What Is a Car Insurance Cooling-Off Period?

Changed your mind after taking out a new car insurance policy? Learn about the cooling-off period with Savvy’s useful guide.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on February 16th, 2024       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Car Insurance Banner - Couple looking at their laptop after purchasing car insurance

When it comes to car insurance, it's not always possible to know exactly what you’re getting before you take out your plan. Fortunately, car insurance policies in Australia come with a cooling-off period in case you change your mind.

In this handy guide, we delve into the concept of the cooling-off period, examining what it is, why it is important and what to do when it ends.

What is a cooling-off period in car insurance?

The car insurance cooling-off period is the period just after you buy an insurance policy, usually between 14 and 30 days after purchasing your plan. This grace period applies regardless of the type of policy you have taken out, whether it’s third party or comprehensive coverage. During this time, your car is fully covered, but you have the option to change your mind and cancel the policy without penalties or charges. If you do cancel during this period and haven't made a claim, you’ll usually get a full refund of your premium. However, it’s important to read your policy documents carefully to understand the specific terms and conditions of your car insurance contract, as details may vary from provider to provider.

Why is the cooling-off period important?

The cooling-off period provides a safety net for car owners, allowing them to test out the policy and make changes or switch car insurance if necessary to ensure they have the coverage they need. It also offers:

  • Protection against impulse buys: choosing your car insurance policy may have been a rash decision but the cooling-off period allows you to reevaluate your choices.
  • Flexibility: if you discover a more suitable insurance option or find a better deal from another provider, you have the freedom to switch policies.
  • Peace of mind: you can take car insurance out with confidence, knowing that you have a window of opportunity to change your mind.

What if I change my mind after the cooling-off period ends?

If you become unhappy with your policy after the cooling-off period, you are entitled to cancel it at any time. However, you may face cancellation fees or other costs if you decide to switch or cancel the policy mid-term, though you may be eligible for a refund of the unused portion of your premium.

Alternatively, you might have the opportunity to make changes to your existing plan during the policy term, such as adjusting the coverage level or excess amount, depending on the policy terms.

You can also start looking for other car insurance options as the renewal date approaches. Take this time to compare different insurance providers, coverage options and prices. If you find a better policy that fits your needs, you can switch to the new provider when your current policy expires without facing any penalties or fees.  

Whether you are cancelling your car policy during the cooling-off period or at a later date, it’s essential to have car insurance coverage in place if you are going to be driving in Australia. You can easily compare and switch car insurance policies online to ensure there are no coverage gaps and you stay protected on the road.

Helpful guides on car insurance

Car Insurance Banner - A couple signing documents to purchase a new car and transfer their car insurance.

Car Insurance Transfer

Find out more about transferring your car insurance and when you may be able to do so in Savvy’s handy...

Car Insurance Banner - Young couple looking at car insurance documents, including their certificate of currency.

Certificate of Currency

Learn about what a certificate of currency is when it comes to your car insurance policy in Savvy’s guide. Are...

Car Insurance Banner - An exterior view of cars driving on a highway.

Unregistered Car Insurance

Find out whether you can cover your unregistered vehicle through Savvy’s informative guide today. Are you looking for insurance coverage...

Compare car insurance policies with Compare the Market

Savvy is partnered with Compare the Market to help you compare a range of car insurance policies from a panel of trusted providers.

Explore car insurance options by make

Select your car make and find out how much it may cost to insure, read helpful guides and compare quotes.


Savvy (ABN 78 660 493 194, ACR 541 339) provides readers with a variety of car insurance policies to compare. Savvy earns a commission from our partnered insurers each time a customer buys a car insurance policy via our website. All purchases are conducted via our partners’ websites. The integrity of our comparison service is unaffected by our partnerships with those businesses and our effort remains to bring further brands that do not already use our comparison service onboard.

Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.

Car Insurance Banner - Couple looking at their laptop after purchasing car insurance

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy Agency Owner and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.