Insurance refund after selling your car: how much you get back
Published · Updated · 4 min read · PaperValue.sg
After selling your car, notify your insurer and request written confirmation of cancellation or a policy change. Do not assume the ownership transfer has also processed your insurance refund.
The amount returned depends on your policy, its effective cancellation date and any claims. The old blanket estimate of “80%–95% of unused premium” was too broad.
Confirm the cancellation date
Contact your insurer with your policy number and proof of sale or deregistration. Ask for:
- The effective cancellation date and required documents.
- The refund calculation and any minimum premium or fees.
- The payment method and expected processing time.
- How your NCD will be recorded for the next policy.
Some insurers require written notice; some can use a supported sale date. Do not assume all refunds start on the day you call, or that backdating is always available. Keep appropriate cover until ownership and vehicle use have been handed over.
Published refund terms
These are the terms checked on 13 September 2026 for the products linked below. Your policy wording and endorsements govern your refund.
| Insurer or product | Published basis after cover starts | Conditions to check |
|---|---|---|
| FWD comprehensive car policy | 80% of unused prorated premium | No benefits payable; notice and minimum-refund terms apply |
| Income Drivo | 85% of unused prorated premium | Can be 100% prorated if another car policy is taken with Income within 90 days; minimum premium and claim conditions apply |
| Budget Direct | 80% of unused premium | No claims made or incidents reported; written-notice terms apply |
| AIG Auto Protector plans | 80% of unused prorated premium | Claim, certificate-return and premium-payment conditions apply |
Sources: FWD published policy contract, Income Drivo FAQs, Budget Direct cancellation terms, AIG Auto Protector FAQs.
FWD’s published contract uses 80%, not the 95% previously quoted here. We have also removed the old AXA row rather than treating it as a current product quotation.
A worked example
Assume a $2,400 annual premium and exactly half the insured period remaining. The unused premium is $1,200.
| Applicable refund basis | Illustrative refund |
|---|---|
| 80% of unused premium | $960 |
| 85% of unused premium | $1,020 |
| 100% of unused premium | $1,200 |
These amounts are before any applicable adjustments or minimum charges. Insurers generally calculate the unexpired period in days, so “six months left” may not be exactly half a policy year.
There is no single payout deadline. For example, the cited AIG Auto Protector FAQ states four to six weeks after completed cancellation. Ask your insurer for its own timeline.
If you have made a claim
A claim or reported incident can remove refund eligibility, even with months left on the policy. The conditions differ by insurer.
Tell the insurer about any pending incident or claim and ask how cancellation affects its handling. Do not delay an accident report while arranging the sale. Cancellation does not, by itself, determine whether an earlier event is covered.
Keep your NCD record
NCD belongs to the policyholder rather than passing to the buyer with the car. Ask about applying it to your next vehicle or switching the policy instead of cancelling.
If you are taking a break, get the retention period in writing. Income’s Drivo FAQ currently states 24 months from the end of the last policy; another insurer may apply different terms.
A 50% NCD does not guarantee the same final premium on a different car. The base premium, excess, coverage and other discounts can all change. NCD protection is also a separate benefit that may not carry across insurers.
Frequently Asked Questions
Do I automatically receive an insurance refund after selling?
Do not rely on that. Notify the insurer and obtain confirmation of the cancellation date and refund.
Will I get 95% of the unused premium?
That is not a reliable general rule. The FWD, Budget Direct and AIG products cited here use 80%; Income has different terms.
Can I claim a refund after making an insurance claim?
Often not, but your policy’s conditions determine the answer. Disclose pending claims and incidents when requesting the calculation.
What if I buy another car immediately?
Ask whether a vehicle change or replacement policy avoids a cancellation deduction and preserves your NCD. Compare the revised premium and cover too.