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I certainly wouldn't be cancelling the policy at this stage, and if it is due to expire shortly, just leave it to do so. There is nothing to prevent having the policy continue, the car exists still and if there's loan cars then will be used to cover them. Once the policy expires, your no claims discount will increase by one year and you'll receive your proof of entitlement. This is valid for the next two years so in the interim, if there's no car to cover, you don't need a continuing policy to retain your NCD. You may find your NCD is "paused" while this claim is active, so any renewal policy will be at zero NCD, I have had this happen to me and I instructed my legal cover to recover my additional insurance costs from the 3rd party, which after much argument, was paid.
 

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Polo owner have insurance?
 
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