10 ways to lower your car insurance premium

cheap car insurance ratesThe cost of insurance in Australia is fast becoming out of the range of affordability for people and premiums are heading upwards at an alarming rate.

There are a number of factors that have contributed to the price rises, including the spate of recent environmental disasters such as the back to back Queensland Floods and Cyclone Yasi to name just a few.

The global economic climate has also caused wide-spread pain for companies that are involved in the business and finance sector.

Now more than ever in Australia, it is important to know how to save on household expenses and to also safeguard your financial future by ensuring that you have an adequate financial safety net by way of insurance.

Before diving in to how to get the lowest interest rate available, let’s first cover the three types of car insurance that are available to Australians.

Comprehensive Car Insurance: As the name suggests, this is the most complete form of motor vehicle insurance available on the market. Comprehensive car insurance covers you for damage and expenses related to medical expenses, repairs and replacement vehicles for both you and anyone involved in your accident. It also covers you for fire damage and theft.

Third Party Car Insurance: This covers you in the event that you are involved in an accident that causes damage to someone else’s property. It does not provide cover for your car’s damage, but at least if you are covered if hit a luxury vehicle.

Third Party Fire and Theft Cover: This will cover expenses related to fire and theft of your car plus damage that your stolen car may cause to someone else’s property.

10 ways to lower your car insurance rate:

Get the right cover: A simple way to pay less is to go for lesser cover. If you have a car worth under $5000 for example, sometimes it is actually not worth paying for Comprehensive Car Insurance as the premiums you pay each month may quickly add up over a period of years to amount to more than the total value of your car! If you are in this situation, just getting Third Party Property Insurance might be the way to go.

Shop around: Take a look at this article here, as I have broken down a great deal of information about some of the top Australian insurance companies, including the types of inclusions in their policies. When it comes to insurance, it certainly does pay to shop around to get a great deal.

Evaluate yearly: The insurance industry is changing all the time and just because you got cheap car insurance rates on your policy this year, doesn’t mean it is going to be the best insurance rate deal next year.

Buy insurance online: Online insurance rates are the best you can get as you are usually rewarded for signing up for a policy online. The discount you can expect is as much as 10% off.

Pay upfront: You can also secure a discount if you opt to pay your insurance upfront for a year in advance. Some people will not have the spare cash available for this, but if you can afford the upfront investment, you can certainly save further.

Look for bonuses: Many Australian insurance companies offer incentives for new policy holders. As an example, Coles offers fuel discounts and various other perks for signing up for their comprehensive insurance policy.

Only claim when necessary: The rates you pay will increase the more times you make a claim. In fact, in many instances just a single claim can result in a premium hike the following year. If the amount you are going to claim for is manageable for you to cover direct as opposed to using your insurer, this may be a way to keep your premiums lower.

Type of car: Obviously, the more cover you need, the higher the monthly insurance costs are going to be because your policy needs to cover replacement of your vehicle in the event that it is written-off. If you are tossing up between two different models and are looking to save money, not only can you save on the actual cost of the vehicle and the car loan repayments (if you take out a loan), but you can get additional savings in addition from lower insurance.

Policy holder: Given that males are statistically more prone to accidents and insurance claims, females are offered lower-cost insurance. If you are applying for insurance as a couple, listing the policy in the female’s name and registering the male spouse as a listed driver is a great way to save.

Bundle your insurance: A final way you can save is to have multiple insurance policies with the same insurer. If you have home and contents insurance, income protection, life insurance or even funeral insurance, you can bundle them together and get some nice overall discounts.

Getting cheap car insurance rates is just about knowing the tricks and tips. Use the 10 tips above to your advantage and save on your next insurance policy.