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With so much competition it’s possible to play the system to find the best deals – however, with so many options it’s also hard to cut through the noise.
To help you on your way to getting the best deal we’ve put together three top tips.
Put in the effort to shop around
It may seem like a daunting task, but insurance insiders have revealed that huge competition in the industry has led to insurers offering far better deals to new customers in an effort to snatch accounts away from competitors.
The result is that the price for a premium on the same car could vary as much as $1000! That’s a hefty saving by anybody’s standards.
Joel Gibson of group discount company One Big Switch told news.com.au:
“Our advice to consumers is when you get your renewal go onto your insurer’s website, pretend you are a new customer applying for the same cover and see if you get the same price on your renewal. Then you know whether they are playing you for a fool and you can take it from there. It takes a bit of work to shop around and a lot of people don’t do it and end up paying the price for it.”
Unfortunately, no one comparison site offers prices for every Australian insurer, so you’ll have to put in some manual effort.
Get the right type for what you need
There are several different levels of cover – and not everyone needs the same type. The level you need depends on how nice your car is, how good a driver you are and how much you’d care if your car got written off.
You need to have an idea of how reliable your car is before deciding. If you’ve bought new or used through a reputable dealer this should be quite clear as you’ll get a full service history. However, if buying privately or through sites like Gumtree you need to make sure you quiz the previous owner and, if the service history is absent or shady, bear this in mind when insuring yourself.
It’s important to get a good level of understanding about the different options before committing to a deal. Here’s a quick overview of what’s on offer:
Compulsory third party – The cheapest and most basic level, which covers you for compensation claims if you kill or injure someone in an accident. Property damage is not covered. If your car is registered you’ll have this automatically.
Third party property – The second cheapest level of insurance covers you for the same as compulsory third party plus any damage to third party property. A good choice if you’re driving a cheap old car you don’t care about damaging.
Third party property, fire & theft – The above, plus cover for damage to your car from fire or theft that was not your fault. Good if you’re a careful driver and want to cover yourself from all the other stupid people out there!
Comprehensive – Covers you for almost anything, including the costs of crash repairs and replacing your car, even if the incident was your fault. Naturally, this is the most expensive kind of cover, but it’s worth it if you’re in a nice car and a bit accident prone.
Assess your excess
The excess on your policy is the amount you’ll have to pay out yourself in order to make a claim. Depending on your driving history, your vehicle and the type of insurance you have this could range anywhere from $300 to $3000.
Top tip for the girls – some insurers give excess discounts to young women as they’re seen as safer drivers, so have a shop around to find the best deal!
Generally, the higher the excess, the lower the annual premium. If you want to lower the amount you pay a year you can choose to voluntarily raise your excess. This could also protect you from future premium increases, as insurers are likely to bump up the price on a driver that makes small claims instead of forking out themselves.
However, be aware that raising it too much may make it worthless to make a claim should you ever need to. There’s no point, for example, raising your excess to as much as your car is worth, because your excess will negate any potential payout.