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Renewing Your Car Insurance
Renewing Your Car Insurance
Written by
Kervin Mathew
Edited by
Laura Crowden
Reviewed by
Adrian BennettCompare car insurance policies the easy way
Save time and effort by comparing a range of car insurance quotes with iSelect
When does my car insurance renew?
Long story short
Car insurance usually expires after 12 months
You’ll get a renewal notice about a couple of weeks in advance.
Your renewal notice gives you everything you need to make decision
It outlines your new premium cost, any policy changes and other details about your cover.
Renewal time is a smart time to compare your options
Plus, switching at renewal time can help avoid cancellation fees.
When does my car insurance renew?
Typically, a car insurance policy runs for 12 months before it comes up for renewal (and all too often, with a price hike!) Generally, around two weeks before your current policy term expires, your insurer will send you a renewal notice which outlines any changes that your insurer is making to your policy, including any increase to the price.
Receiving your renewal notice should prompt you to review your current policy, consider your personal circumstances and budget, and think about whether or not you’re still getting good value out of your car insurance.
After weighing up your options, you may choose to stick with your current policy as is, upgrade or downgrade your cover, or switch insurers altogether.
Letting your car insurance simply rollover for another term without giving it a second thought can certainly save you time and effort. What it won’t save you though is money, as you could end up paying more than you need to for your car insurance by simply sticking with your current policy.
How do I know when it’s time to renew my car insurance?
While there’s nothing stopping you from setting a personal reminder, insurers have to make sure you’re aware of when your car insurance is up for renewal.
Your insurer will review your current cover and recalculate your premium considering several factors. Then, around 14 days before your current term expires, you’ll likely get a renewal notice via email or post.
What’s included in my car insurance renewal notice?
The first question on your mind will probably be ‘how much has it gone up?’ Well, you’re likely to find the answer to that and much more on your renewal notice. It should include:
- the date your policy will be renewed
- the policy term (i.e. 12 months)
- any policy exclusions or limitations
- the excess you’ll pay towards a claim
- and finally, the big one – your new premium.
Another key part of your renewal notice is the actual coverage your insurer is offering you and if any changes have been made to it. This should be detailed in the product disclosure statement (PDS) that’s also included with your renewal notice.
Helpful tip
Whether it’s met with relief or disbelief, your car insurance renewal notice should be a reminder to compare your current policy with others in the market. True, it may sometimes seem like your insurer is giving you a great deal and it makes sense to stick with them. But you never know what else is out there and it certainly doesn’t hurt to look. Try comparing your options using iSelect’s comparison tool – maybe a pay as you drive policy might help you save more money, and your current insurer doesn’t offer one. Plus, switching at renewal time is one way to avoid pesky cancellation fees!
Adrian Bennett
General Manager for General Insurance
Why are car insurance premiums increasing every year?
Climate change, inflation, labour shortages and a decline in parts supply have all helped to brew up a perfect storm that’s pushed car insurance costs higher.
Between 2019 and 2024, the average cost of comprehensive car insurance rose by 42% from $739 to $1,052. That’s double the rate of inflation and in line with the climbing rate of claim costs which was (you guessed it) also 42% over the same period.1Insurance Council of Australia – Motor Insurance Policy Paper: A Roadmap for Reducing Rising Premiums p9, p12
What should I consider before renewing my car insurance?
Sure, it’s easier to just set up a direct debit and let your policy auto-renew. But before you lock in for another term with your insurer, consider your personal circumstances and think about whether or not you should simply auto-renew. It may seem like a tight rope to walk, but your intention with any car insurance policy you purchase should be to find the balance between pricing and value.
Don’t just auto-renew
Instead of waiting around for the last minute, start shopping around when you receive your renewal notice so you’ve got time to potentially find a deal that’s better suited to your needs and budget.
Increasing your excess
If you can afford it, opting for higher excess might help reduce your premium.
How much you drive
Going the extra mile not your style? A pay as you drive policy may offer a lower premium if you drive less than, say, 10,000 to 15,000 kilometres a year.
Who drives your car
Add younger drivers or others who drive your car regularly to your policy so you don’t have to pay a higher excess if they damage your car while they’re driving it.
Additional services or optional extras
Get more bang for your buck by adding extras like windscreen cover or other services like roadside assistance.
Changes to car finance
While paying off your car loan is liberating by itself, it may also free up your budget with lower insurance premiums.
How often you’d prefer to pay
You can pay your premium monthly if it helps with budgeting, but paying annually will generally mean lower premiums overall.
How do I renew my car insurance?
What typically kick-starts the renewal process is the renewal notice you’ll get from your insurer 14 days (or so) in advance with policy documents in tow.
- Pay attention to your renewal notice. Is your premium increasing, and if so, by how much? Is anything else changing? Look for changes to things like excesses, sum insured amounts or policy exclusions.
- Read over the product disclosure statement (PDS) and certificate of insurance. Make sure your cover still matches your current needs.
- Check if your payment details are up to date. You’ll want to avoid a potential lapse in cover due to a payment not going through.
If you’re still happy with your cover, you simply need to pay your new premium. But if you think you might be able to find better value, it’s time to shop around with a comparison service like iSelect.
Keep in mind that if you’ve set up a direct debit for your car insurance, then you might not have to do anything – your insurance will simply automatically roll-over for another term. But even if this is the case, your insurer will still have to notify you in advance of any premium or other changes by sending you a renewal notice (and you always have the option to cancel or switch at this point).
Frequently asked questions
What happens if I don’t renew my car insurance?
If you don’t renew your car insurance, you won’t be covered after your policy term expires. If luck isn’t on your side and your car gets damaged in a prang or by a freak weather incident, you might have to go out-of-pocket for repairs.
That said, if you pay for your insurance annually some insurers might grant you a grace period after your policy expires. During this time, you may still have the option to renew your policy.
How do I switch car insurance?
Switching is easy! It usually only takes minutes to cancel your policy and move on. You can do this online or over the phone. But it’s important that you do a bit of homework before you make the switch.
Take your time and weigh up your insurance options so you’re making an informed decision. Ideally, you should have a quote from your preferred insurer before you bid your current one farewell.
Your insurer might charge you a cancellation fee or ask you to pay any outstanding premiums if you switch to another insurer before your policy term wraps up. This is what makes renewal time is such a good time to switch it up!
How do I renew my car insurance if I pay my premium monthly?
Car insurance typically works in 12-month terms whether you pay annually, monthly or fortnightly.
When it comes to renewing a pay-by-the-month policy, there’s not much of a difference.
- Your insurer will send you a renewal notice around 14 days before your policy expires. Take this time to review the offer and shop around for better policies.
- If you’re happy with the new policy, and you’ve set up a direct debit for premium payments, you can sit back and let your cover renew automatically.
Car insurance up for renewal?
Then it might be a good time to hit ‘refresh’ on your search for car insurance and potentially unlock better policies along with some serious savings to boot! Get started with iSelect’s car insurance comparison tool to explore policies from our range of providers.
Get started on comparing car insurance policies!
Save time and effort by comparing a range of car insurance quotes with iSelect
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