How to cancel your car insurance

You can cancel your car insurance whenever you want – but you'll usually need to pay a small fee.

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Cancelling your car insurance isn't hard. All you have to do is contact your insurer and tell them you want to cancel your policy. You'll usually have to serve out the rest of the month and pay a fee of $30-$40. But it's still better than sticking with an insurer that you're not a fan of.

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. Cancellation benefits vary from brand to brand. Always read through the product disclosure statement (PDS) to make sure the product is suitable for you.

BrandCancellation feeContact NumberMore info
1300 Car InsuranceIf you cancel the policy, a pro rata proportion of the premium may be deducted. If a claim was made under this policy, no return of premium will be made for any unused portion of the premium.1300 467 872More info
1st for WomenCancellation fee of $401300 362 721More info
AAMICancellation fee of $30 for each car insured on the policy, plus FSL, GST and stamp duty if applicable.13 22 44More info
AllianzIf you cancel the policy, you may receive a refund of the unused premiums, minus reasonable administration costs.13 1000More info
Australia PostCancellation fee of $401300 858 747More info
Budget DirectCancellation fee of $40300 306 560More info
CGUNo cancellation fee. If you cancel your policy before it ends, CGU will refund a portion of the unused premiums.13 24 81More info
GIOCancellation fee of $30, plus FSL plus GST plus stamp duty for each car insured on the policy.13 10 10More info
NRMACancellation fee of $30, plus GST and any other government charges that apply.132 132More info
OzicareCancellation fee of $401300 360 066More 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.133 723More info
RACQ

If you cancel your policy, a portion of premium may be retained. A refund of the residual for the unexpired period, less the cancellation fee of $20 plus GST, the agency fee of $50 plus GST and any non-refundable government taxes or charges, provided that: no event has occurred where liability arises under the policy; and the residual amount is over $20.

13 1905

More info
RealThe cancellation fee is specified in your Certificate of Insurance.13 19 48More info
VirginCancellation fee of $401800 724 678More info
WoolworthsCancellation fee is specified in the Certificate of Insurance1300 10 1234More info
YouiCancellation fee of $33, inclusive of GST.13 YOUI (9684)More info
HuddleCancellation fee is specified in the Certificate of Insurance1300 777 200More info

Fed up with your current insurer? Rather than cancelling, it could just be time to switch

1 - 8 of 8
Name Product Roadside Assistance Accidental Damage Storm Choice of Repairer Agreed or Market Value
Budget Direct Comprehensive
Optional
Optional
Agreed or Market
Finder's summary: Awarded the 2021 Finder Award for Car Insurance - Value in QLD, SA, TAS, VIC, WA and Car Insurance - Features in NSW, VIC, WA, this policy offers solid coverage at a low cost. Budget Direct's claims service has received a 4.2/5 based on nearly 5,000 customer reviews.

⭐ Current offer: Get 15% discount on first year's premium when you take out a policy online. T&Cs apply.

Who it might be good for: People who want a comprehensive policy without breaking the bank.
Youi Comprehensive Car Insurance
Optional
Agreed or Market
Finder's summary: Youi Comprehensive Car Insurance is one of the few providers to include roadside assistance in its policy. You'll also get access to YouiRewards which gives you discounts on furniture, parking and more. Youi also has a live chat feature on its site to talk through any questions.

Who it might be good for: People over 25 who want comprehensive cover with a focus on customer service.
Coles Comprehensive
Optional
Agreed or Market
Finder's summary: With Coles comprehensive car insurance, you could earn double flybuys points at Coles supermarkets and you can get $10 off your Coles grocery bill every time you redeem 2,000 Flybuys points. If your car is damaged, you could benefit from a one-week turnaround on repairs.

⭐ Current offer: Get 10% off your first year's premium when you take out a policy online. T&Cs apply.

Who it might be good for: Coles customers and Flybuys collectors.
QBE Comprehensive
Green Company
QBE Comprehensive
Optional
Agreed or Market
Finder's summary: QBE is a sustainable insurance company and also Finder's Green Insurer of the Year 2021 award winner. This policy offers the highest level of protection available from QBE including three-year new car replacement.

⭐ Current offer: Save $75 when you purchase a new comprehensive policy online. T&Cs apply.

Who it might be good for: Those that are looking for a more environmentally friendly insurance choice.
ahm Comprehensive
Optional
Both
Finder’s summary: ahm comprehensive car insurance lets you choose higher excess to reduce your premiums. Its Fixed Kilometre Plan can save you up to 30% compared to its standard comprehensive cover.

⭐ Current offer: Get free roadside assistance* for 12 months when you sign up by 30 June. T&Cs apply.

Who it might be good for: People who drive less than 15,000 km per year.
KOBA Pay per KM
Agreed
Finder's summary: KOBA car insurance uses a pay-per-km system – ideal if you drive less. It offers comprehensive cover for things like theft, hail, fire and 3rd party damage.

⭐ Finder Exclusive: Receive a $150 visa gift card to use as you wish with promo code: Find2022. T&Cs apply.

Who it might be good for: Anyone who doesn't drive that much or want to limit how much they're on the road.
Qantas Comprehensive
Optional
Optional
Agreed or Market
Finder's summary: You'll be able to choose how comprehensive you want your cover to be with optional extras like choice of repairer and the option of agreed or market value.

⭐ Current offer: Earn Qantas Points for joining and paying your premium. Sign up today and earn up to 20,000 Qantas Points (points awarded will be based on your premium). T&Cs and eligibility apply.

Who it might be good for: People who'd like to earn Qantas Points.
Huddle Black Comprehensive
Agreed or Market
Finder's summary: Huddle's black comprehensive is its cover with highest limits and exclusive benefits. It includes roadside assistance. You can also get up to $2,000 for emergency travel and accommodation and up to $30 million legal liability cover.

Who it might be good for: Someone who wants a 24/7 claims processing.
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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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