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Tips to find affordable car insurance for high-risk drivers

Tips to find affordable car insurance for high-risk drivers

The premium on your car insurance depends on how risky the insurance company perceives you and the possibility of filing a claim in the future. Insurers adopt different measures to determine the risks and some of the common factors that determine the car insurance premium include your age, gender, frequency of driving, claims history, and driving experience and history.

If you have a history of traffic infringements or suspended license or made several claims, you may be categorised as high-risk, which can substantially increase the cost of car insurance. The type of car and other factors can also increase your riskiness and impact the car insurance premium.

Can high-risk drivers get insurance cover?

Even if you’re perceived as a high-risk driver, you can still get car insurance cover albeit at a higher premium. While looking for high-risk car insurance in Australia, it’s important to disclose all relevant information about your driving and claims history. If you withhold this information, it may void your cover later.

Different insurers treat high-risk drivers differently. Some insurers may have stricter restrictions and charge higher premiums when compared to other companies. You can consider smaller coverage like a third-party cover only. Getting multiple high-risk car insurance quotes and comparing what is covered and what isn’t is important to make an informed choice.

How to reduce your premium cost?

1

Check for discounts

Insurers may offer discounts on online policies or if you’ve multiple covers with the same company. If you don’t make a claim, you may receive no claim bonus even if you’re high-risk at the time of buying the policy.

2

Park your car safely

Reducing the risks of damage or theft by parking your car safely, such as within a garage or carport, may help reduce the premium. You may also buy a car fitted with security and safety devices or install these to reduce the risks.

3

Opt for higher excess

Excess is the amount you’ll pay in case of a claim and the balance is paid by the insurer. Although choosing higher excess can reduce the premium cost, you need to consider if you can afford to pay this amount in case of an accidental claim.

4

Consider the coverage

Only third-party coverage is mandatory. If you opt for additional comprehensive coverage, it impacts the premium. Consider other policies like third-party property, fire, and theft coverage, which are more affordable. However, consider what is included and excluded before making your choice.

5

Consider driving less when possible

Some insurers offer discounts if you don’t use your car regularly, or drive under a certain kilometre cap each year, such as less than 10,000km. Some pay-as-you-go policies allow you to set a kilometre limit and offer lower premium when you don’t exceed it. Choose public or other modes of transportation when possible to reduce driving your car.

How to find cheap car insurance for high-risk drivers?

  • When you’ve added demerit points…
    Car insurance approval depends on the number of points and types of violations. Most insurers accept demerit points from one minor speeding ticket but serious violations can make you ineligible for car insurance. Taking defensive or safety courses may help lower the rates after accumulating points.

  • When you’ve been in an accident…
    If you have a high-risk status due to one or more car accidents, one option to find the most affordable car insurance is to compare policies offered by specialised high-risk car insurance companies. Be honest about accidental history to avoid possible denial of future claims.

  • When your coverage has lapsed…
    If you’re not insured for a longer period, you may pay a higher premium. You can ask your former insurer to reinstate the cover without increasing the premium. You may re-evaluate your cover after six months of safe driving and see if you qualify for a lower premium or get added to a family member’s policy if you live with them.

  • When your licence has been suspended…
    If your license is suspended for a driving-related offence, you may pay a higher premium to insure a car when you legally cannot drive. If you plan to park your car, check if your insurance company is willing to reduce the coverage to a minimum like liability insurance only.

  • When you have a drink-driving conviction (DUI)...
    Some insurers may not be willing to provide you coverage after a DUI, but it is not impossible. The rules related to how long you are considered a high-risk driver after a DUI conviction may vary from one state to another. 
    For example, some companies may be willing to provide you insurance if you only have one DUI offence. Generally, DUI stays on record for 10 years but in some states, it isn’t removed unless you give limited access or have it removed. You may want to consider taking a safe driving course to boost your chances of approval by the insurer. 

Questions you may have

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 register and insure a car without a license?

Yes, it is possible to buy, register and insure a car without a driver’s licence in Australia. While most states and territories have different rules regarding car purchase, some states may allow this. However, it is important to note that you won’t be covered if you’re driving the car and you are involved in an accident.

The reason people consider taking out cover on their car even without a licence is to protect the car against theft, vandalism and fire. If someone else regularly drives your car then also you may wish to insure your vehicle. Ensure that you list this driver on your policy, else you might end up having to shell out money for an unlisted driver excess in the event of a claim.

Can you claim insurance for car dents?

Car insurance has been designed to protect you from some of the costs of repairing damage to your car. However, is it worth claiming car insurance for a dent?

The main factor to take into account is the excess that you will need to pay at the time of making the insurance claim for the car door dent, and comparing it with the repair cost of the dent.

For instance, if someone collided into your car with a shopping cart and the cost of repairing the dent is lesser than your excess, you would be better off not making the claim. However, if your car’s panels are dented by intense hail, in all likelihood the cost of getting the dents taken care of will be much higher than your excess. Here making a car dent insurance claim would make sense.

Please note that if you’re making a car dent insurance claim for damages that have accumulated over a long time, you will be required to pay an excess for each separate incident that dented your car.

 

Does car insurance cover driving while intoxicated?

Will car insurance pay if drunk driving causes an accident? Driving under the influence of drugs or alcohol is illegal, however, some insurers may cover the liabilities.

Your driving history and experience are important factors that affect the car insurance premium. If you have had violations for drinking under the influence, insurers may perceive you as high-risk. They will then be more likely to charge you a higher car insurance premium.

But does car insurance cover drunk driving accident liabilities? Many factors are involved in answering this, here’s what you should know.

Amount of cover

Although driving while intoxicated is illegal, if you’re involved in an accident, your insurance may cover damages within the limits of the policy. While expenses should be covered under your car insurance for drunk driving accidents, you may face other penalties, like cancellation or non-renewal of your policy.

Premiums

Additionally, the premium on car insurance for drunk drivers may increase by as much as 79% if you’re convicted. Some insurers, however, won’t cover damages if you’re driving whilst intoxicated and you don’t comply with the conditions laid out in the Product Disclosure Statement (PDS).

Check "does car insurance cover you if you are drunk" in the terms and conditions of your policy if you have a history of such violations.

Are stolen car keys covered by insurance?

Having your car key stolen is not just frustrating, but it can also turn out to be quite a costly affair. Modern electronic keys can be much more expensive to replace than traditional ones, and losing one can make a sizeable dent in your pocket. But does insurance cover stolen car keys?

A few comprehensive car insurance and third party fire and theft policies do cover lost car keys as a standard, while others offer it to their customers as an extra. However, there are some that don’t entertain stolen car keys insurance claims, so you must check with your insurance policy provider and read the Product Disclosure Statement carefully before purchasing the policy.

It is important to note that you will need to prove to your car insurance provider that the keys have actually been stolen and not merely misplaced, as most policies will refuse to provide cover in the case of lost keys. Car insurance policies that cover stolen keys typically cover the cost of replacing the keys, recoding your car locks and locksmith charges.

 

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

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