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Being a loyal driver could cost you $1490

Being a loyal driver could cost you $1490

RateCity shows you why leaving your comfort zone and comparing comprehensive car insurance could save you more each year.

August 20, 2010

Sometimes there is a level of comfort in sticking with the things we know and trust. But if staying loyal to a company means that you could be paying more than necessary, wouldn’t you be interested in the alternatives?

Currently two car insurance companies, Suncorp Metway and the Insurance Australia Group (IAG), hold around 80 percent of the market share for car insurance. While the two offer their own insurance products, they are also underwriters for a number of major car insurance companies. For example under the Suncorp umbrella there is AAMI, Bingle and GIO just to name a few, while IAG is behind CGU, NRMA, The Buzz plus others.

According to RateCity’s recent bi-annual car insurance comparison throughout Australia, when it comes to the prices offered by these two main players, they are closer to the expensive end of the spectrum, with some exceptions including Bingle, which is an online-based low-cost brand and were one of the cheapest overall.

RateCity’s CEO, Damian Smith says, “Our research proves that there are a large number of people who could be paying more for their car insurance simply by sticking with who they know and trust. It is possible that the majority of these people don’t compare otherwise they would make the switch.”

Why stay when you can save
For instance, RateCity found that out of the four suburbs it surveyed in Sydney, drivers could save potentially $1250, with the dearest quote from the same western location of $1965 by Suncorp and the lowest at $720 from AAMI. While in Melbourne the most expensive premium in four suburbs across the city was with Suncorp at $2107 and the cheapest was with Youi at $618, showing a saving of close to $1490.

The good news is that switching car insurance is relatively easy, there are usually no fees involved (unless you break a current contract) and it can be done instantly. However make sure you consider a few things before making the switch, such as:

  • Claim rate. Ask the insurance company you are interested in for the percentage of how many claims are approved and how many aren’t. This way you can gauge how reliable they are.
  • Inclusions and extras. Check what is included in the policy and what isn’t. Just because one insurance company may cover one thing, it doesn’t mean that others will. Also check what options you may have to pay extra for such as car hire.
  • Consider the smaller players. Some of the smaller and not so well known companies can be more competitive in price.
  • Level of service. How does the new company operate? Are they online only or do they have a dedicated call centre?

So ask yourself, why are you with your current car insurer, and if the answer is because you are loyal or they are a well known company, then what are you waiting for? Compare car insurance quotes online today and see how much you can save.

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Learn more about car insurance

How to choose car insurance?

With so many types of car insurance out there, it can be a challenge to choose the right one for you. Factors to consider when choosing car insurance include the cost, the inclusions, and the benefits of each, which may vary from provider to provider. When choosing a car insurance company, spend some time comparing what is, and what isn’t, covered by the policies.

Compulsory third party (CTP) insurance is part of your car registration cost. However, CTP does not protect you against damage to your car if it’s written off after an accident or if it gets stolen. Moreover, you might have to pay for damages to someone else's property in case of an accident.

Other covers you may wish to consider are third party property insurance, third party property, fire and theft insurance, and comprehensive insurance. While you might want to get additional insurance, not everyone requires the highest cover, and it depends entirely on several factors, such as the make and age of the car or the area where you live.

You can compare car insurance providers to get a policy that suits your needs.

Can I have two insurance policies on one car?

Everyone who drives a car in Australia must have insurance. If you were found driving without insurance, you’d likely have to pay a big fine go and may even have to go to court.

Having said that, there’s no need to have two car insurance policies at the same time if both cover the same thing.

You may get different policies for comprehensive or third party damage and compulsory third party, but usually there’s no need to have different policies for different drivers. Insurers should cover multiple drivers for the same car.

There are some instances where you may accidentally have two of the same car insurance policies. For example, if one policy has automatically renewed, but you sought insurance elsewhere without realising. If the question is, can a car have two insurance policies legally? The answer may technically be yes, but again, having two separate insurance policies for the same vehicle is not recommended.

If you do have two policies and are involved in a car accident, you cannot file claims with both insurance companies to get a financial windfall.

Does car insurance cover contents?

Thousands of vehicles are stolen each year, but insurance can protect you from financial loss.

A common question you may have is what does my car insurance cover? This depends on the type of insurance and there are four basic types of car insurance, and each offers different cover.


Types of car insurance

Compulsory third-party (CTP) insurance indemnifies you against liabilities arising due to personal injuries to another party. A third-party fire and theft insurance policy covers loss to your car or third-party property in an accident. It also covers expenses if your vehicle is damaged in a fire or stolen. Third-party property insurance covers any liability resulting from damage to third-party property but any damage to your property is not covered under this policy.  Comprehensive policy covers most costs arising in case of an accident to either your car or third-party property.


Does car insurance cover stolen contents?

Does car insurance cover contents lost in case of a theft? Generally, any valuables stolen from the vehicle, such as your phone, are not covered under car insurance. However, some insurers offer vehicle contents insurance that does cover the loss of valuables from your car.

Consider reading your policy’s product disclosure statement (PDS) to find out if it covers contents, or contact your insurer directly.

Remember, there are several ways in which you can prevent theft of both your car and contents. Being a little more cautious can make a huge difference.

Can you claim insurance for car dents?

Car insurance has been designed to protect you from some of the costs of repairing damage to your car. However, is it worth claiming car insurance for a dent?

The main factor to take into account is the excess that you will need to pay at the time of making the insurance claim for the car door dent, and comparing it with the repair cost of the dent.

For instance, if someone collided into your car with a shopping cart and the cost of repairing the dent is lesser than your excess, you would be better off not making the claim. However, if your car’s panels are dented by intense hail, in all likelihood the cost of getting the dents taken care of will be much higher than your excess. Here making a car dent insurance claim would make sense.

Please note that if you’re making a car dent insurance claim for damages that have accumulated over a long time, you will be required to pay an excess for each separate incident that dented your car.