How to cancel your car insurance

Don't get stung. Find out how to do it the right way.

Have things been on the rocks for a while? Is it time to break up with your car insurer?

Here’s everything you need to know before doing so.

Can I cancel my policy at any time?

Yes. If you want to cancel your car insurance, an insurer can’t say no.

Contact your insurer in writing and tell them you want to cancel your policy. Find their details online and send a letter, fax, or email outlining your intention

If you’re not sure what the best option is, call your insurer first and ask.

Looking to switch insurers? Compare your options below

Name Product Name Agreed or Market Value New Car Replacement Pay Monthly At No Extra Cost Choice Of Repairer Roadside Assistance Hire Car After Theft
Market
Optional - If your car is written off in the first 3 years
No
No
No
Optional - Up to $50 a day until your claim is settled
Save 24% on your policy if you've been claim free for 3 years.
Agreed
Yes - If your car is written off in the first 2 years or is under 40,000 km
No
Yes
Optional
Yes - Up to $1,000 (Max 14 days)
Buy online and save 15%.
Agreed
Yes - If your car is written off or stolen in the first 2 years
No
Yes
Yes
Yes - Reasonable costs (Max 14 days)
Emergency roadside assistance included in Comprehensive policies.
Agreed
Yes - If your car is written off in the first 2 years
Yes
No
Optional
Yes - Up to $70 per day (Max 14 days)
Save up to 10% when you buy online.
Agreed
Yes - If your car is written off in the first 2 years or is under 40,000 km
No
Yes
Optional
Yes - Up to $1,000 (Max 14 days)
Save 15% when purchasing online. Eligible customers can earn 5,000 Velocity Frequent Flyer Points when purchasing a new policy by 31 Dec 2018. Excludes NT. T&CS apply.
Agreed
Yes - If your car is written off in the first 2 years
Yes
No
No
Yes - Up to $70 per day (Max 14 days)
Transforms your driving so it's 100% carbon neutral.
Agreed
Yes - If your car is written off in the first 2 years
Yes
Yes
No
Yes - Up to $100 per day (Max 30 days)
Buy online and save up to 10% on your policy.
Agreed
Yes - If your car is written off in the first year or is under 20,000 km
No
No
Optional
Optional - Up to $60 per day (Max 14 days)
Save up to 20% on car insurance when you purchase cover online.

Compare up to 4 providers

Person-Driving

Are there any cancellation fees?

It depends on the insurer. There may be some cancellation fees, however there may also be cancellation refunds for unused portions of your premium.

If you cancel within the cooling-off period (typically within 14 days of taking out a policy) and have not made any claims, you should be able to get a full refund minus various processing fees.

Look below for a list of cancellation fees and refunds that are available with different Australian insurers.

BrandCancellation feeMore info
1300 Car InsuranceCancellation fee of $40More info
1st for WomenCancellation fee of $40More info
AAMICancellation fee of $30 for each car insured on the policy, plus FSL, GST and stamp duty if applicable.More info
AllianzIf you cancel the policy, you may receive a refund of the unused premiums, minus reasonable administration costs.More info
Australia PostCancellation fee of $40More info
Budget DirectCancellation fee of $40More info
CGUNo cancellation fee. If you cancel your policy before it ends, CGU will refund a portion of the unused premiums.More info
DodoCancellation fee of $40More info
GIOCancellation fee of $30, plus FSL plus GST plus stamp duty for each car insured on the policy.More info
ibuyecoCancellation fee of $40.00More info
NRMACancellation fee of $30, plus GST and any other government charges that apply.More info
OzicareCancellation fee of $40More info
QBEIf you've paid your premiums in advance, QBE will refund you the proportion of the premiums for the remaining period of insurance, less any administration fees.More info
RACQRACQ will refund your remaining premiums if you cancel your policy prematurely. If the refunded premiums are less than $100, a fee of $10 will be deducted.If the refunded premiums are more than $100, a cancellation fee of 10% of the refunded amount will apply, up to a maximum of $80.More info
RealThe cancellation fee is specified in your Certificate of Insurance.More info
VirginCancellation fee of $40More info
WoolworthsCancellation fee is specified in the Certificate of InsuranceMore info
YouiCancellation fee of $33, inclusive of GST.More info
HuddleCancellation fee is specified in the Certificate of InsuranceMore info

When will I not be able to cancel my policy?

There are no situations where you cannot cancel your policy. If you want to cancel your cover, an insurer cannot say no.

However, cancelling your policy doesn’t necessarily get you off the hook for any payments you owe to an insurer, and will not necessarily entitle you to any refund.

What are the consequences of cancelling a policy early?

The main downside of cancelling a policy early, other than losing your cover, is that you may not be getting everything you paid for and may need to pay additional cancellation fees.

But there are still valid reasons for doing so. You may consider canceling your cover if:

  • You only want short term car insurance (cover for less than a year).
  • You’re switching car insurance.
  • You’re selling or gifting the car, trading it in, moving overseas or for any reason don’t want to maintain your current car insurance.

Can I transfer car insurance policies to someone else?

Generally no. A new person will need to take out their own policy, so they can get their own pricing based on risk.

The exception is CTP insurance which can typically be transferred along with car registration in most states. For example, if you sell a car then you may be able to transfer over its current CTP insurance as well.

Can I transfer my policy to another car?

Yes. Many insurers will let you transfer your current policy to another car, although this may vary between insurers, and insurers are free to decline to cover your new car at their sole discretion.

If you do transfer your policy to another car you can expect your prices to change accordingly.

Generally insurers want to keep customers, so transferring your policy to another car can be done easily. Simply contact your insurer and ask.

Can I just wait for my policy to lapse?

Yes. Sometimes this may be the better option in order to avoid paying cancellation fees. But if you’re doing this you need to know whether or not your policy will automatically renew.

If it does then you may try asking your insurer to simply not renew it, or can remember to cancel your policy immediately before the renewal date.

Typically the cooling-off period also applies after renewals, as well as after taking out a new policy, so if you were caught by surprise with an automatic renewal you have a couple of weeks to cancel your policy for a full (minus administrative costs) refund.

What are the alternatives to cancelling my coverage?

If you want to switch car insurance, change your type of cover or otherwise discontinue your policy then cancelling is probably the way to go.

However, if you’re looking to reduce the cost of your current cover, or want to make adjustments, then you will not necessarily need to cancel it first. But depending on what you want to change, an insurer may tell you to cancel your current policy and then take out a new one with different terms.

Some of the things you may be able to change without cancelling your policy include:

  • Your cover options and extras
  • Your excess
  • Your sum insured
  • Your covered modifications and accessories

Other times, an insurer may be willing to waive your cancellation fee if you’re changing policies but not insurers. For example, if you want to upgrade from third party car insurance to comprehensive car insurance, an insurer may be happy to cancel your current policy and give you a new one without charging any fees.
Picture: Shutterstock


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Andrew Munro

Andrew writes for finder.com, comparing products, writing guides and looking for new ways to help people make smart decisions. He's a fan of insurance, business news and cryptocurrency.

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