Car insurance policies have a lot more in common than insurers might like you to think, and that's good news for you – it means you have a better chance of understanding what you're buying and getting the best deal.
All insurers in our car insurance comparison offer cover for accident, theft, fire, storm, flood, hail and vandalism, and provide at least $20 million of public liability cover. Most also offer a 24-hour helpline to organise towing when you're in strife, lifetime repair guarantee (if you use an authorised repairer) and an agreed value policy, which means you usually get to select from a range of values to insure your car for, although some insurers, like Bingle, offer market value only.
But there's several exclusions in common across the board: you're not covered if your blood alcohol limit is over 0.05, if you use your car for racing, or if you get paid for transporting goods or people (unless you get a policy specifically for this purpose). Most policies don't cover cash lost if your car is stolen or in an accident, but many will cover jewellery, sporting equipment, mobile devices and electronics like phones and tablets.
Lose the loyalty penalty
Car insurers may give the impression, through misty-eyed marketing campaigns and the like, that they value your business – but they often value new business even more. Over half of the insurers we surveyed admitted that, all other factors being equal, premiums for a renewal could be higher than those for a new policy, while only 12 out of 50 insurers offer a loyalty discount.
That's why we call it the loyalty penalty: the insurers cash in on consumers who renew their policies without shopping around. So do yourself a favour and shop around when your insurance is up for renewal.
Check your insurer's quote online as a new customer and get quotes from three other insurers before renewing your premium. Look out for special offers from insurers, as some will match or beat competitors' quotes, and if you can get a human on the phone, it may well be worth your time to call your insurer and squeeze them further.
If you can afford more than the standard excess, then you should. Raising your excess is a form of self-insurance that will not only lower your premium upfront, but can also protect you from future premium increases. The majority of the insurers we surveyed said premiums could increase, or an unprotected no-claim discount (NCD) could reduce, even if you have a small claim under $1000. Even claims that are not under your control – such as windscreen claims, hailstorm, theft and collision with animals – commonly increase your premium.
If your NCD is protected, the insurer can still increase the premium based on an adjusted weighting. About half the insurers we surveyed said your premium could increase following an at-fault claim, even if you have NCD protection. So paying for a small repair yourself could be the cheaper option.
Comprehensive policies with a drive-less-pay-less approach limit your cover to a certain number of kilometres, for a cheaper premium. If you know how much you're driving on average, mention this when you get a quote and use it to negotiate a cheaper premium. Some insurers (Apia, Australia Post, Budget Direct, Dodo Insurance, Virgin Money, AON, Australian Unity, Bendigo Bank, Bupa, CGU, HBF, Peoples Choice Credit Union) offer a discount for low kilometres, and those that don't specify it still might offer a discount over the phone.
Keep in mind that, according to Roy Morgan, Australians drive almost 16,000km per year on average – and add another 1,850km if you have kids. The older your children, the more you drive; teenagers ramp the average total up over 20,000km a year.