Car Insurance Premiums and States

Finding the Cheapest Car Insurance

Feb 11, 2008

The cost of car insurance premiums not only varies by state, but also by the location of consumers within each state. The major reason for the variance, is the risk perceived by the insurance companies. This article will explore the findings of a recent survey into car insurance policy costs that was conducted by CANNEX which is a respected independent specialist research company widely used by governments, financial institutions, and the media. During their investigation, CANNEX not only found discrepancies between the costs of like policies between states, but also found that some particular consumers within states were paying even more for their policies than the adjusted state prices would suggest.

New South Wales has the highest policy prices of any Australian state due to higher population density. Dense population increases the chances of not only accidents occurring to the vehicle, but also the likelihood of the vehicle being stolen. The study found that residents of New South Wales pay on the average 68% more than the national average for car insurance policies. They also found that men under the age of 25 were paying up to $1,879 more for their coverage. The cheapest quote obtained by CANNEX for this age group was $899, while the most expensive quote they obtained was $2,777. The average quote for males under 25 was $1,775.

Victorian motorists also pay above the national average for car insurance due to the large population of the state and the associated risks involved. Victorian motorists, on average, pay 8% more than the national average for car insurance. Young men and women under 25 can both save over 55% on their premiums by comparing offers, while families (parents with young drivers) in Victoria can be asked to pay up to 60% more for comparable policies from different insurance companies.

Queensland motorists pay on average 12% less than the national average, although the figures show that all motorists in Queensland have the potential to save an average of 49% on their premiums by comparing quotes, with the average saving to the consumer being $560. Young men are again being asked to pay the biggest discrepancy in prices, with possible savings available of $850.

South Australians pay 18% less than the national average for their car insurance policies, but the study showed that all drivers could still achieve savings of more than 36% if they are prepared to compare the prices being offered. The group who stand to make the largest savings in South Australia are the car connoisseurs who can make a potential saving in dollar terms of $604.   

 Western Australians also pay 18% less than the national average, with an average potential saving of $456 overall. Young drivers could potentially save over $700, while mature drivers in WA have the smallest potential of savings of any of age group in the country at $276.

Tasmanian drivers pay 33% less for their insurance premiums than the national average. However Tasmanians should shop around as potential savings of nearly 50% can be achieved by many sectors of the market. Young Tasmanian drivers are asked to pay more for their insurance than many young drivers throughout the rest of the country.

These findings are not surprising as most Australians have always known that people living in metropolitan areas tend to pay more for car insurance especially in such density populated cities such as Sydney and Melbourne. However, the report does provide concrete statistics which could be reviewed when choosing your car insurance policy.

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Cheapest Car Insurance - Does it Really Exist?

Dec 7, 2007

The short answer to this question is YES! The long answer is that you will have to be prepared to do your homework and spend some time researching various companies and policies to ensure you really are getting a bargain and getting the policy you want at a reasonable price.

The car insurance market in this country is getting more competitive all the time and this competition is translating into price reductions on insurance all over Australia. Traditionally, however, Australians have been very loyal customers to their chosen insurance companies and have not always taken advantage of offers made by other companies. Be honest. Haven’t you been guilty of just signing the renewal and sending off the check to your existing insurance company without shopping around to find out if you can get a better deal? I am not ashamed to admit I have been guilty of this for years.

A recent study by CANNEX, a well respected independent research company, has shown that savings to the average consumer of 40% or more are possible all over the country.  CANNEX surveyed hundreds of different products provided by numerous different insurance companies in every state of Australia (they did not survey the Northern Territory and assumed the ACT would reflect NSW figures.) The variances between the top quotes they received and the cheapest quotes for drivers of a particular age were huge. In some cases, the dollar differences between the quotes for the same products for the same drivers were nearly $1000. The CANNEX survey included all drivers from under 25 years, old men and women, through to senior drivers and even car connoisseurs (those people with expensive luxury vehicles.) They found that every group of consumers in every state could make savings on comparable products by shopping around.

A warning for people who are looking for a bargain on their insurance. Real savings can be made, but ensure you are comparing like products and are not comparing apples with oranges! When you get a quote, make sure of what is covered and just as important, what is not covered!  When you find a cheaper product, you need to be sure that it really is a cheaper quote for the same product, and not an inferior product that does not offer you the same level of protection. Likewise, you may find a product at the same price or a slightly higher price, that offers you benefits that you are not entitled to under another policy.

Many car insurance companies now offer quotes on the Internet where you type in the relevant details and are then provided with a quote for the policy. A good suggestion is to obtain quotes from as many companies as possible in order to narrow your choices down to a short list that you can then research further as to the details and inclusions or exclusions of the respective policies.

One last suggestion. In order to save on your car insurance costs, approach your current insurer and ask if they can match or even improve upon a cheaper quote you have obtained from another company. You’ll never know unless you ask!

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"Buyer Beware! What to Avoid when Searching for Car Insurance"

Dec 2, 2007

In the current economic climate (rising interest rates and higher fuel prices), we are all trying to get the best value for our dollar. Car insurance is an area where there are significant savings that can be made, but often at a cost.

The main consideration when looking for cheap car insurance, is what do you get for your money? Is a policy that saves you $100 a year really a saving in the long run if they won’t pay you a reasonable value for your car? Ask any insurance company what they consider the value of your car to be before you sign the contract. You may be unpleasantly surprised when you learn the price range they are willing to pay if your car is written off. You need to be sure that the bottom value they quote is as close as possible to what you believe your car is worth. If the range offered does not meet your expectations, you may need to inquire about obtaining an “agreed value” policy – this will cost you a little more, but at least you will know that you have enough money to replace your car if it is written off.

Many people try to save money when buying a policy by reducing the amount of extras they purchase. Cutting unnecessary extras can save you money, but be careful what you forego. A hire car for a certain period of time while your car is repaired may be unnecessary for someone who has easy access to public transport, but if you live in a rural area, or you are disabled or have small children to transport, it may be necessary for you to have access to a vehicle and the cost of hiring the car yourself will far outweigh any “savings” you achieved by not taking this option in the insurance.

The customer service you receive from the company you buy your policy from should also be consideration when buying cheap car insurance. Will they take your claim over the phone or do you need to spend hours filling out paper work or worse. For example, do you still have to lodge the claim in person at their office?  Will they make you feel like a criminal or a valued customer when you lodge your claim?

Does the company you are considering have good or bad reviews from other consumers? Ask your friends and family if they have ever had any dealings with the company, or search the Internet for feedback or complaints about them. You will find many sites on the web, including this site,  where this sort of information is available.

The basic advice when searching for cheap insurance is to decide on your minimum  requirements from the policy, and read the fine print to ensure that the policy you buy will meet these requirements. In general, always read the fine print so you know exactly what you are and are not covered for, and if you don’t like what you see, walk away and research another policy and or insurance company.

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Car Insurance the Henry Ford Way (any colour as long as it's black)

Are there Genuine Differences between Car Insurance Companies?

Nov 21, 2007

The basic policies of major car insurance companies are all remarkably similar. The differences only become obvious when you look at the policy cost and the extra benefits you receive from a particular insurance provider.

If you sign up for comprehensive insurance, you may be offered the availability of a hire car for a certain amount of time while your car is being repaired, or until your claim is paid out, or if your car is recovered in the event of a theft. The period that this hire car is available may vary between companies, or even depending upon the policy premium you paid.

The length of the time the average claim takes to be processed may also vary between companies and it is something you should inquire about. What will you do if the company provides you with a car for 7 days, but will not finalise your claim for a month or two?

Another difference between insurance companies, is whether or not you get the choice of who repairs your car, or if you are obligated to send the vehicle to a repair company chosen by the insurance company. You may be more comfortable of the work performed by someone you know, or you may be able to find a mechanic who can repair and return your car  to you faster than the company selected by the insurance company.  Also, who pays the costs of having your vehicle towed to your chosen repairer (if they allow you to choose) or if there is a maximum distance they will pay to have the vehicle towed, requiring you have to cover the cost for the extra distance?  

Some companies offer accommodation to the policy holder if the accident occurs a certain distance from home. However, the distance from home required to qualify for this benefit as well as the length of stay in the accommodation, varies between insurance companies-- and some don’t offer this service at all.     Another difference is the maximum value covered for possessions that are stolen from inside your vehicle or damaged in the accident.

There are many add-ons and small variations not only between companies but even in the same policy depending upon whether you pay extra for them—for example you can pay extra to have your windscreen insured so that you file a claim for a broken windscreen,- it does not affect your no-claim bonus, nor will you have to pay the normal excess. The excess payable, and what does and does not affect your no-claim bonus, will also vary markedly between insurance companies.

The best advice is that you carefully read the fine print of the policy, know exactly what you are covered for or not, and what additional costs you may incur, before you sign the policy.

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