Car insurance price war

Car insurance price war

It’s almost certain that many motorists are paying much more than they need to for comprehensive car insurance, and new reports suggest premiums can vary by thousands of dollars for the same driver.

But as new players enter the car insurance market in Australia, drivers are being urged to shop around for a better deal.

Until recently, reports show that around 70 percent of Australia’s car insurance market has been held by two key players; IAG and Suncorp Metway, which own a number of the familiar insurance brands.

But in the past few years, dozens of new players including Australia Post, Coles, Kmart and most recently Woolworths have entered the market and stirred up premiums.   

Peter Arnold, research manager at RateCity, said there is huge value in comparing car insurance.

“You could save hundreds of dollars, in some cases even thousands,” he told Today Tonight. “If you don’t compare, you’ll never know how much you could save.”

Research service Canstar compared companies’ premiums across all states and found that in some cases prices ranged by more than $2600 for the same driver profile.

Today Tonight also compared 13 different brands for a hypothetical young driver, a middle-aged parent and retiree. Results showed that among the lowest premiums for the young driver were quotes from AAMI, Woolworths and Budget Direct, while for the middle-aged parent AAMI, GIO and Suncorp quotes were among the lowest. For the retiree profile used, Budget Direct, Virgin Money and Australia Post offered some of the lowest premiums available.

In a written statement, Suncorp said: “Price comparisons like these try to paint insurance as a “one-size-fits all” product, but it is not. As well as product features and cover differing between insurers, so to do pricing structures and it is critical that customers seek out a product that meets their specific needs.”

A spokesperson from insurer CGU agreed: “Each CGU car insurance policy is tailored to the individual and takes into consideration a variety of factors in determining a premium that ensures the right level of cover for the customer.”

In a separate response NRMA said: “It is important to focus on value when buying car insurance, not just price. While price is important, customers need to take into account what the policy covers them for.”

Like most insurance brands’ online quoting systems, car insurance comparison sites include such factors as the car owners driving history, rating, age, type of vehicle, where the vehicle is kept, its value, and claims history among other things, according to Arnold.

“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 against a range of other players,” he said.


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Learn more about car insurance

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance. 

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can I drive a new car without insurance?

It is illegal to drive a car in Australia without insurance. Most states require that you get your insurance in place before you drive the car off the dealership’s plot. So, the answer to whether driving a new car without insurance is no, it is not allowed.

The only time you can possibly legally drive an uninsured car is when you have to get the vehicle registered. You should drive straight to an inspection station or your state's vehicle registry. You must also make sure that you take the most direct or convenient route possible.

It is important to note that your compulsory third party insurance (CTP or green slip) isn’t valid until your car is registered.

Driving an unregistered or uninsured vehicle can have severe legal repercussions. If you are involved in an accident, and are driving an unregistered and uninsured vehicle, you will be personally liable to pay compensation to anyone hurt, as well as for damages. If you are caught driving a vehicle without insurance, you may be fined or even have your vehicle seized.