Price for insurer loyalty too high
TELECOM engineer Alex Sebi was left frustrated when he went to renew his car insurance only to discover he was paying too much.
The 41-year-old had insured his 2011 Mazda 3 sedan with supermarket giant Coles for a couple of years and was stunned at the cost to continue his cover.
“My renewal was $1100 for one year for comprehensive cover, so I went back to their website and tried to renew as a new customer and the premium was then $985,” he said.
“It was shocking, so I compared online and I received a quote with Budget Direct of $703.”
Coles comprehensive car insurance quotes reward customers with a 10 per cent discount when purchased online.
And Mr Sebi’s quote when posing as a new customer had an excess of $1000 rather than his original renewal excess of $850.
He said the difference in price frustrated him and he should have been hunting around for better deals years earlier.
“I was very disappointed in myself,” Mr Sebi said.
“I rang Coles and asked them why it has to be so painful to stay with them and be a loyal customer.”
A Coles spokesman said its car insurance was provided by IAG, which set policy premiums based on several factors, including a person’s home address, excesses and online discounts.
On July 1, NSW rolled out legislation that requires car insurers to state on a customer’s renewal notice the cost of the policy the previous year, so customers can see if there’s a difference.
Financial comparison website Comparethemarket.com.au’s spokesman, Rod Attrill, said customers needed to be proactive in hunting for better deals because renewing with the same insurer did not pay off.
“You will get a good deal in the first year, but for anyone that doesn’t take the time to check each year their premium will rise,” he said. “Looking at your policy and working out if something has changed to the previous year is vital to do.”
Mr Attrill urged customers to compare their policy price annually “because it does change a lot”.
New start-up car insurer UbiCar’s spokeswoman, Carolyn Batterton, said many consumers were not willing to switch insurers.
“They just don’t change insurers so a lot of insurance companies don’t have to try that hard,” she said.
“I recommend that every year consumers call and challenge what they are paying. It’s an area that is so lucrative for the providers – you should be challenging them.”