Simple tips to slash your car insurance bill

It’s almost certain that many Australian drivers are paying much more than they need to for car insurance.

RateCity conducted “mystery shopping” surveys on car insurance, obtaining a number of quotes from different insurers for the same car, driver and address combination, with disturbing results for consumers.

“When we first compared car insurance quotes this way,” Michelle Hutchison, spokeswoman for RateCity, says, “we were surprised at how wide the difference was between some insurers; as much as several hundred dollars, despite every detail (car, driver, address) being identical.

“After having done this survey now three times, we’re no longer surprised by these findings.”

The good news is that despite high costs from many insurers, there are simple ways many drivers can save on their car insurance. Here are a few simple tips that can help:

First, don’t just renew your car insurance automatically every year. With many of us using direct debits from bank accounts or credit cards, we often don’t notice the size of the annual premium; we just see a smaller amount coming out every month or quarter. When you get your renewal notice, shop around; starting with an online car insurance comparison service such as RateCity.

While RateCity doesn’t compare all brands, it does compare several with one simple quote form, and so you can quickly see whether your existing policy is competitive. As a general rule, looking at three different brands is probably the right answer; but whether you do it online or on the phone, make sure you compare car insurance before renewing. Obviously don’t just compare on price; you need to make sure you’re getting the best overall value. RateCity uses Canstar’s Star Ratings system to help guide you on the overall “value for money” equation.

Features: Make sure you really need all the features that are offered by some policies. For example, some policies promote the fact that they allow you to choose your own repairer in the event of an accident. For some drivers, this is important; you may have a long-time mechanic who is the only person you trust to work on your car. But for many of us with modern cars, there are lots of repairers who could do the job, and provided they’re in a convenient location, the “panel” nominated by an insurer could well be fine; with a lower premium to boot.

Only allow older drivers: Almost all policies will charge you more if you have drivers under the age of 25, and especially under the age of 21. If you ensure that the car isn’t driven by younger drivers, then you’ll often see a saving in premium. If you can’t avoid having younger drivers (for example; if you are one yourself) then look at doing an advanced or defensive driving course. This can sometimes lower your premium.

Keep a clean driving record: Having no accidents or “claims” against insurance in previous years makes a huge difference to your premium. One year of a clean record or no claims can reduce premiums by 20 percent, all the way up to a 60 percent reduction for a “rating one” no claim bonus (five years or more).

Theft protection: Garaging your car at night (which also prevents hail and storm damage), the use of an alarm and immobiliser, can all help reduce your premium. This makes sense, because each of these things makes it less likely that your car will be stolen. Not only will these things reduce your premium, they’ll add to your peace of mind.

Higher excess: An excess is the amount you’ll have to pay before making a claim. For example, a $500 excess means that if you have an accident, you pay the first $500 of damage before you can claim on insurance. Many policies will allow you to modify your excess; the higher the excess you’re willing to pay, the lower your premium. You only pay the excess if something goes wrong; but of course remember you could be worse off overall with a higher excess, lower premium combination.

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