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How to switch car insurance
How to switch car insurance
Written by
Kervin Mathew
Edited by
Ellie Garran
Reviewed by
Adrian BennettCompare car insurance policies the easy way
Save time and effort by comparing a range of car insurance quotes with iSelect
Long story short
Switching insurers can help you find better value and possibly save money
If your premium has increased or you’ve changed address, it might be time to switch to another policy.
Comparing policies could unlock better benefits
Sticking with the same policy means you could be missing out on limited offers.
A gap in cover could leave you unprotected when you need it most
If you’re switching policies, ensure your new policy kicks in before the old one ends.
Why switch car insurance?
Switching car insurance policies can be a great way to find a policy with a lower premium or coverage that suits changes in your driving habits or lifestyle. If you shop around before you switch (iSelect can help you with that), you could potentially find new-customer discounts or policies with better features and customer service. And if you’ve moved to an area with a higher risk of car thefts or extreme weather events, it’s worth switching to a policy that actually covers those events.
There could be a ton of reasons why you might want to switch policies. Here are some of them:
- Your circumstances have changed: Perhaps you’ve moved, bought a new car, added a young driver or retired. That means your current policy and insurer may no longer be a great option.
- You want more coverage: Your current policy may have been a competitive option when you first took it out. But if it doesn’t provide the kind of cover you’re after, it might be time to shop around.
- You’re eligible for reduced premium offers: Some insurers offer reduced costs and savings when switching or purchasing a policy online.
- You want to shake off the ‘loyalty tax’: You’ve been claim-free for a year or more, but your good driving history isn’t being rewarded with lower premiums.
- You want better customer service: You’ve experienced poor communication with your insurance company or difficulties when making a car insurance claim.
Before you switch to a new policy, it’s important to read through the policy terms and conditions to understand whether it will cover you when you need it. Keep an eye out for exclusions, limitations and conditions of cover, so you’re clear what’s covered and what isn’t.
Helpful tip
Whether it’s close to renewal time or your current policy’s costs or coverage just don’t cut it, the decision to switch car insurance can be straightforward and sometimes a no-brainer. But it’s important to think through things to help ensure that the switch is done right or that you’re switching to a great policy. For example, starting your new policy on the day your previous one ends can help avoid a gap in cover and making sure your new policy is not just cheaper but also doesn’t leave you underinsured.
Adrian Bennett
General Manager for General Insurance
How do I switch my car insurance?
To switch car insurance, it’s a good idea to start by comparing policies for coverage, features and discounts. If you find a better deal, ensure there’s no gap in cover between the time you cancel your existing policy and switch to a new one. When you cancel your policy, check if you’ll need to pay any cancellation fees or outstanding premiums that may apply.
Step 1: Compare car insurance policies
Before switching to another policy, it’s worth weighing up similar car insurance options from other providers for discounts, benefits, cover limits or customisable options.
Here are a few tips that can help you find a policy that suits your budget.
Compare like with like
Insurers offer different levels of cover, from third-party property to comprehensive cover. It’s a good idea to compare the same types of car insurance policies to get a good sense of the value on offer, not just the price. That’s because a basic third-party policy, though cheaper, generally only covers third-party property damage (that’s other people’s property) and not accidental damage to your own car.
Search for premium discounts
Some insurers offer lower car insurance premiums if you pay for your policy up-front instead of in monthly or fortnightly instalments. You could also get discounts if you buy a policy online. Bear in mind, you can also lower your premium by choosing a higher excess, but this option may only be available with a comprehensive car insurance policy.
Compare benefits and features
Some insurance policies offer additional features such as new-for-old car replacement or the choice of agreed value or market value cover, which may be useful if you’ve bought a brand-new car. Other benefits could include a hire car after an at-fault accident or cover for emergency travel and accommodation, which may be helpful for avid road-trippers.
Be mindful of limits
Cheaper policies often pay out less money for certain types of claims. This isn’t necessarily a bad thing, but you should consider whether a policy still covers all the expenses you might actually need. This will also come down to your own preferences. For example, ask yourself if $500 is enough to cover the theft of items in your car, or whether you’d prefer a policy that offers more personal effects cover.
Look for tailored policies
When you change insurers, you’ll want to look for policies that suit your particular circumstances. For example, if you don’t drive all that much, a pay as you drive policy may be a cheaper option. Likewise, reduced windscreen or window glass excess or choice of repairer could some be other optional extras you could dip into. While some insurers offer roadside assistance as a standard policy feature, others may give you the option to purchase it separately, which could help lower your premium.
Step 2: Make sure you have continuous cover
Ideally, you should avoid a gap in your cover when you make the switch. For example, if your current policy expires on 30 June, you’ll want to activate your new policy on or before that date. Otherwise, you could find yourself in an insurance black hole, leaving you financially accountable if something goes wrong. So, make sure your new policy starts as soon as your old policy ends – even some overlap in cover is better than driving uninsured.
Step 3: Sign up with your new insurer
Contact your new insurer or get online and sign up for your new policy before cancelling your current policy – after working out dates so you’re not driving without car insurance. This process will be similar to what you went through the previous times you signed up for car insurance. The insurer will usually ask for your personal information and your car’s details, including the registration number, colour, whether it has any modifications and other similar details. Most insurers will also let you choose the day your new policy begins, so you may want to consider coordinating this date with the end of your old policy.
Step 4: Cancel your old policy
To cancel your previous policy, you’ll need to let your insurer know either by phone or online. When you’re cancelling, make sure you receive any refunds for the remaining days you have left on your paid premium. Then, ask what your previous insurer needs from you to cancel the policy. You might need to confirm your request in writing and jot down the date you want your policy to end. You might also need to complete a policy cancellation form.
If you happen to cancel your policy within your policy’s cooling-off period, which often ranges from 14 to 30 days since you bought the policy, and you haven’t made any claims, you might also be eligible for a full refund. Just to make sure your insurer does their part too, you may consider asking for written proof of cancellation for your records. After all, it never hurts to have a paper trail!
Frequently asked questions
Will I need to pay a cancellation fee if I switch car insurance?
Maybe. You may need to pay a cancellation fee if you cancel your policy, depending on your insurer and when you cancel. Some insurers may charge a cancellation fee if you cancel outside the cooling-off period. For example, cancellation fees of around $40 to $50 may apply, although the amount varies between insurers and some may not charge a fee at all.
The good news is, you may be entitled toa refund for the unused part of the policy premium. However, the amount refunded can vary depending on your insurer, any applicable fees and charges, and whether you’ve made a claim during the policy period.
Can I transfer car insurance to another person?
No, you can’t transfer car insurance to another person. Once issued, a car insurance policy remains tied to both the policyholder and vehicle until it’s cancelled. So, if you’re selling a car, the vehicle’s new owner will have to get a policy of their own.
That said, you may be able to transfer your car insurance to another car, say a new car you bought to replace the old one. In Australia, only compulsory third-party insurance (Green Slip if you’re in New South Wales) can be transferred from one person to another through a car sale.
Can I switch car insurance if I got it through a dealership?
Yes, you can contact the insurance provider and cancel your insurance at any time and switch to another policy. Remember to read through the policy details in the Product Disclosure Statement for steps on how to cancel. Also, check whether you’re within the policy’s cooling-off period – if you are, you should be able to get a full refund. If not, you may need to pay a cancellation fee, but you can still get a partial refund.
Can I switch car insurance while I have an outstanding claim?
Yes, you’re allowed to cancel your existing policy at any time and switch to new one, even if you have an open claim with the car insurance provider. Your previous insurer will still process the claim you made.
Keep in mind, though, that 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.
Where can I compare and switch car insurance policies?
You can get on the iSelect online comparison tool to compare car insurance quotes from our range of car insurance brands and get an overview of the different benefits, prices, and cover levels on offer. It’s easy, simple and helps take the legwork out of comparing policies from multiple providers.
And now that you’re more clued in on switching car insurance as well as its potential benefits, get to comparing and see if you can save on car insurance costs with iSelect.
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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