So, you bought some car insurance, and now you have buyer’s remorse.
Maybe you hastily bought a policy from a dealership so you could get your new wheels on the road faster. Perhaps you renewed your current policy only to spot a better deal the next day.
If you’re experiencing regret, take a deep breath. You aren’t locked in just yet. In Australia, car insurance policies typically come with a built-in safety net specifically designed for moments just like this – the cooling-off period.1
But what is a cooling-off period? How long does it last? And can you get a refund or make a claim during that time? In this article, we take a look at all of this and more to help you get across everything you need to know about car insurance cooling-off periods in Australia.
What is a cooling-off period for car insurance?
The definition of a “cooling-off period” is a set time after the purchase of a good or service during which a consumer is allowed to cancel the contract due to a change of mind.2
In the insurance world, a cooling-off period is an important legal consumer protection. Enshrined under Australian consumer law, it gives you as the buyer a valuable opportunity to consider whether the policy you purchased is really a good fit for your needs and budget, and allows you to cancel your cover for a full refund without incurring any financial penalty.1
Cooling-off periods have largely replaced the old cover note system.1 Prevalent in Australia in the pre-digital era, cover notes were temporary, short-term car insurance policies designed to provide cover for people who were in the process of buying a formal policy. Free cover note insurance is no longer available in Australia.1
How long is a cooling-off period for car insurance?
For most general insurance products, the minimum cooling-off period is 14 days.3 While the exact cooling-off period for your car insurance will depend on your insurance provider, it will typically be from 14 to 21 days.1
Want to find out more? You’ll generally find information about your cooling-off period in your insurance contract2 or your policy’s product disclosure statement (PDS).1
Can you make a claim during a cooling-off period?
Yes, you can make a claim on your new car insurance policy while it’s still in the cooling-off period.1 However, there are some important things to know before you do.
Firstly, if you do make a claim, you can still opt to cancel your car insurance during the cooling-off period. However, you may not be eligible for a full refund of your premium.1
Secondly, it’s good to note that there may be some things you can’t claim right away. For example, many insurers – including Youi – apply exclusion periods for claims relating to certain natural disasters, such as storms, floods, bushfires and hail.4
How do I cancel my car insurance during a cooling-off period?
So, you’ve made the call – you no longer want your new car insurance policy. What do you do next?
Here’s a simple, step-by-step guide.
- Step 1: Check your policy documents –The PDS should contain information about your cooling-off period and how to cancel your policy.1
- Step 2: Line up an alternative – If you don’t want to leave your car uninsured, it might be a good idea to make the switch to a new policy before you cancel your old one, aligning the new policy’s start date with the cancellation date of the existing one.5
- Step 3: Contact the insurer – Depending on your insurance provider, you may be able to cancel your policy by email or online, or by contacting them directly by phone.5 If you cancel within the cooling-off period, you may be entitled to a full refund, but the amount can depend on your insurer’s terms, including whether you’ve made a claim or whether any administration charges apply.1
- Step 4: Claim your refund – Keep in mind, there may be a delay before you receive your funds back in your account.1
Your insurer should provide you with written confirmation of your car insurance cancellation.5
Do I get my money back when I cancel car insurance?
As long as you cancel before the end of your cooling-off period, and you haven’t made a claim, you should be able to get a refund for the entire amount you paid.5
You can still cancel your policy during the cooling-off period if you have made a claim, but you may not be entitled to a full refund of premium.1
Is a cooling-off period different from a used car cooling-off period?
Yes, it is. Insurance cooling-off periods are governed by the Australian Consumer Law.1 On the other hand, cooling-off periods for used car purchases are not – they’re overseen by each state and territory, and not every part of Australia has them in place to protect used car buyers.6
In fact, only New South Wales, Queensland, South Australia and Victoria apply cooling-off periods for used cars purchased from authorised dealerships. No part of Australia applies cooling-off periods for used cars bought via private sale.7
What happens if I cancel my policy after the cooling-off period?
When the cooling-off period ends, you can still cancel or change your car insurance provider – in fact, you can do this at any point. However, you probably won’t get a full refund if you cancel part-way through your policy.5
Instead, you may be refunded the unused portion of your premium. You may also have to pay a cancellation fee, which Canstar estimates is typically about $40.5
How car insurance cooling-off periods work at Youi
So, you’ve taken out a Comprehensive, Third Party Fire & Theft or Third Party Property Only insurance policy with Youi, but now you’re not so sure it’s for you. Here’s what to know about cooling-off periods at Youi.
How long is Youi’s cooling-off period for car insurance?
“At Youi, we want you to have enough time to make sure our policies are a good fit. That’s why our cooling-off period is 20 days,” explains Marni Jackson, Youi’s Head of Product – Vehicle and Lifestyle.
Youi’s 20-day cooling-off period begins on the date you start or renew your policy.8
Can I make a car insurance claim with Youi during my cooling-off period?
Hit a parked car the day after you took out your policy? That’s no fun, but don’t sweat it – in many cases, you may be able to make a claim with Youi, even if your car insurance cooling-off period is still active.
“However, it’s good to keep in mind that for certain insured events where a waiting period applies, you may not be able to make claims right away,” notes Jackson.
“For example, Youi applies a 72-hour waiting period to claims relating to storms, hail, floods and bushfires. There is no cover for these events during the first 72 hours of your policy first being purchased unless you had another policy that expired immediately before the start of your policy with us and there was no break or change in the level or type of cover, or you bought the car on the same day your policy with us started.”4
How can I cancel my Youi car insurance?
You can cancel your Youi car insurance over the phone by calling us on 13 YOUI (13 9684). Alternatively, you can submit a cancellation request online by logging into your account on our website.
If you cancel online, we may give you a call to confirm your cancellation request.
Will I get a full refund if I cancel my Youi car insurance within the cooling-off period?
“If you decide you no longer want your Youi car insurance policy during the cooling-off period and you haven’t made a claim, we’ll refund your premium payment in full,” Jackson says.
“We’ll also waive our standard $30 cancellation fee.”
If you have made a claim or the cooling-off period has passed, Youi may offer you a refund of the unused pro-rata portion of your premium, unless we’ve agreed to a total loss claim. In these cases, the $30 cancellation fee will apply, and Youi will deduct it automatically from any applicable refund before it’s processed.8
Can I change policies with the same insurer during my cooling-off period?
You don’t necessarily have to go through the hassle of finding a new insurer just because you’re not sold on your new policy.
“If you’re happy with Youi but, on reflection, you think a different level of cover might be a better fit, you can always request to adjust, upgrade or add to your cover during the cooling-off period, or at any other time,” says Jackson.
“For example, if you decide you no longer want optional cover for business items or tools that you routinely transport in your car, we can remove that from your policy. Or, if you purchased third party car insurance but now feel that you want more cover, we can help you switch policies to something more extensive, such as our Comprehensive car insurance.”
Simply get in touch on 13 YOUI (13 9684) and the friendly Youi team can help you get sorted.
So, you’re not necessarily locked into a policy just because you signed up and paid the premium. Thanks to your car insurance cooling-off period, you can take a little extra time to explore your new cover and make sure it’s a good fit for your needs and lifestyle.
Experiencing buyer’s remorse or just want to see how we compare? Consider checking out Youi’s car insurance cover options to see if one is the right fit for you, or start a quote today.
1Source: Canstar – Car insurance cover notes, April 2025
2Source: Moneysmart – Cooling-off period, August 2019
3Source: Insurance Council of Australia – ABC’s of General Insurance, n.d.
4Exclusions and limits may apply. Where you have increased your cover or reduced your excess within 72 hours of a flood, storm, hail or bushfire occurring, cover will be limited to the amount that was effective prior to the change. Loss, damage or legal liability caused by, resulting or arising from flood, storm, hail or bushfire during the first 72 hours of your policy first being purchased is excluded unless certain conditions apply. For full details, see the PDS, TMD and your policy schedule.
5Source: Canstar – How to change car insurance provider?, January 2025
6Source: Australian Competition & Consumer Commission – New and second-hand cars, n.d.
7Source: carsales – Is there a cooling-off period when buying a used car?, March 2024
8Exclusions, limits and additional fees may apply. See the Car Insurance PDS for full details.
