Turn on the television and it is sprawled with advertisements for a range of car insurance companies, big guns like NRMA, AAMI and GIO as well as smaller and lesser-known brands like Budget Direct, Youi and Bingle.
They all have something to tell us, whether it is to "un-worry" (NRMA) or cheaper prices (Bingle). But the thing is who should we trust? While most of us are more familiar with the bigger insurers, can we really trust the smaller, not-so-familiar ones?
Who is more trustworthy?
Firstly, in order to start up an insurance company in Australia, the company needs to adhere to a range of rules and regulations such as the Australian car insurance code of practice and they also need an Australian Financial Services Licence (AFSL). So you can rest assured knowing that most car insurance companies in Australia with these licences and regulations, are safe and the chances of them closing up shop tomorrow never to be heard of again is unlikely.
Secondly, all insurance companies are backed by underwriters (or underwritten by themselves) who basically say "yay" or "nay" to claims. The majority of underwriters are big name companies that have been around for years and have a huge financial base. For instance Bingle is part of the Suncorp Group, Budget Direct by A&G Insurance Services, while Real Insurance is part of the Hollard Insurance Group. So if you are unsure of whether a smaller insurer is reputable or not, perhaps see who their underwriter is and who will be the one behind your claim.
There are an increasingly large number of insurers you cater to a specific market. For instance, the Australian Pensioners Insurance Agency (APIA) offers insurance for those older than 50 and not working full-time; Shannons offers insurance for those with vintage and classic cars and Just Car Insurance is aimed at young drivers with modified and high-performance cars.
The price difference
For many people price is key when making a decision about insurance. There are a lot of smaller car insurance companies out there that are targeted at the budget end of the spectrum and are very competitive in price. Don't be put off by the smaller car insurers as you can see their prices and quite often their services are just as competitive and you may be pleasantly surprised by the saving.