From Money Magazine, June 2006
It’s never a good time when the car insurance bill comes in, but take heart if your driving record is good, you can get a much better deal.
So you think you're a good driver you’ve made no claims in the past few years, never been fined and keep the car in the garage then why does car insurance cost so much? Insurance company Budget Direct says it doesn’t have to – good drivers will pay less for car insurance through them and they have the evidence to back up the claim.
Research commissioned by Budget Direct and conducted by financial services research group Cannex, using a sample of 20 leading car insurers, found that 98.65% of the time Budget Direct offered the best quoted price for comprehensive car insurance for
average Australian good drivers. It beat the other providers’ combined average quote price by 37.39%.
“Unlike other insurance providers, Budget Direct’s only interested in good drivers, which means our customers aren’t subsidising the cost of high-risk drivers,” says Budget Direct CEO Mike Weston, who commissioned the research. “So although Budget Direct was delighted with the Cannex results, we were certainly not surprised.”
But there’s more to choosing insurance than price. “When purchasing motor comprehensive insurance, considering just the price of the premium may mean consumers will miss out on a raft of rewards and discounts available, as these can vary greatly between insurers,” says Dransfield.
One of the most important considerations is what happens when you make a claim. Firstly you want an insurer with a reputation for paying claims. NSW-based NRMA for example may not be the cheapest insurer but says it pays more than 99% of claims.
The other claims issue relates to service. “Anyone who has made a claim will know that all insurance is only as good as the service and result when making a claim. This is the true test of your insurance policy,” says Lee.
“Check to see whether your insurer offers efficient claims reporting systems, assessing centres in your area and a replacement vehicle.” Talk to family and friends about their claims experience, whether good or bad, and maybe a couple of good experiences will stick out – whether relating to claim service or service in general.
It’s also important to take a close look at what is included in your standard policy. “If you ask the average member of the public ‘What is comprehensive car insurance’, they’ll say ‘If I have a crash they’ll fix my car’,” points out Weston, but there may be subtle differences in policies you don’t realise – some will cost extra, some will be standard.
Let’s take a look at some of these “extras”. Find out if they are included, how much you’re covered for and whether this costs you extra.
- New-car replacement. If you have a brand-new car and it is “written off” in the first 12-24 months the insurer will replace it with a new car that is the same make and model.
- Choice of repairer.
- Lifetime guarantee on repairs.
- Emergency expenses.
- Car hire.
- Trailer damage.
- Personal effects cover.
- Free windscreen replacement.
- Travelling expenses.
- Replacement of locks and stolen keys.
- Accidental death.
- Rating 1 protection. one claim if you make two in the one period it will probably affect your discount.
For the complete story see Money Magazine's June 2006 issue. Subscribe now.
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