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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
If you find your premium creeping up, it might be time to move on
Switching insurers can help you find better value and save money.
Comparing policies can unlock discounts and better benefits
Perks like emergency repairs can give you more bang for your buck.
A gap in cover could leave you unprotected when you need it most
Ensure your new policy kicks in before the old one ends.
Why switch car insurance?
First, let’s talk about why you might want to switch insurers. There could be a ton of different reasons why you might feel the need to switch insurers; for instance:
- Your circumstances have changed. Perhaps you’ve moved, bought a new car, added a driver, or retired. All these things could mean your current policy and insurer are no longer the best-value option.
- You’re eligible for other discounts. Based on your age and driving history, you may qualify for certain discounts with a different insurer.
- You want better value. Your current policy may have been a competitive option when you first took it out. But if its premium has been steadily increasing since then, it might be time to shop around.
- You’re paying more than you should. You’ve been claim-free for a year or more, but your good driving history isn’t being rewarded.
- You want better customer service. You’re experiencing poor communication with your insurer or difficulties when making a claim.
We can make it easy to check out what kinds of car insurance options are available. This can save you from sifting through numerous insurance providers’ websites. Time is precious, so let someone else do the heavy lifting!
How do I switch my car insurance?
Most of the time, making the switch is a pretty straightforward process. However, it’s a decision that requires a bit of thought – after all, you don’t want to end up with a new policy that’s worse value than your old one.
You’ll also want the transition between insurers to go smoothly. Fortunately, we’ve outlined a few steps below to make the process as easy as possible.
Step 1: Compare car insurance policies
Before jumping the gun and switching to the first provider you come across, you might want to consider all your options. Here are a few tips that can help you find your perfect match:
Compare like with like
Insurers offer different levels of cover, from the lowest level – compulsory third-party (CTP) insurance – to the bells and whistles – comprehensive insurance. You’ll usually want to compare the same types of cover to get a good sense of the value on offer, not just the price.
Search for discounts
Some insurers will offer discounts if you pay for the full year in advance, or buy a policy online.
Check out your benefits
Insurers want your business and they’re willing to throw in a few extra goodies to get it. This is particularly relevant when it comes to comprehensive car insurance, where some insurers can help cover the costs of essential repairs and emergency travel and accommodation. Others will even help cover the costs of theft or damage to a trailer attached to your car.
Be mindful of limits
Your new policy might be cheaper if it pays out less money for certain claims. This isn’t necessarily a bad thing, but you should consider whether it still covers all the expenses you actually need. This will also come down to your own preferences. For example, will $1,000 cover you if the items in your car are stolen, or do you get around with expensive tools or equipment that will cost more to replace?
Look for tailored policies
When you change insurers, you’ll want to look for policies that suit your particular circumstances. For instance, let’s say you don’t drive all that much, but need insurance. Some insurers offer ‘drive less pay less’ policies aimed at those who don’t drive their car too often, and these policies can come in a lot cheaper.
All these hacks can help you find a policy that offers the benefits you need – and hopefully throws in some discounts you weren’t getting from your old insurer.
Step 2: Make sure you have seamless cover
You probably don’t want a gap in your cover when you make the switch. Murphy’s Law means this is when you’d have an accident! That’s why it’s important to make sure your new policy comes into play as soon as your old policy ends. Even having some overlap might be better than driving uninsured!
The good news is that it isn’t too hard to avoid a gap in your cover. For example, if your current policy expires on 30 June at midnight, 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 vulnerable if something goes wrong. Plus, you might need insurance for things like purchase contracts, which often require proof of coverage.
Step 3: Sign up with your new insurer
After working out dates so you’re not left without cover, you can contact your new insurer and get onto your new policy before cancelling your current policy.
This process will be pretty similar to what you went through the first time you applied for car insurance. The insurer will need your personal information and a bunch of details about your car, including the model, registration number, and when it was manufactured.
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
Alrighty then! It looks like we’ve got an old policy to get rid of before wrapping everything up. Give your soon-to-be ex-insurer a call and get ready to say goodbye.
First off, you’ll want to see if you can get a pro-rata refund for the remaining days you have left on your paid premium. If you cancel your policy within your insurer’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.
Then, you’ll want to ask what your old insurer needs from you to cancel the policy. You might need to confirm your intentions in writing and jot down the date you want your policy to end. You might also need to complete a policy cancellation form.
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!
Helpful tip
Switching car insurance can be stressful, especially if you’re looking to sign up for a better deal at a better price. Saving it for the last moment is likely to put you in a proper pressure cooker situation. And you don’t want to cancel and end up in a prang without the right kind of car insurance!
That’s where a comparison service like iSelect can jump in and do the legwork for you, present you with options and make switching seem like the easiest, most stress-free thing you’ve done in a while! We’re all about saving time, effort and money, after all.
Adrian Bennett
General Manager for General Insurance
Frequently asked questions
Will I need to pay a cancellation fee if I switch car insurance?
If you’re looking to switch car insurance, you’ll need to cancel your current policy. Typically, you can expect to pay a cancellation fee of $40 to $50 if you cancel your policy outside its cooling-off period. On the other hand, some insurers may not bother charging cancellation fees.
The good news is, you may get a refund for the unused part of the policy you’ve paid for, excluding any government charges such as stamp duty and GST.
Can I transfer car insurance to another person?
Unfortunately, no. Once issued, a car insurance policy remains tied to both the policyholder and vehicle until it’s cancelled. It’s a two-for-one deal! So, the new owner of the vehicle 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.
Compulsory third-party (CTP) insurance is the only type of motor insurance you can transfer from one person to another person through a car sale.
Can I switch car insurance if I got it through a dealership?
Yes, you can. Car dealers may offer add-on car insurance, with its premiums included in a car loan. In many cases, add-on insurance is more expensive and can offer less value than a policy you can get from an insurer or a bank.
If you’ve got buyer’s remorse over car insurance you’ve purchased from the car dealer, there’s no need to fret. Just like regular car insurance, you can contact the insurer and cancel your add-on insurance at any time and switch to another policy.
Remember to read the product disclosure statement (PDS) for steps on how to cancel. Also, check whether you’re within the cooling-off period. If you are, you’ll 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.1For more information, see Moneysmart.gov.au – Add-on car insurance
Can I switch car insurance while I have an outstanding claim?
You’re allowed to cancel your policy at any time, even when you have a claim open with an insurer. That means you can switch to a new insurer and your previous one will still process the claim you made with them.
Keep in mind, though, that if you pay for your car insurance monthly, you might need to pay the rest of your annual premium before your claim is covered.
Where can I compare car insurance policies?
So hopefully you know a little bit more about how to go about switching car insurance providers. But maybe you’d still like a little extra help? Well, iSelect’s got you covered.
You can use the iSelect car comparison tool to compare policies from our range of providers and get an overview of the different benefits, prices, and cover levels on offer. It’s easy, it’s simple, and it can take a lot of legwork out of comparing policies. Feel free to use it and see if you can find a great deal!
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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