Comparing car insurers well worth the hassle
CAR insurance premiums are one of those annual bills that many people automatically renew and, as a result, end up short-changing themselves.
My comprehensive insurance renewal recently lobbed in my inbox and unsurprisingly my insurer jacked up the cost to cover my Mazda 3.
It jumped by 6 per cent – three times inflation – to $780 for the next 12 months.
The first thing I do whenever I get a renewal is look back at what I was charged last time – after digging out the paperwork I found it was $730.
So despite being in the middle of a pandemic, barely using my car for months on end given we are in lockdown, and I haven’t made a claim in the past year, I was being hit.
This seems unfair to me.
I got on the phone to my insurer and got some longwinded explanation that there “might” have been additional claims in my area that jacked up the price. In other words, it was nothing to do with me, but I was being stung.
After a bit of negotiating for a better price, they knocked a piddling $12 off.
If there’s room to move at all and knock some dollars off, why didn’t they offer me the best price in the first place?
It’s no secret insurers rely on apathy, so if they can get away with squeezing a little more out of customers they will.
I’ve been with my car insurer for about four years and I didn’t really want to switch. They looked after me when someone ran up my backside last year.
But regardless of this, it always pays to shop around.
If you do go down this path, be alert when hunting for cheaper offers — often insurers default you to an $800 excess charge, which I think is excessive. I always pay a lower excess of $600, which keeps the cost at claim time — if something happens — to a minimum but, as a consequence, pushes up the price of the premium.
It’s also important to know whether you have an agreed or market value on your policy.
This makes a big difference if there’s a prang, as it determines how much you will get for your vehicle if it’s a write-off. For those willing to put in the leg work, insurers certainly don’t make it an easy task to hunt around for better deals.
There are a zillion questions to answer before getting a quote at the end. I understand why but this cross-examination certainly puts people off bothering to switch at all.
This time around I’ve decided to stick with what I know and stay with my insurer, but I hope it’s a warning to others not just to accept the policy renewal cost when it lobs in your postbox or email inbox.
Sophie Elsworth is the national personal finance writer at News Corp.