With over 18 million cars on Australian roads (as of 2017), most people understand that a comprehensive car insurance policy is a good idea. The question then becomes, how much will it cost us?
Car insurance varies vehicle by vehicle, and driver by driver, and it’s often the case that drivers will take out cover but not fully understand exactly how their insurer arrived at their pricing decision.
Let’s fix that right now! We explain how your premium has been calculated, and then take a close look at the factors that could help reduce this cost.
Young drivers are reportedly involved in more accidents than their elders. This means if you have young drivers on your policy, your premiums may be higher, given their risk profile. In many circumstances, drivers are considered ‘young’ if they’re aged 25 years of age or under, although on some policies the bracket can extend to 30, even 40 years of age. If you don’t need to insure any young drivers, shop around for a policy that offers a discount for older/more experienced drivers (i.e. driver age exclusion).
If you’re eager to keep your car insurance premiums to a minimum, one of the most important decisions you’ll have to make is selecting your car. Insurance premiums vary depending on the type of car you drive. Consider the following…
Your insurance premium will vary depending on your car’s ‘home’ postcode. Some areas are safer than others and insurance companies may take this into account when calculating your premium. Cars parked in off-street carports, garages and secure parking bays may carry a lower risk than vehicles parked on streets and in unsecured parking areas.
It’s important to make sure you inform your insurance company if your circumstances change (e.g. you move house); in some cases, it may even reduce your premium if you move to either a safer neighbourhood or to a home with a lockable garage.
Your excess payment is a ‘customer contribution payment’ that an insured person (that’s you) needs to make in the event of an at fault claim. Generally speaking, the higher your excess payment, the lower your premium can be. However, think carefully before making your excess payment too high, as you don’t want to put yourself in a bind later on if you cannot afford it
If you insure your vehicle at market value, it is sum insured for whatever the value of an identical car is (e.g. the same make, model, age and condition). This is assessed at the time you claim. If
Are you a careful driver, or do you live on the edge? The kind of driver you are makes a huge difference to your premium.
Be aware that if you are involved in an accident and you need to make a claim, you could lose your no claim bonus. However, if you have ‘rating protection’, your no claim bonus will not be negatively affected from making at fault claims.
Finally, a word of caution. When purchasing your car insurance remember to disclose all information that is being asked of you in relation to your driving and claims history to ensure that you are covered and covered for the correct amount.
The type of car insurance cover you choose has an enormous impact on your premium. There are a few different types you can take out.
One of the final things insurers may factor into their calculations is whether or not there’s any outstanding finance on your car (i.e. you took out a loan to purchase it).
With so many car insurance options, it’s important to consider your specific requirements and circumstances before comparing policies, to make sure you choose one tailored to your needs. Shop around before you buy and remember – always read the Product Disclosure Statement (PDS), as every policy differs slightly.