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What should you look for when comparing policies?
Cars are a big expense, especially when it comes to insurance. Whether you’re buying insurance for the first time or your policy is due for renewal, you should always start by comparing your options. But where to start? Here are five things you should consider when comparing your car insurance options.
The cost
Cost is the first point of comparison for people when comparing policies because it’s the simplest way to compare, ie policy A costs more/less than policy B.
While you might think getting a bunch of quotes isn’t worth your time it can save you a bundle in the long run as insurers price risk differently. These risks can be as obvious as your age or as subtle as the colour of your car (yep, some insurers factor that in). What matters is that you can get quotes from two insurers and get wildly different premiums.
Renewal options
If you’ve already got a policy, you might be inclined to stay with the same insurer and auto renew your policy each year. This is called the lazy tax and could cost you a bundle.
Up until recently, insurers didn’t need to let you know how much more you’d be paying for your cover each year, with some returning customers paying almost 30% more for their insurance policies than new customers.
While insurers will now be forced to spell out how much your policy it’s going up by, it just reinforces the need to make sure you compare your options each and every year and never just set and forget your policy.
No claims bonuses
If you think you will be inclined to stay with an insurer for the long haul, make sure they offer no claims bonus. Basically a no claims discount rewards safe driver (those that don’t make claims) against their policies with discounted premiums. These discounts normally cap out around five years into a policy.
Excess options
One area often overlooked when getting car insurance is the excess, that is the amount you’ll have to pay if you need to make a claim. When you’re comparing policies, make sure the excess amounts are the same as a policy with a lower excess will generally have a far higher premium.
Nominated driver
If you know that you’re not going to have another person driving your vehicle or anyone under the age of 25 behind the wheel, you should look for a policy insurers you as such. Look for an insurer that has a nominated driver options. Basically you’re saying to your insurer, it’s just me behind the wheel and no one else, which can net you a cheaper premium.
Richard Laycock is an Insurance Expert at Finder