Driving Best Deal
Newcastle Herald
Monday June 17, 2002
There are hundreds of car insurance policies on the market, and you should shop around, says Gayle Bryant.
THE difference between quotes for car insurance can be considerable ? sometimes hundreds of dollars ? so it is vital you compare prices and policies before committing to an insurer.
There are three ways to shop around for car insurance: by phone, the Internet or by using an insurance broker. There are hundreds of policies on the market and each insurer has its own criteria in determining insurance premiums.
Some may place more emphasis on your postcode, age or sex while others place it on whether your vehicle is garaged and the type of car you are driving. It is usually a combination of all these factors that determine what you pay. The higher the risk, the higher the premium.
Key determinants for what you pay:
Make and model of your vehicle.
Age of your vehicle.
Whether its for business or private use.
Daytime location of your vehicle.
Where your car is garaged at night.
Age of drivers.
Driving record.
Insurance experience.
Occupation.
Whether the car is financed.
Whether anti-theft devices are installed.
Number of kilometres travelled each year.
MARKET V AGREED VALUEWHEN you insure your car, it will either be for its market value or an agreed value.
Many insurers opt for the market value. That is the price they can get for the car in its current condition at the time of a claim. If your car is not a popular model at the time you are making your claim, the market value will be considerably less than if it is the must-have car of the week.
Agreed value is the value that you have agreed with the insurer that should be paid out in the event the vehicle is written off. Some insurers give you the choice of the two, others don't. Agreed value insurance costs more than market value insurance.
REDUCING YOUR PREMIUMTHERE are many ways to avoid paying high premiums for your insurance, from building up no-claims bonuses to taking out several different insurance policies with the same insurer.
Before you buy a car, make sure it has a low premium rating.
The two key factors that can push up premiums are the likelihood of theft and the cost of repairs.
If you buy a car at the top of the must-have list for car thieves and joy riders and you live in a suburb with a high crime rate, it's likely you'll be a prime target. And you'll pay the price of this in premiums.
Equally, if you buy a car that is expensive to repair ? these usually include European models ? you may find you're paying top dollar.
Before you buy your car, check out the premium with insurers and/or your local motoring organisation. NRMA's Open Road magazine, for instance, lists the latest premium guide for cars.
WHO'S THE DRIVER?AGE is a major criteria in determining the price of your insurance policy. The younger you are, the higher risk you are perceived as being to car insurers.
Most insurers either ask you to pay a higher excess and/or apply a higher premium if the driver of the car is less than 25 years old. Some insurers are more lenient for women because statistically their driving record is better.
SECURITY MEASURESTHERE are a number of security measures you can take that may reduce your premiums.
Installing an immobiliser or a full metal jacket (it fits over your ignition so prevents tampering with the lock) are two measures insurance companies reward through lower premiums.
Completing a defensive driving course can also reduce the amount you pay in car insurance, as is installing a tracking device. This article is based on the Car Insurance Guide found on the MoneyManager site at www.moneymanager.com.au. Log onto the guide for more information.
© 2002 Newcastle Herald
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