How to switch car insurance
Expert tips on switching car insurance
Our car insurance expert, Adrian Taylor, has these top tips for drivers looking to switch their car insurance.
Adrian Taylor
Executive General Manager – General Insurance
Check for any cancellation fees
If you’ve paid your premium in full upfront and haven’t made any claims, you’ll likely receive a pro-rata refund for the unused portion of that premium when you switch. However, depending on your insurer, cancellation fees may apply, so it’s a good idea to check what these are before you decide to switch.
Compare like-for-like policies
That means you factor in the same type of cover, excess, benefits and exclusions for the same car and the same listed drivers as your previous policy (unless your circumstances have changed). This ensures that the policies can be accurately compared and you can make an informed decision on the best one for you.
Stay on top of your discounts
Many car insurance providers offer a discount if you purchase online, but this often only applies to your first year of premiums. After this, your premiums might increase, which is why it’s worth considering comparing and getting car insurance quotes at least once a year.
Why switch car insurers at all?
Some reasons why Australians may switch to a new car insurance policy include:
- To save money and find a better deal. If your car insurance premiums will increase after renewal or you’ve had the same cover for a few years, chances are there might be a better out there. Consider reviewing your policy every year to make sure you’re still getting value for money.
- Your discounts have expired. A lot of discounts expire after a certain point of time, which is another reason why it’s worth reviewing your policy annually. By switching, you could enjoy discounts with a new policy.
- To only pay for what you need. If there are optional extras you don’t need on your policy or you no longer require the level of cover you currently have, you might consider switching to a policy that better matches your needs.
- Your situation has changed. You may need to update your policy if you move address, add another driver to your cover or park your car in a different spot. Your current policy might not be the most suitable for these changing circumstances, so it could be a good time to shop around and switch car insurance.
Always check the benefit limits, exclusions and all other policy details in the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you switch car insurance.
The basics of switching car insurance
When changing car insurance companies, can I do it before the renewal date?
Yes, you can change your insurance before renewal time, or even before you’ve completed the current pay cycle. If you cancel outside these times and you haven’t previously claimed on your policy, most insurers should provide you with a pro rata refund for the cover you haven’t used.
For example, if you’ve paid annually but cancel your policy eight months into your cover, your insurer should refund you for the remaining four months of cover. However, this typically only applies if no claims have been made, and your insurer may also charge a cancellation fee if you cancel outside of the cooling-off period.
Check the PDS for more information on your insurer’s cancellation terms and conditions.
How can I lower my car insurance premium?
Whether or not you decide to switch policies, there are still some ways to reduce your insurance costs, such as:
- Choosing a higher excess to lower your premium. Just keep in mind that if you do need to claim, you’ll have to pay a higher excess amount, which in turn reduces your claim payout.
- Paying an annual premium instead of monthly instalments. You’ll have a higher upfront cost, but monthly instalments generally cost more in the long run.
- Setting an age limit restriction for who can drive your car. Younger drivers tend to be riskier to insure, so if you don’t any driving your vehicle, having an age restriction on your policy could work favourably for your premium. Just keep in mind that, if anyone younger than your age restriction drives your car, they might not be covered by your policy.
Learn more about reducing your car insurance premiums.
How long does it take to switch car insurance?
You can typically cancel your policy and switch to another on the same day. After signing up to new policy, your old policy can be cancelled with a quick phone call to your previous insurer. If you cancel your old policy before purchasing a new one, your vehicle won’t be covered until you purchase your new policy.
Another thing to keep in mind is the cooling-off period, which starts when you complete your purchase or when your policy commences. It’s usually 14 to 21 days, and during this time you can cancel your cover for a full refund provided no claim has been made. If you cancel your policy outside of this cooling-off period, your insurer may charge a cancellation fee.
What’s the best car insurance policy to switch to?
There’s no single car insurance policy that’s best for everyone because everyone’s circumstances and insurance needs are different. You might want a comprehensive car insurance policy with roadside assistance and other benefits included, or maybe just a Third Party Property Damage policy for basic cover. So, the best policy for your situation will be one that meets the level of cover you want, at a price that works for you.
Your existing policy
How do I transfer my current insurance to a new car?
Usually, you can either call your insurance provider or update your current policy details online to let them know of your new car purchase. Your insurer will then process the details of your new vehicle and inform you of your updated premium, or cancel your old policy and start a new one for your new car.
If I switch to a new policy, will I keep any loyalty discounts from my old insurance provider?
Discounts from your current policy may not carry over to your new policy. However, some insurance companies will honour any no claim discounts (NCD) you have, provided you meet certain terms and conditions when you switch.
I got car insurance through a dealership as part of a car loan. Can I still switch policies?
You can choose your preferred insurance company at the time or switch car insurance later. Just keep in mind that car loan lenders (or financiers) typically require a Certificate of Currency, or proof of insurance, before they will approve an application for finance.
When switching, make sure you provide the financier of your car with a Certificate of Currency of your new policy, so you continue to meet the terms and conditions of your loan.
Can I switch car insurance providers while I still have an outstanding claim?
Yes, you can switch insurers while you have an insurance claim in progress. Your old insurance provider will process your claim as normal, so long as the incident you’re claiming for occurred while you had cover.
If you switch while claiming for a total loss on your car (i.e. a write-off) and you’re paying in monthly instalments, your insurance provider may deduct the outstanding monthly payments for the period of cover from your insurance payout.
How do I cancel my car insurance policy?
Typically, you can call your insurance provider, and they can help you with your request. However, this process may vary depending on your insurer. Always read the PDS of your policy for the most accurate information on how to cancel your car insurance.
Steps for how to change your car insurance
Step 1: Find and sign up for a new policy
Once you find a policy you like, simply sign up with your details. Make sure your new policy becomes active from the time your old one expires so that you’re always covered. You can compare policies in just minutes through our car insurance comparison service.
Step 2: Cancel your existing car insurance policy
Once you’ve signed up with a new insurer, you need to contact your previous one to cancel your existing policy. You may choose a date in the future for your existing policy’s cancellation to take effect so that it aligns with the end of your policy term or the current payment cycle. That way, you can exhaust the remaining cover you’ve already paid for.
Meet our car insurance expert, Adrian Taylor
As a General Insurance expert with over 13 years’ experience in financial services, Adrian Taylor is passionate about demystifying car insurance for consumers, so they have a better understanding of what they’re covered for. Adrian’s goal is to make more information available from more insurers, to make it easier to compare and save.