Insurance premiums are rising faster than they have in 23 years and I have never seen people so angry about the cost of coverage. But not all is lost.
Unfortunately, there is no silver bullet. But I’ve put together a list of 15 things you can try to reduce your premium.
Some of these tricks won’t make sense to you. However, one or more of these strategies could save you hundreds of dollars on one policy, if not thousands, across multiple policies.
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1. Don’t pay for your renewal automatically
About 2 in 3 of us do this and it allows insurance companies to increase the premium each year while (in the case of car insurance) they reduce coverage.
This is known as a “price march” or “loyalty tax” and is now banned in the UK, but is still common here.
2. Make a ‘mystery shop’
Mystery shoppers are secret shoppers hired by store owners to evaluate their staff and report on their customer service.
But you can be a mystery shopper for your insurance company by visiting their website or calling them and getting a quote as if you were a new customer.
Research says new customers pay 25 to 35 percent less on average because of the “loyalty tax” charged by insurers.
But if you get a quote from a new client and catch them charging you more and then ask them to match it for your renewal, they’ll often play along.
In the worst case scenario, you may be able to cancel your policy and simply start a new one at the lower price.
3. Get a quote from one or two “challenger brands”
These are the smaller, price-focused brands that are trying to gain “rusty” customers from the big guys, so they have to try harder.
Try Budget Direct, Woolworths Insurance and new provider Aldi Insurance, for example.
4. Try a comparison site
These have a bad reputation in insurance, because the big brands (NRMA, RACV, AAMI, GIO, Apia, QBE, Allianz, etc.) refuse to appear on them.
Therefore, you can only compare the smallest providers. And?
They are still a good money-saving weapon and are easy and free to use, so make them part of your arsenal. Try Compare Club, Compare the Market, Finder or Canstar, for example.
5. Also collect refunds when you switch
The big cashback sites are now getting into the insurance sector too.
You may be able to collect another $70 or 7 percent of your premium if you click to take out a new insurance policy through a cash back website. It’s worth checking out!
6. Adjust your excess
This is the amount you will pay if you have to file a claim.
A higher excess means a lower premium and vice versa, so it’s a balancing act.
But this is an option if you need to save.
7. Adjust your ‘sum insured’
This is also a trade-off, but it may be a way to reduce your premium.
If it’s a car, you can choose between “market value” (which is fixed) or “agreed value” (which you can adjust).
If it’s a house, you can change the amount you think you’ll need to rebuild it or replace the contents.
Use online calculators to test the value of your car, home and contents and make sure you are not OVERinsured or UNDERinsured.
8. Discounts for multiple policies
Some insurers offer you, say, a 15 or 20 per cent discount for taking out multiple policies, so it’s worth checking.
But don’t assume that makes it cheaper: sometimes they increase the price so much before applying the discount that it doesn’t make much difference.
9. Discounts for people over 50 years old
Again, don’t assume these will cost less, but check.
If you are over 50 years old, some insurers give you special treatment.
Apia and Truecover, for example, ONLY offer cover to over-50s, while NRMA has a product called Home@50 that does not require you to pay a basic excess if you make a claim.
10. Eliminate upsells
Insurers include all kinds of benefits in some policies, which increases the price. They will offer you engine breakdown coverage, portable contents coverage, windshield coverage, accidental damage coverage, additional rental vehicle coverage, etc.
Ask yourself if you really need these “upsells” and eliminate them if you don’t.
11. Good discounts for drivers
Some insurers offer discounts to drivers with no claims.
I have seen this happen on CTP Insurance in New South Wales for drivers with no demerits compared to the government site here.
So if two people drive the car, make the “main driver” the one with the best driving record and see if the premium goes down.
12. Limit the kilometers
Do you only drive 5,000 or 10,000 kilometers a year? Tell the insurance company! They will usually reduce the premium.
13. Limit drivers
Doesn’t anyone under 30 or 40 drive your car? Again, tell him! Younger drivers and much older drivers are statistically riskier, so excluding them will save you.
14. Downgrade
There are several types of car insurance, and downgrading from comprehensive to “third party fire and theft” will save you hundreds if you don’t need full coverage. Or are you paying $2,000 for comprehensive insurance on a $5,000 car? At some point, the sausage may not be worth it, as they say.
15. Sign my petition to end insurance price gouging.
It now has more than 12,000 signatures demanding three simple government reforms that could facilitate savings on coverage.
Joel Gibson is the author of EASY MONEY and regular guest on TODAY, 2GB, 4BC and ABC Radio. He posts daily about money to over 25,000 followers on Tik Tok & instagram. This is just general advice. It does not take into account your specific needs. Consider your own situation before making financial decisions.
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