How to cancel your car insurance policy

All you need to do is pick up the phone and call your insurer to cancel your car insurance policy. It's that simple!

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Peta Taylor

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Key takeaways

  • Cancelling car insurance is simple; just call your insurer and settle any outstanding monthly payments or receive an annual refund.
  • Some insurers don't charge a cancellation fee, while others do — and the amount can vary by insurer and policy.
  • If you're finding premiums pricey, negotiate with your current insurer first: Finder's car insurance expert Peta Taylor saved about $200 by asking hers for a better price.
Cancelling your car insurance is really straightforward. Just call your insurance provider and get it done — that's it!

How the insurer goes about cancelling it though can vary based on how you pay your premium — monthly or annually. Typically, it’ll go one of two ways:

  1. If you pay annually, the insurer will refund the unused part of your premium.
  2. If you pay monthly and you've got an outstanding bill, you'll just need to pay that off before your policy is cancelled.

Cancelling within the cooling-off period

If you've only just taken out or renewed your policy, you can cancel it within the cooling-off period and get a refund of the premium you've paid, as long as you haven't made a claim. The law gives you at least 14 days, and some insurers offer longer, so check your policy's PDS for the exact period. This is separate from the pro-rata refund described above, which applies when you cancel later.

Are there any cancellation fees?

Not all insurers charge a cancellation fee. Those who do may charge a fee — in some cases it can be $50 plus GST.

If you pay your premium annually and are charged a cancellation fee, it will be deducted from your refund. If you pay monthly, you will owe the outstanding amount along with the cancellation fee.

You can also check your insurer's product disclosure statement (PDS) for confirmation of the cancellation charge.

Can I transfer car insurance policies to someone else?

It's generally a no for comprehensive and third party property damage or fire and theft policies.

This is because car insurance policies are priced based on the primary driver’s level of risk. However, you can always call your insurer to double check their rules.

Compulsory third party (CTP) insurance is the exception. This can often be transferred along with car registration in most states.

You might wish to do this if you’ve sold your car and want to put the CTP in the new car owner’s name.

Can I transfer my policy to another car?

In most cases the answer is yes.

However, it’s important to understand that transferring your policy to a new car will come with a change in the price of your premium.

Depending on the car you switch to, your premium could go up or down. Insurers look at a range of risk factors and vehicle details when pricing your cover.

There’s a good chance you’ll have to answer a bunch of questions, just like you would if you were taking out a new policy.

Is it time to cancel, or do you just need to switch?

This will primarily depend on your situation.

If you simply don’t need car insurance anymore, then go right ahead and cancel your policy.

But if you do still need insurance and are simply finding the premiums pricey, there are some potential steps that could ease your bank balance a bit.

Oftentimes, your insurer is more interested in keeping you as a customer and will drop its price for your loyalty.

Try this tip from Finder’s car insurance expert, Peta.

Picture of Peta Peta Taylor, car insurance expert

“Getting on the phone and asking your insurer if they can give you a better price is a tip I will live and die by. They’re often more concerned with keeping you as a customer so they’ll lower their premium if you just ask. Last time I got my car insurance renewal, it was so expensive that I was ready to cancel it. Instead, I got on the phone and asked if they could be flexible with the price. I ended up saving about $200! There’s no catch, it’s just that easy.”

Use this script to negotiate with your insurer

You:"Hi! I was looking at my car insurance premium and it’s more expensive than I was expecting. I was wondering if there’s any flexibility around that price? I’ve gotten a few other quotes elsewhere that are coming in cheaper."

Them: "Hello. No worries, let me see what we can do for you."

At this point, they’ll typically transfer you to someone in sales.

Sales team: "Hi, I can see here that you’d like to see if we can do a better price for you on your car insurance premium. We may be able to reduce this for you. How does that sound?"

You: "That’s excellent, thank you!"

Alternatively, if they’re unwilling to budge on price then it’s time to compare and switch.

FAQs

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Peta Taylor is a publisher at Finder, working across all of insurance. She's been analysing product disclosure statements and publishing articles for over 2 years. Peta is passionate about demystifying complex insurance products to help users make well educated decisions with confidence. Peta is part of Finder's insurance awards team and works alongside editorial and insights experts to bring users the best insurance products every year. See full bio

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