‘Skyrocketing’: Tips for saving on car insurance as premiums spike

Car insurance premiums are rising, but there are ways to avoid the worst of the squeeze.

Car insurance premiums are rising, but there are ways to avoid the worst of the squeeze. Photo: TND

Rising insurance bills have become the latest inflection point in the cost-of-living crisis as Australians get slapped with higher premiums since crushing natural disasters.

Car insurance premiums have spiked 10 per cent over the past 12 months alone, according to figures from comparison site Finder, with the insurance industry trying to recoup billions in costs.

More than half of motorists have suffered a squeeze on their last renewal notice, according to Finder’s insurance expert Gary Ross Hunter, who says there’s unlikely to be any relief soon.

“Insurance is skyrocketing,” Ross Hunter said.

“In 2022 we had the two most costly insurance events ever recorded across the country … [there were] $7 billion in insured losses.”

Luckily, there are ways to take the edge off and save some money on your next renewal.

Watch out for sneaky price hikes

The first step is to review your existing cover as it comes up for renewal and work out whether it’s meeting your needs and if there are any sneaky price hikes the insurer is trying to pass on.

Ross Hunter said you need to be on the lookout for a reversion of any discounts you received when you purchased your car insurance last year, because that could be a significant increase.

“You can get sign up discounts for 10 to 15 per cent off, [but] after the first year insurers often jack the price up significantly,” he said.

Don’t pay a lazy tax

If your bill is increasing, either because a discount has lapsed or your premium is just rising, then it’s time to consider if you could get better value with another provider.

It might seem like a laborious task, but spending half an hour looking through alternative cover could save you big time, Ross Hunter said, with insurers taking advantage of lazy customers.

“We’ve found there was a difference of over $1600 between the cheapest and most expensive comprehensive car insurance policies,” he said.

“Go and get at least four to five quotes.”

When considering what cover you may need, stick to comprehensive insurance to ensure you’re not going to get caught out in an accident, or even if you need minor repairs.

But within that sphere there are several decisions you can make to save extra money, Ross Hunter said.

Consider a higher excess

First, think about how you want to tune your excess amount.

Choosing a higher excess fee can reduce your premium and if your vehicle requires major repairs after an accident most of it will still be covered.

But there are risks, including making minor repairs more expensive.

“It makes small claims pointless, but for the big stuff and your premium it’s going to help,” Ross Hunter said.

Age restrictions

Another thing you can consider is whether age restricting your policy could save you money.

Insurers often allow you to set a specific age range on your cover, such as 35 to 40 years old, which can reduce your premium because the insurer has confidence a lower-risk demographic is driving.

This suits motorists who don’t have children that may drive their car, though beware – if a younger friend or relative does jump behind the wheel, the vehicle will no longer be covered.

Kilometre-based coverage

There are also discounts available for people who need comprehensive insurance but don’t drive much, with some providers offering to cover on a per kilometre basis.

This may suit people who commute during the week on public transport and only drive on the weekends, because it means you won’t be paying for cover you aren’t actually using.

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