How To Compare Car Insurance Quotes

car insurance companies overviewThe Australian car insurance industry is incredibly competitive and as a result, even going out and getting car insurance quotes is a nightmare! Then of course once you have the quotes, you have to know how to compare car insurance quotes to work out what the best offer is for your individual circumstance.

Really, who can be bothered right?

Well, it actually does pay to know what to look for because not only does it save you a boat load of time, but it can also save you a nice chunk of change on your insurance policy.

One of the great things about Australian insurance laws is that they require companies to clearly outline the inclusions and exclusions in a product disclosure document making it a little easier to evaluate the best option.

This is certainly helpful, but still takes some work to read through. With that in mind, before you go through the arduous process of evaluating the various motor vehicle insurance quotes, let’s have a look at what you should be comparing

First, make sure you are comparing apples with apples and comparing the same type of insurance. If you are unsure of what type of insurance you need, take a look at our comprehensive car insurance options overview.

8 things to look for in a car insurance policy:

Your choice of repairer: Some companies will not allow you to source your own repairer. It’s nice to have some flexibility so make sure that you do have this option. The last thing you want to be doing is having to sell your car at a cash for cars company as scarp metal!

Tip: Also, check the terms related to this option as some policies that allow a choice of repairer have clauses stating that if you do not use one of their authorized repairers, the lifetime repair guarantee is voided.

Emergency accommodation and travel coverage: Most comprehensive policies will cover you for accommodation and emergency travel costs if you have an accident more than 100 kilometers from home. This is a handy benefit, particularly if you travel on country roads often.

Tip: Check the actual dollar figure that you are covered for. Policies will also stipulate an amount that they will cap coverage at (e.g. $500). If you are 200kms from home, need to stay a night in a hotel and catch a taxi home, the bill could easily surpass that.

Car hire: Imagine what you would do if you were stuck without a car for three weeks! For most people, it would be a nightmare and the only way to cover it would be to get a hire car, which would easily creep over $1000 for a two-three week loan.

Tip: Check the number of days that you are covered for. Common duration of coverage are 14 days, 20 days and 21 days. Also check if there is a dollar figure that it is capped at ($75 per day for example).

Cover for young drivers: If you have family members that are under 25 years old in particular, make sure that you compare the policy inclusions and exclusions. Sometimes you will get cover but a huge excess, whilst other policies will not provide coverage at all.

Tip: To save money, take out the policy in an older driver’s name and simply list any younger drivers as additional drivers. For more tips on how to get cheap car insurance, view our top 10 tips to save on car insurance guide.

Theft: Make sure that you compare the theft coverage as many polices do not provide adequate cover for the types of items that we commonly leave in cars (computers, tablets, sunglasses etc).

Tip: If you religiously remove valuables from your car when you leave it, cover for theft may be something you can do without and therefore save some money.

Key replacement: The keys and locking systems of newer model cars can be very expensive to replace and we have all experienced the loss of keys at some stage. It is not only a pain to do without the keys for a while, it is also a massive pain in the wallet to replace!

Tip: Ask your car dealer about the approximate cost for replacing keys and when contrasting the various quotes you receive, ensure that you are well covered.

Towing conditions: What happens if you are towing a trailer and it is damaged in an accident? Worse still, what if the trailer is a hire trailer? Be sure to compare the conditions that are attached to any towing coverage because these tend to vary a fair bit.

Tip: Polices will stipulate a maximum trailer weight that is covered and also a dollar figure of coverage. Ensure this is sufficient in the event your trailer is written-off.

Miscellaneous cover: Some other handy things to compare include coverage for replacement baby capsules and car seats that are damaged, cover for replacement clothes, some policies will even provide you with a payment to cover the cost of replacing groceries that spoil. With cycling becoming increasingly popular, be sure to check on what the scenario is for if you have bikes attached to a bike rack and those are damaged in an accident.

Tip: Some of the extra inclusions in policies are a bit “gimmicky”. Remember that the market is very competitive so anything the insurers can throw in front of you to provide perceived value is generally there to get the sale over the line. Always ask yourself the following questions when picking and choosing between different policy inclusions:

  • Do I have a need for that?
  • What are the potential ramifications if I exclude it?
  • Is it worth paying a little more per month to get a little extra cover?

How many quotes should you gather?

Most people would lean on the old “three quotes theory”, but I personally suggest comparing five different insurance providers. The extra time it takes to get an insurance quote on line from two additional companies is minimal and will help you to save in the long run.

Once you have your five quotes, go through the 8 tips above to compare car insurance quotes for their inclusions and exclusions. Narrow it down to a final two and then haggle with the insurance companies for cheapest deal on your third party insurance or comprehensive insurance!