Mozo guides

How to switch car insurance policies

Here at Mozo, we’re all about helping everyday Aussies find the perfect car insurance policy. But if it’s been a while since you last reviewed your car insurance policy and insurance provider, there’s a good chance of a better deal out there. And depending on your situation, switching policies could save you big bucks and deliver even bigger value.  

So whether you’re on the fence about switching or are ready to find a new, better value policy, we’ve got the need to knows when it comes to switching car insurance policies.

Why would I consider switching car insurance policies?

Let’s face it, times change and so do our needs. But aside from wanting better value from your car insurance policy, some of the most common motivations for switching are:

  • A change of circumstance - We all know that the premium we pay is dependant on a number of factors including our age, the type of car we drive and even where we live. If any of these factors have changed recently, then it might be time to get onto a policy that best reflects this. For example, if you’ve had a birthday and you’re now over 25 you could get a cheaper policy because you no longer having to pay a young drivers excess.
  • Eligible for other discounts - Within the time you’ve had your current policy, you may have become eligible for discounts your existing insurance policy doesn’t include. These can range from multi-policy discounts to one off freebies like cash back that often come when you take out a new policy.
  • Unhappy with current customer service - This could refer to a complicated claims process or experiencing poor customer service in the past.
  • Paying more than necessary - And finally, one of the biggest motivations to switch policies is to save money. So if you’re thinking of switching policies, shop around and obtain a minimum of three quotes to compare against your current policy premium.

Do I have to wait until my renewal date to switch?

No, if for any reason you need to cancel your policy you can. You don’t have to wait until the renewal date. Even if you have paid your annual premium in full upfront you can still switch providers or cancel your policy.  But depending on your insurance company, you might have to pay some administrative fees.

How do I switch car insurance providers?

If you are thinking of making the switch to another car insurance provider, there are three steps you’ll need to take before you can walk away with a brand new car insurance policy.

Step One: Compare other car insurance policies online

Whether you’re after a higher level of cover or want to cut the cost of your premium, you’re going to have to do some shopping around. Our car insurance comparison tool makes it easier to compare different policies online, helping you find a policy that’s right for you. Once you start shopping around, some of the features you might want to compare include:

  • The premium - Possibly the most important feature drivers compare in a car insurance policy is the premium. And although being able to pay your premium monthly at no extra cost won’t necessarily save you money, it can be easier on the wallet than one lump sum payment.
  • Your choice of excess - Having a range of excess options can help lower your upfront premium, but you’ll need to pick an amount you’re comfortable paying if you ever had to make a claim.
  • Optional extras - There’s no point in paying top dollar for a policy that doesn’t even cover the things you really need. So instead, you might be better off getting onto a low cost policy and adding on the extras you want covered.  
  • Other perks - And with a comprehensive car insurance policy, there are a few other perks you might want to consider. This could include things like roadside assistance, hire car cover and the option to remove the excess on windscreen claims for an extra premium.

Step Two: Take out your new policy

If you find a better deal at a cheaper price, obtain a quote to show your existing insurance provider to see if they are willing to price match. If they’re not willing to match the quote or offer an even better discount, then get ready to switch providers.

When switching insurance companies, you want to make sure that you don’t have any insurance gap between the time you get the new policy and cancel the old one.

Make sure that you have a copy of the new policy in writing confirming the date of covering before you move onto the next step which is...

Step Three: Cancelling your current car insurance policy  

After you’ve got your new policy sorted, you’ll need to let your old insurance provider that you’re cancelling your car insurance policy. They will then cancel your cover and provide a full refund of any unused premiums. Keep in mind that it could take several weeks for you to receive this refund, so you may not be able to use it to pay for the premium on your new policy.

Another thing to remember is that you might need to pay a cancellation fee, which depending on your current insurance provider, could be up to $40.

Ceyda Erem
Ceyda Erem
Money writer

Ceyda Erem is Mozo’s authority on Energy, as well as having broader expertise as a personal finance writer. She loves to put her researching and writing talents into stories that help our readers to make more informed financial choices, whether that’s about finding the best energy deal or writing about the latest sneaky bank tricks. Ceyda has a Bachelor of Arts (major in writing) from Macquarie University.