How to compare car insurance to find the best policy for you
If you're a regular driver, a good car insurance policy can grant you peace of mind. With so many providers and policies on the market, dipping into the policy pool can be confusing. Use this guide for tips on how to find the best, cheapest car insurance for you, whether comprehensive or third party.
Should I get car insurance?
Car insurance may seem like a hefty expense. This can especially be the case if if you’re a young or a new driver, or you pay your car insurance premium in one lump sum. However, unforeseeable accidents do happen, and unless you can afford to pay for repairing another driver’s car outright (which can cost thousands), a good car insurance policy can save you from paying through the nose in future.
There are budget providers along with the better-known household names of insurance companies. You can also opt for a more affordable type of policy rather than comprehensive car insurance, which is pricier. With such a wide selection of policies and companies on the market, you're bound to find something that suits you.
Types of Car Insurance
Short for Compulsory Third Party Insurance, this is the mandatory insurance you must purchase before you’re legally allowed to register a car. In NSW, you need to independently select and buy your CTP, compared to other states in Australia, where it’s included in the cost of your registration.
Having CTP car insurance means that if you get into an accident and the other driver sustains injuries, you won’t be held liable. Also, it will cover hospital expenses for the other party. It covers personal injury only. Your green slip won’t cover damage caused to property – namely, your car or another person’s car.
In NSW, there are five licensed greenslip providers to choose from: AAMI, Allianz, GIO, NRMA Insurance and QBE. In Canberra, there are four providers: NRMA, GIO, AAMI and APIA. In South Australia, there are also four: AAMI, Allianz, QBE and SGIC.
CTP Insurance is included in the cost of registration for the following states and territories: Victoria, Queensland, Western Australia, Tasmania and the Northern Territory.
Not to be confused with Compulsory Third Party, this is the most basic level of optional cover. Third Party Property Damage insures against damage caused to another vehicle, by you. It doesn’t protect you against theft or damage caused to your car.
Best suited to drivers who:
Don’t want to foot the bill for someone else’s car repairs from their own pocket, and
Would prefer an insurance option significantly cheaper than comprehensive cover, and
Aren’t too concerned about their own car, as it’s not covered under this policy. This might be suited to drivers with cheaper, older cars they’re not sentimentally attached to - with the exception of vintage cars, which are usually expensive to insure.
This level includes everything provided by Third Party Property Damage Insurance. It additionally covers you if your car is stolen or burned. In limited cases, third party property, fire and theft insurance can cover you if you aren’t at fault and your car incurs damage caused by an uninsured driver.
Best suited to drivers who:
Want a higher level of cover than Third Party Property Damage Insurance, but can’t quite afford comprehensive car insurance.
Are concerned about the safety of their car, either due to location or time of day, it's parked.
Are interested in Third Party Property Damage cover, but are also seeking a baseline level of protection for their own car.
As the top level of car insurance, a comprehensive policy offers the most protection for your car. It will cover you for everything included in the other two optional policies, and more.
This commonly includes: intentional or accidental damage to property (your car and another person’s car, regardless of fault), loss or theft of your car, vandalism, weather events such as storms, floods, fire and hail, and in some cases hire cars and emergency accommodation (The specific inclusions and exclusions will depend on your unique policy).
It's worth getting comprehensive car insurance if:
You prefer to protect your car and wallet from the widest range of possible misfortunes that could happen.
You're prepared to pay a little more than you would with another insurance type - comprehensive is the most expensive cover for your car.
Tips for comparing car insurance
Be clear on your excess.
While it may be tempting to automatically select the cheapest car insurance policy, this isn’t necessarily the best financial decision. Lower-cost premiums equate to a higher excess, sometimes upwards of $850. If, in the event of an at-fault accident, you won’t be able to afford this expense in one hit, consider a higher premium.
Read the Product Disclosure Statement, or PDS.
Let's face it - the majority of these are a bit long and boring. But having an informed understanding of the terms of your policy is worth it and can save you unwelcome surprises in the future. A portion of 1 star reviews of car insurance policies on ProductReview.com.au involved pain points that could have been avoided if the PDS had initially been carefully assessed.
A PDS should explain your excess and spell out in detail what you are entitled to claim under the policy. This includes any add-ons you have opted for. It should also cover policy exclusions, information about claiming, as well as contractual information about a cooling off period or policy cancellation.
Don’t be afraid to shop around.
Compare, compare, compare. You don’t even need to pick up a phone; simply fill out online car insurance quote forms from a variety of companies. Compare both the cost and quality of cover as outlined in the PDS. Selecting a car insurance policy shouldn’t be a rush decision, as it can have considerable financial impacts down the line.
Review your policy annually
While it can be extremely tempting to click ‘Renew Now’ when you receive an email about your car insurance policy's imminent expiration, you'll most likely be paying more than you need to.
Often insurers make their renewing customers pay more than new customers. After a year with an insurer, first-time customer discounts no longer apply, and insurers unfortunately don’t apply discounts for customer loyalty.
As a result, the ‘Renew now’ option has been dubbed as ‘the lazy tax’ incurred for not shopping around. It might not be as convenient as clicking a button, but you’re much more likely to find a better deal.
Look for discounts
If you’re asking ‘How can I get the cheapest car insurance?’ keeping an eye out for discounts is one of the best ways.
This is particularly the case if have an automatically higher premium due to your demographic (for example you're a male under 25) or your circumstances (for example, you're the driver of a European, sports or vintage car). As a general rule of thumb, if the annual amount you pay for car insurance is higher than 10% of your car’s value, you’re paying too much.
Discounts can be applied for:
- Restricting the number of drivers using your car
- Restricting the age of people driving your car (e.g. no under 25s)
- Restricting the number of kilometres you drive using the vehicle, sometimes known as a
- Making no claims for a certain number of years – referred to as the 'no claims discount' or 'safe driver bonus'
- Taking out additional policies with the insurer – known as a ‘multi policy discount.'
Conversely, if you prefer extra features or protection in your car insurance that’s also available - either as part of the policy package, or as an optional add-on for an extra cost.
Included Benefits or Optional Extras can include:
- – reduces out-of-pocket expenses when you hire a rental car, after your car is damaged or stolen
- Car insurance with roadside assistance - offered as an or as part of your policy
- Windscreen cover - offered as an or , or an or .
- – which may be worth it when the cost of repairs exceeds the car’s market value. If your car is 1-2 years old and it’s stolen or written off, this entitles you to a replacement car of the same value.
Thanks for reading, we hope that this guide helps you choose the best car insurance policy for you, so you can enjoy driving your car confidently, knowing it is protected.