Can I get a refund on car insurance?

If you initiated the process of cancelling your car insurance, then you may be able to get most, if not all, of your unused amount back. There might be some cancellation fees involved.

There are several reasons why you may choose to cancel an insurance policy early. Maybe you’ve sold your car, or you’re just not driving it anymore and feel it’s no longer worth insuring (beyond the mandatory CTP insurance required for the vehicle’s registration). Perhaps you found a better deal on car insurance elsewhere and would rather switch insurers now rather than wait for your policy to reach its renewal date.  

Keep in mind that you aren’t required to cancel your insurer if you sell one car and buy another - it may be possible to transfer your car insurance policy to a similar new vehicle. 

If your insurer cancels your policy, such as if you default on a payment, misrepresent your situation or make a fraudulent claim, then the remainder of your premium could still potentially be refunded to you. 

However, if you engage in dangerous or illegal activities with your vehicle, the insurer could void your policy, making it so it effectively never existed, so you would receive no refunds. Check with your insurer to learn more about the exact circumstances that could lead them to cancel or void your car insurance policy.

To cancel your car insurance, simply contact your insurer and tell them that you want to cancel your policy as of a specific date. 

If you pay your car insurance monthly or fortnightly, your future payments will simply stop from the policy’s cancellation date. Keep in mind that you may still need to pay any premium still owing at the time of cancellation.

However, many car insurance policies are paid upfront for the year, as some companies offer discounts. If this is the case, get in touch with your insurer about getting a refund for the unused amount.

If your insurer cancels your policy, they are required to give you written notice in advance.

The refund amount you may receive will likely be based on how long was left to run on your car insurance policy, whether or not you’ve made any claims, and any fees or other charges that may apply.

Compulsory Third Party (CTP) insurance is linked to a vehicle and its registration, not to an individual. When you sell your car, the CTP policy goes with it, so no refund applies.

If a car is written off after an accident or a theft with CTP remaining, you may be able to claim a partial CTP refund. This will require you to notify the motoring authority in your state or territory to cancel your vehicle’s registration. Based on the date of the cancellation, the insurer can calculate what refund may apply, minus any admin fees.