December 9, 2010
Drivers are being urged to compare their comprehensive car insurance premiums, following reports that financial comparison websites such as RateCity will help reduce the excessive costs charged by some major car insurance providers.
It follows a study by RateCity that found price differences of $724 on average across Australia for comprehensive car insurance for the same driver profile.
RateCity conducted a national study which compared quotes over four different suburbs in six Australian cities, across 27 providers of comprehensive car insurance. The same driver profile was used for each comparison which was a single 30-year-old male driving a 2005
Toyota Corolla with an excellent driving record, retaining his rating one no-claim bonus discount.
According to the study, there were significant differences between the average comprehensive car insurance costs for each city. The most expensive city to insure your car with comprehensive car insurance in Australia was Sydney with an average cost of almost $1135, while Brisbane was the cheapest, with an average of about $654.
The national average (difference between highest and lowest costs) showed a $724 difference in costs. Sydney had the biggest price difference of $928, while Brisbane had the smallest difference of $549.
Compare features after price
RateCity’s CEO, Damian Smith, says that the study shows why price is the most important part of any financial product, especially car insurance and should be the first thing you compare.
“It’s clear that there are potentially hundreds of dollars to be saved in shopping around for car insurance. Given the increases in home loan repayments over the past 18 months, these are really important and significant savings for Australian drivers.
“Drivers should be sceptical of calls to forget about price comparison when they come from insurers with overwhelming market share, and premiums that are often higher than those of newer competitors.”
Comparison sites such as RateCity allow users to compare car insurance policies on price as well as several key features, Smith says. RateCity for instance, lists 29 features including star rating, maximum no-claim bonus rating, if the policy has the option of agreed or market value and if it allows you to pay by the month at no extra cost.
“Features other than price are obviously vital, which is why we and other comparison sites try to list as many product attributes as possible,” Smith says.
“We also urge drivers to read product disclosure statements very thoroughly, and ask questions about claims experience. But when our car insurance study shows that there are sometimes 60 percent differences between the highest and lowest costs for the same driver profile, price is clearly a major issue and drivers have the right to really compare and shop around.”