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Can I change my car insurance to another car?

Can I change my car insurance to another car?

Switching car insurance mid policy is not uncommon, and you may have a variety of reasons for doing so. For instance, you could be buying a new car and selling the old one, or you could be upgrading to a comprehensive car insurance policy from, say, third-party property damage insurance.

Most Australian insurers will allow switching cars on insurance policies or enhancing your existing policy. However, you might want to compare car insurance quotes to make sure you get the most affordable rate for the desired car insurance policy. 

How to switch car insurance to a new car?

When you buy a new car, you may need to buy a compulsory third-party (CTP) insurance policy before you can register the vehicle. If you’re switching an existing policy which also includes CTP coverage, consider talking to your insurer about how to change the car covered by your policy in the shortest time possible. This can help ensure that your new car’s insurance policy, and possibly the registration, become active sooner, allowing you to drive the vehicle without any risk of being uninsured. Depending on the premium for each of your cars, you may need to check what switching cars on insurance may cost you.

When changing insurance to a new car, you should remember that car insurance for the two vehicles may not cost the same. You may also want to purchase a different type of policy, or include additional coverage for the new car, which your insurer may offer, but at a significantly higher cost. In such a case, you may want to see if another insurance provider will offer you a more reasonable rate, and also check back with your insurer if they will match this rate. 

Does changing car insurance affect my credit score?

In Australia, insurance providers do not usually look at your credit score when offering you a policy quote, so buying or changing car insurance is unlikely to affect your credit rating. If you’ve taken a car loan, that might affect your credit score. 

However, switching car insurance after an accident or changing car insurance before renewal may impact the premium you pay for the policy. While insurance providers may not check your credit scores, they can access your claims history, which means changing insurers doesn’t necessarily give you a fresh start. On the contrary, if insurers find out at a later date that you have not disclosed your involvement in past accidents, they may deny your insurance claim.

Should I change car insurance every year?

You can certainly consider changing car insurance before renewing your current policy if you find a more suitable or affordable policy offered by another insurer. At the very least, you can compare car insurance quotes online around the time your policy is due for renewal if you feel you are paying a higher expected premium.

Even if you don’t switch to another insurer, you can use the information regarding the more affordable quote to ask your insurance provider to lower the premium for your policy. You can also adopt a similar approach if you have coverage-related issues with your policy rather than the cost of the policy. 

Sometimes, you may consider changing your car insurance policy mid-year if there’s a change in your circumstances, such as shifting to a new home or buying a new car. You may also want to update your coverage if you think your neighbourhood is likely to be hit by stronger storms, or if vandalism is on the rise. For instance, you may have bought a third-party fire and theft insurance policy, but now feel that you’d that a comprehensive car insurance policy will suit you better.

Before you ask your insurer to upgrade your policy, consider checking other insurers’ quotes for such a policy. 

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This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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