Cooling-Off Periods Explained

You buy a policy. The paperwork lands. You read it properly for the first time and realise it is not what you thought. Or you find a better quote elsewhere. Or the circumstances changed an hour after you paid. The cooling-off period is the law's answer to that scenario — a defined window where you can change your mind, walk away, and get most or all of your money back.

This guide explains where the right comes from, how it works in practice, and what you can expect to pay for the days you were covered. It is general information, not advice.

What a cooling-off period is and where it comes from

A cooling-off period is a statutory right to cancel a contract within a defined window after entering into it. For insurance, the right is set by the FCA's Insurance Conduct of Business Sourcebook — ICOBS 7.1.

The rule has been around in various forms since the early 2000s, harmonised across the EU under various directives, and retained in UK law after Brexit. It applies to almost all consumer general insurance policies: motor, home, travel, gadget, breakdown, pet, cycle.

The window is 14 days for general insurance and 30 days for pure protection and life insurance. The clock starts on the later of:

• The day the policy starts.
• The day you receive the policy documents.

The "later of" rule matters. If the insurer dispatches documents three days after the policy starts, you have 14 days from when those documents arrive — not 14 days from inception.

How it applies to insurance specifically

The cooling-off right gives you the ability to cancel without giving a reason. The insurer cannot refuse the cancellation, cannot demand justification, and cannot keep more than the cost of cover used.

Some practical points the rule does not cover but most insurers apply:

• Cancellation must usually be in writing. A phone call followed by a written confirmation is standard.
• The insurer may ask for the policy documents to be returned, though most are content with electronic cancellation.
• If a claim has already been made or notified, the cancellation rules tighten — the insurer can usually retain the full annual premium to cover the claim being handled.

How to cancel within the cooling-off period

The process is usually:

1. Contact the insurer in writing — email or letter — within 14 days.
2. State that you wish to cancel under your cooling-off right.
3. Provide the policy number.
4. Confirm whether you want a full refund (no cover used) or a refund net of the pro-rata cost of cover already provided.

Most insurers process this within a few working days. The refund returns to the original payment method.

If you paid by instalments through a premium finance provider, the insurer cancels the policy and the finance provider unwinds the credit agreement separately. Both ends close. The instalments stop and any payments made are returned net of charges.

What you will be charged or refunded

Two scenarios:

No cover used. If you cancel before the policy actually starts — say the policy was set up to start next month and you cancel today — the refund is the full premium.

Cover used. If the policy has been live for any part of the cooling-off window, the insurer can deduct the cost of cover for the days used. This is usually pro-rata — annual premium divided by 365 and multiplied by days on cover. Some insurers also charge an administration fee. Read the policy schedule before assuming a full refund.

If the insurer applies a flat short-period rate — common in some commercial lines — that is unusual for personal lines and worth questioning if it is applied.

After the cooling-off period — what happens then

Outside the 14-day window cancellation still usually works, but the refund mechanics change.

Most policies allow mid-term cancellation, but with stiffer charges:

• A pro-rata refund for the unused portion is common.
• An administration or cancellation fee may apply.
• Some policies use a "short-period rate" table that returns less than pro-rata — three months on cover might cost more than three twelfths of the annual premium.

If you have made a claim during the policy year, the insurer can usually retain the full annual premium even on a mid-term cancellation. The logic is that the policy paid out for one of its covered events; you cannot also recover the premium.

Where this sits in the FCA rulebook

The cooling-off right for general insurance is set out in ICOBS 7.1 (Insurance Conduct of Business Sourcebook, Chapter 7). The same chapter sets out the firm's duties around cancellation, the limits on what they can charge, and the requirements for clear disclosure of the cancellation right.

The cooling-off right is mandatory. A firm cannot contract out of it. Wording in a policy that purports to remove or shorten the right is unenforceable.

Some specialist scenarios — commercial insurance for sophisticated buyers, certain reinsurance arrangements — sit outside the ICOBS retail regime and may not include a cooling-off right. For personal lines insurance this almost never matters.

Where this fits at Revive

Every policy sold by Revive carries the 14-day cooling-off right. Cancellation can be triggered through the customer area or by emailing the team. The terms and the cancellation route are set out on each policy schedule.

Key takeaways

• 14 days for general insurance. 30 for life and pure protection.
• The clock starts on policy start or documents-received, whichever is later.
• You can cancel without reason during the window.
• The insurer can charge for cover used and may charge an administration fee.
• Outside the window cancellation usually still works but the refund mechanics tighten.

Where to go next

• Make a Complaint at Revive — see /make-a-complaint
• FCA Complaint Routes — see FCA Complaint Routes Explained
• Claims Process — see Claims Process Explained