By Jack Han
February 8, 2010
Car insurance premiums are expected to rise in 2010 as a result of insurers compensating for lost profits in 2009. However, as new competitors enter the market, Australians who shop around for car insurance will be sure to find better offers.
Major insurance providers such as Suncorp-Metway and Insurance Australia Group took a beating to their earnings last year after successive payouts for natural disasters claims, resulting from bushfires and heavy storms.
With three-quarters of the market share between them, these losses are sure to be felt by customers, who are expected to see car insurance premiums rise by 5 percent in 2010.
However, many competitors have fixed their eyes on Australia’s car insurance market, with Virgin Money entering the fray last year. And from the United States, Progressive Direct Insurance Co. is planning to launch its online motor vehicle insurance business to tap into the growing trend of Australians who compare their car insurance and other personal finances on the internet.
By focusing on the online market, competitors avoid the costs of directly competing against the insurance giants, meaning that savings made can be passed on to consumers in the form of cheaper rates.
More and more people in Australia are using the internet to shop for car insurance, with 68 percent of customers applying online and 75 percent searching for car insurance online, a Google survey found. As this trend continues, we will likely see more drivers purchasing and managing their policies over the net as well. Experts also believe that Australia’s disposition to compare car insurance online will attract many more foreign competitors in the future.
A recent study by RateCity showed that many drivers can save up to $800 on their comprehensive car insurance by switching to the most affordable providers. This means that if consumers stay vigilant for offers from competitors trying to break into the market, the savings made could go well into the thousands of dollars.
By joining the thousands already applying for car insurance online, Australian drivers can also take advantage of hundreds of special discounts offered to customers who sign up over the net, adding to the savings made in their yearly insurance costs.
The insurance giants are standing their ground in the market, but wise shoppers can always find the cheapest deals by conducting a quick quote online. By searching for new offers and comparing prices across all the competitors, you can drive knowing that you have the best cover for your vehicle.