Phone insurance won't cover my new phone or let me cancel: who helps?

Summary

Most insurance comes with a 14 day cooling off period. After that, what you pay to cancel depends on your policy terms. Insurers must still treat customers fairly and should not put unreasonable barriers in the way of leaving. Charging you for a full year when they cannot cover your new phone is worth challenging. Ask in writing for a pro rata refund, or for cover to move to your new phone. Then complain and, after 8 weeks, go to the Financial Ombudsman.

Key information

• Cooling off: you can usually cancel within 14 days of buying or receiving the documents, paying only for cover you had.
• After 14 days: the policy wording sets the rules. Look for "cancellation" and any fee.
• Paying monthly: if you pay an annual policy in monthly instalments, the insurer may ask for the rest of the year. Check whether that is in the terms you agreed.
• Fair treatment: under the FCA's Consumer Duty, firms must offer fair value and should not make it unreasonably hard to cancel.
• Your old phone: if you still have the old phone, it may still be covered. Ask.
• Who sold it: if a network or retailer sold the policy, complain to them as well.
• The insurer can: explain its cancellation terms and any fee, and consider a pro rata refund or moving cover to your new phone; give a final response to a written complaint within 8 weeks. They will not waive fees unless you ask in writing.
• The Financial Ombudsman Service can: decide whether the insurer treated you fairly, including cancellation charges. See insurance complaints; tell it to refund or reduce charges if they were unfair. They will not take the case before the insurer has had 8 weeks or given a final response.
• Citizens Advice can: explain your rights using cancelling an insurance policy. They will not complain for you.

Practical guidance

• Find your policy documents and note the cancellation clause.
• Write to the insurer: your new phone is not covered, so the policy no longer works for you. Ask for cancellation with a pro rata refund and no balance to pay, or cover moved to the new phone.
• Do not just cancel the Direct Debit: the insurer may treat the balance as a debt.
• If it refuses, make a formal complaint and ask for a final response.
• After 8 weeks or a final response, go to the Financial Ombudsman.
• Ask the Shaman to order the steps.

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