When I asked if there was any refund for the remaining 7 months the answer was no. If you pay annually you lose the lot. If you pay monthly, the remainder is deducted from your pay out. It is in the Policy booklet. I was told it's not fine print. It's on Page 31. You can't transfer the leftover to a new vehicle either.
It was suggested to me when phoning to register a complaint that it would be a waste of time complaining or trying to get it changed. It's apparently LAW law. Every insurance company does it. I checked a Commonwealth Bank (CommInsure) policy booklet and they have a similar statement but it is less specific - not mentioning monthly instalments just 'unpaid premium' (Section 6.4.10).
When the insurance company takes ownership of an uncovered vehicle when they pay out, they collect the remainder of the Registration and Third Party fees. It does not get added to your pay out.
It is a one way street.
Just glad I'm a Senior and not a Pensioner.