Car insurance premiums soar

Car insurance premiums soar

Car insurance premiums have increased at a rate three times higher than inflation over the past year, new research has revealed.

A review of more than 28,000 car insurance quotes for a range of vehicles and driver profiles from around Australia found that the average car insurance premium has increased by 7.95 percent and is well above the nation’s inflation rate of 2.5 percent.

These price increases could be partially attributed to the number of insurance claims being made by policy holders, as well as a series of recent natural disasters.

Families and under 25s hit hardest

Car insurance premiums for families were found to be among the most expensive, at an average of $1181 and rising by more than 12 percent in the past year, while premiums for drivers under 25 jumped by nearly 10 percent to $1361 last year.

At a state level, NSW and ACT drivers were found to pay the highest premiums at $1464 on average, ahead of Victorian motorists at $1163. Premiums charged to Tasmanian drivers increased by the most in the past 12 months, up 11.75 percent to $813.

A spokesman for the Insurance Council of Australia told News Ltd that a wide range of factors affected the cost of insurance policies.

“Each individual insurer’s policies are based on its own commercially sensitive criteria and use data each company deems appropriate,” he said.

He also stressed that the cheapest policies weren’t always the best, and that consumers should shop around and compare policies for the most competitive deal to suit their own needs.

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Learn more about car insurance

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance. 

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can I drive a new car without insurance?

It is illegal to drive a car in Australia without insurance. Most states require that you get your insurance in place before you drive the car off the dealership’s plot. So, the answer to whether driving a new car without insurance is no, it is not allowed.

The only time you can possibly legally drive an uninsured car is when you have to get the vehicle registered. You should drive straight to an inspection station or your state's vehicle registry. You must also make sure that you take the most direct or convenient route possible.

It is important to note that your compulsory third party insurance (CTP or green slip) isn’t valid until your car is registered.

Driving an unregistered or uninsured vehicle can have severe legal repercussions. If you are involved in an accident, and are driving an unregistered and uninsured vehicle, you will be personally liable to pay compensation to anyone hurt, as well as for damages. If you are caught driving a vehicle without insurance, you may be fined or even have your vehicle seized.