance in future. Even if you have no intention of deceiving your insurer, sometimes innocent mistakes could put you at risk of invalidating your policy. Following the advice in this guide can help you keep that risk to a minimum.

Frequently asked questions

• Will I get a refund if my car insurer cancels or voids my policy?

  Possibly, possibly not. It will depend on the terms and conditions of your insurer and, potentially, the severity of the reasons for your insurance being cancelled or voided. You may be less likely to receive any refund if you have behaved recklessly or deliberately misrepresented information at any time during the policy.

• Is non-renewal the same as cancellation?

  No. You typically purchase car insurance policies for a year at a time. At the end of each year, you may or may not renew your insurance with the same provider. If you choose not to renew with the same provider, you simply take out a new policy with a different provider. No cancellation will be recorded, and you won’t incur cancellation fees. In some cases, your existing insurer may not allow you to renew with them. This is pretty rare, though, and still won’t count as your policy being voided or cancelled.

• Why would an insurance company not renew my policy?

  In some cases, an insurer may not offer you a renewal quote because because your circumstances have changed. Some insurers may not cater to drivers over a certain age, or in certain locations, for example. Alternatively, its own criteria for offering cover may have changed, even if your situation has stayed broadly the same.

• Do you have to declare if a previous insurance policy has been cancelled or voided?

  Yes. There might be some exceptions, but as a rule insurance companies ask during the quote process whether you’ve ever had a car insurance voided or cancelled. You must tell the truth, as failing to do so will definitely make your new policy void.

• Who will insure me if my car insurance has been cancelled?

  This really depends on the reason why your car insurance policy was cancelled in the first place. Most insurers may see you as a greater insurance risk. But by explaining your situation and being honest from the start, you may be able to find a specialist insurer that is willing to cover you and at an affordable price. While specialist insurers may be your main options, it’s still worth shopping around and comparing any deals that are offered to you.

• Can I cancel my car insurance if it automatically renews?

  Yes. If, as most people do, you buy or renew your car insurance online or over the phone, by law you have a 14-day cooling-off period from the day the policy starts or you receive your policy docs (whichever is later). The provider may make a pro-rate deduction to cover the days you’ve already been covered for. There may also be a small admin fee. If a fee applies, it is likely to be lower than any fees you would have to pay for cancelling outside of the cooling-off period.

• Can I cancel my car insurance if I sell my car?

  Yes. Whether you pay monthly or annually, you can voluntarily cancel your car insurance at any stage. Most, though not all, insurers will offer a pro-rata refund of any premiums already paid. You may need to pay a hefty cancellation fee, though.