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Click to compare: Is car insurance cheaper online?

Click to compare Is car insurance cheaper online?

By Jackie Pearson
7 January 2009

A number of new online car insurance brands have popped up recently but do your research to ensure you don’t sacrifice service and coverage for a cheaper premium.

In addition to the long-established insurers that are household names in Australia, there are currently around a dozen ‘fresh’ brands specialising in providing online quotes and the ability to purchase, amend and renew your car insurance online.

They all promise cheap coverage by offering more comprehensive underwriting or techniques to calculate premiums more accurately.

compare and buy car insurance online

Image by Mr. Imperial

Some sites even look low-budget and point out that they don’t spend money on things like printing fancy marketing brochures as a way of keeping your premiums low.

WHO IS BEHIND THE BRAND?

There are only around five underwriters behind the dozen online brands.  Auto and General Insurance, for example, underwrites policies for Budget Direct, 1cover, 1300Insurance, 1stforwomen, Cashbank Car Insurance and Ozicare.

Just Car Insurance and Bingle are underwritten by AAMI. eCar policies are backed by “various Lloyds underwriters”. Real Insurance and PayAsYouDrive are brands for the Hollard insurance group. And Secure Motor Plus is underwritten by Vero.

The online brands are a marketing tool for the underwriters as they appeal to a more specific “niche” in the market such as women (1stforwomen) or young drivers (Just Car Insurance).

Developing policies for specific types of policyholder should enable them to bring prices down.

1stforwomen, for example, claims that because women have better driving records than men their “good quality” drivers don’t have to “pay a higher premium to subsidise drivers that represent a higher risk”.

IS THE PRICE RIGHT?

There are substantial price differences between the online players so don’t assume your first online quote will deliver the cheapest deal. Online quotes for a Tarago-driving netball mum with a learner driver found the cheapest premium with Youi at $76.46 per month and the most expensive from Bingle at $354.53 per month – that’s a saving of over $3000 per year.

 Some online brands make money by charging a margin on top of the base premium. Most have an additional charge if you elect to pay monthly. Brands from the same underwriter offer different prices.

WILL YOU SACRIFICE COVERAGE?

Cheap cover can come with restrictions so it is imperative to read the fine-print. Youi, for example, won’t pay a claim for damage caused by a household member who is not listed as a driver on your policy schedule.

Its cover for emergency accommodation, transport or emergency repairs if you are more than 100km from home is $100 per day up to $300 per claim, which is substantially lower than some other policies.

The No Claim discounts or ratings offered by online brands may not be as generous as those available from longer-standing operators or you may have to pay extra to protect your No Claim status.

eCar and Real Insurance have strict underwriting conditions that mean you will not qualify online for their coverage if, for example, you are attempting to insure a young driver. Real Insurance does encourage you to telephone for assistance if you are declined coverage online.

Some online brands won’t insure you online if your car is used for business, if it is modified or has non-standard accessories or if a driver has made multiple claims in the past five years.

CLICK AND COMPARE

Some major insurers are now offering further discounts on comprehensive car insurance policies and renewals if you purchase online. There are plenty of savings to take advantage of if you click and compare, so be sure to do your own comparisons or use a comparison site such as RateCity that comprehensively covers the market.

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Learn more about car insurance

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.

Can I get a refund on car insurance?

Have you decided to cancel your car insurance policy? Maybe you’ve sold your car, or you found a better rate elsewhere.  Perhaps you’re just not driving it anymore. So what happens to the unused amount of your car insurance? Can you get a refund on unused car insurance in such a scenario?

It often depends on who cancelled the policy: you or your insurance provider. If you initiated the process of cancellation, then you may be able to get most, if not all, of your unused amount. There might be some cancellation fees involved.

However, if the policy has been cancelled by your provider, because you defaulted on a payment, then you will not receive any refunds. Keep in mind, sale of your vehicle, or traffic violations such as receiving too many speeding tickets, or being charged with reckless driving, are not reasons to withhold refunds.

If you pay your insurance monthly, your future payments will simply stop. However, many insurance policies are paid upfront for the year, as some companies offer discounts. If this is the case, get in touch with your insurer about getting a refund for the unused amount.

Can you get same-day car insurance?

While you can buy car insurance the same day you purchase a vehicle, coverage may not take effect immediately, and you need to make sure you aren’t driving around without an active car insurance policy. This can happen if the insurer insists that your vehicle needs to be inspected before they approve the policy. When purchasing a new or used car, you will need compulsory third-party (CTP) coverage before you can drive it. Usually, CTP coverage is included with your car registration. However, in some states, you can choose to buy it from an insurer licensed by the state or territory to offer CTP coverage. Consider checking whether you should buy this policy before registering the car.

Given that you can buy a car insurance policy online, getting the policy may only take an hour or two if you’ve done your research. You may want to ask the insurer about any waiting periods they may place on coverage. For instance, if you’re buying third-party fire and theft insurance just before the bushfire season, the insurer may not allow you to file a fire damage insurance claim anytime soon. Many insurance providers will let you decide the date on which your coverage becomes active. This may be useful if you’re about to buy a car and want to match the date the insurance coverage becomes active with the day you plan to register your car.

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.