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How much is car insurance likely to cost me?

How much is car insurance likely to cost me?

The cost of car insurance can differ from person to person, based on not just the car you drive but also how much you drive it every day and for how long you’ve been a qualified driver.

For instance, you’re likely to pay a much higher premium if you’re younger, and women usually pay less for car insurance than men. You may also have to pay more for car insurance for a brand new car than for an older car, and if you live in Victoria or New South Wales, you’re likely paying more for car insurance than elsewhere in the country.

What is the average car insurance cost in Australia?

Estimating the average cost of car insurance can be challenging, given how personalised car insurance quotes can be.

While one estimate suggests that average car insurance cost in Australia can be A$1,131 per year, the same study also notes that car insurance costs can vary by up to A$1,047. Again, car insurance rates vary a lot, depending on the kind of policy you buy. If you buy a third party property damage policy, you may pay much less than what you’d pay for a comprehensive car insurance policy, though you will have a lower level of coverage.

If your car insurance covers damage to your car as well, you will likely have to discuss with your insurer whether your policy covers your car up to an agreed value or up to the market value.

Your choice will impact the cost of the policy, as will the excess amount you choose to pay out of your pocket. If you choose additional coverage such as windscreen cover or add other drivers to your policy, your premium will likely be higher. If you intend to use the car even partly for business purposes, your insurer may charge you a higher premium.

How much is comprehensive car insurance?

A comprehensive car insurance policy is usually preferred by drivers when they own an expensive car which can also cost a lot to repair. The value of the car will hugely impact the premium you pay for insuring the car, especially since you’ll want the policy to cover the widest range of incidents and possible damages.

Compared to the cost of insuring a more popular car model, the average cost of comprehensive car insurance can be twice or even three times as much, although the exact amount can only be gauged by getting comprehensive car insurance quotes based specifically on your details.

You should remember that it is not mandatory to buy a comprehensive car insurance policy. If you drive a fairly common car model and aren’t still paying off a car loan, you may consider buying only third party property damage insurance or third party fire and theft insurance.

Consider finding out the risks to which your car is exposed when parked either at your home or your workplace to decide how much insurance you need over and above the mandatory third-party coverage. You can also look at your driving habits, and how much you depend on your car for everyday tasks.

How do I compare comprehensive car insurance quotes?

The comprehensive car insurance policy most Australian insurers offer should ideally cover any damage to your car and to the things you keep inside it. In addition to this, the policy should cover the cost of any treatment you need for injuries suffered in an accident, irrespective of whose mistake led to the accident.

When you compare comprehensive car insurance quotes, you should check if such coverage is included along with the liability coverage usually offered by a third-party property damage insurance policy. You may want to look at the incidents covered by the policy and check if the ones more likely to occur in your area are covered.

Comparing car insurance quotes usually requires supplying a fair amount of personal information in order to get an accurate quote. If the insurer is only asking for your postcode and the car you drive but not your age, gender and driving history, you may be offered a premium rate that doesn’t reflect your driving experience.

In the event you find a policy that is otherwise suitable for you, you may want to ask the insurer to give you a more precise quote, and also find out if you can get a discount if you have a no-claims history or are buying the policy online. 

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This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.

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