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Cancelling Car Insurance

Learn about the process of cancelling your car insurance right here with Savvy.

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, updated on February 15th, 2024       

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Car Insurance Banner - A young couple examine their car insurance bills and consider whether to cancel their policy.

Car insurance is necessary for every car owner, but there may be times when your policy is no longer appropriate. Whether it’s because you need a different type of cover, are no longer a car owner, are moving abroad or are simply unhappy with your current policy, there are several reasons to cancel your car insurance.  

If you want to learn more about cancelling your car insurance policy, Savvy can help. In this informative guide, we take you through the cancellation process and answer common questions you may have. Find out how to cancel and the implications of doing so today with us.

How do I cancel my car insurance?

Regardless of the reason, if you no longer need or want your car insurance, you’re entitled to cancel it. Most of the time, this is a quick, straightforward process. You should:

  1. Review your policy: before you cancel your policy, you should review your policy documentation to familiarise yourself with the cancellation process, including what to do or any fees that may be applied.
  2. Contact your insurer: the next step is to inform your insurer that you want to cancel your policy. Depending on your insurance company, this may be done via an online platform or app, by email or over the phone.
  3. Provide the necessary details: your insurer will require certain details, such as when you want the cover to end (you may need to serve out a certain period, such as the rest of the month) and refund details (if applicable).
  4. Receive confirmation: your insurer should confirm the cancellation in writing, by email or by post. Once it’s been confirmed, your policy will end on the date agreed with your provider.

Can I cancel my car insurance policy at any time?

You can cancel your car insurance policy at any time and for any reason. However, while you have the right to cancel, it’s important to understand any contractual obligations you may have, such as giving advance notice or paying cancellation fees. If you’re still going to be driving in Australia, it’s also important to have alternative coverage in place before cancelling if you wish to continue being covered when you’re on the road.

What are the potential consequences of cancelling my car insurance?

When you cancel your car insurance policy, you are essentially forfeiting the protection and coverage it provides. Unless you've switched to a new provider, this means that you'll be responsible for covering the cost of any accidents, damages or theft that occur to your vehicle out of your own pocket.

This may also impact your peace of mind when it comes to driving, knowing that you’ll have to pay for any damage to your vehicle or other people’s property yourself. Because of this, it’s important to weigh up the pros and cons of cancelling your car insurance before doing so, whether you’re looking to switch to another insurer or end your coverage altogether.

Are there any car insurance cancellation fees?

You may have to pay fees if you cancel your policy early, in other words, before the policy is due to end. These charges depend on the individual insurer: some have set cancellation or administration fees, while others have none at all. 

If you cancel when the policy is up for renewal or during your cooling-off period – usually between 14 and 30 days after taking out or renewing the policy – you’re unlikely to face any fees.

Will I get a refund if I cancel my car insurance?

As mentioned, if you cancel your car insurance during the cooling-off period, you should receive a full refund, unless you've made any claims. If you choose to cancel your policy and paid for the full 12 months in advance, you may be eligible for a refund of the unused portion of your premium. However, certain factors can affect the refund amount; for example, some insurance providers may have administrative costs or cancellation fees. Furthermore, if you pay your premium in instalments, you’ll likely have to repay any amount still owing to your car insurance company.  

To understand the refund process specific to your policy, you should review your policy documents or contact your insurance provider.

Do I need to cancel my policy to switch car insurance?

Switching your car insurance to a new policy is the main alternative to cancelling your coverage altogether. If you want to switch your insurance, you’ll need to cancel your existing policy. You can do this when your policy is coming up for renewal or at any other time, though keep in mind that you may incur fees for cancelling mid-policy. Before you cancel, you should sign up for a new policy and schedule your new cover to start the day your old policy ends so you can have uninterrupted coverage. You can then inform your existing insurer of your intent to cancel.

Frequently asked questions about cancelling car insurance

Can I update my car insurance policy with my current insurer rather than cancel it?

If you're happy with your car insurance but your circumstances have changed, you may be able to update your existing policy rather than cancel it. Before cancelling your policy, you should check with your insurer if it could be adjusted instead. For example, depending on the terms of your policy, you may be able to change the following without cancelling your policy:

  • The car listed on your policy
  • Your address
  • Listed drivers
  • Details about your car’s usage
  • Your optional extras
  • Your excess
Do I need to cancel my insurance after selling my car?

After you sell your car, you have two options: to transfer or cancel your car insurance.

If you’re immediately buying a replacement car, you may be able to update and transfer your car insurance to your new vehicle, though keep in mind that your premiums may change. If you aren't replacing your car, you should cancel your policy.

Note that you won’t generally be able to transfer a car insurance policy to someone else, as they will need to be assessed on their own risk. However, if you sell your car, CTP insurance will typically be transferred to the new owner.

Can my insurer cancel my car insurance policy?

In certain circumstances, your insurer can cancel or void your car insurance policy. This could be due to:  

  • Non-payment of premiums
  • Failure to disclose relevant information about your situation
  • Misrepresenting your situation
  • Making a fraudulent claim

 

If it does cancel your car insurance, your insurance company will send you a notice of cancellation and may refund the remainder of your premium. The specifics will be laid out in your policy’s Product Disclosure Statement (PDS).

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