No-one drives away with their newly purchased car planning to get into an accident. But the fact is, accidents do happen and it’s important to be prepared. Car insurance may be a grudge purchase, but it’s an essential one. You might be the perfect driver (aren’t we all), but you have to account for everyone else on the road. We all want cheap car insurance, but it’s good to know what you’re getting besides a low premium.
So, how do you choose the right car insurer for you?
While you might think it’s simply about picking the cheapest option available, unfortunately it’s not that simple. There’s plenty of other things to think about that factor into the overall price. You’re looking for the best value for money for your needs.
Here’s some top tips to help you out.
Take a look at the type of car you want to insure
Believe it or not, this will affect how much you pay for insurance. If you own a run-of-the mill (but no less amazing, of course) well-known and well-priced common make and model, you have a much better chance of locking in a competitive premium. On the other hand, if you’re opting for a prestige, sporty, or even eco car, then you’ll have to shop around a bit. You need to find an insurer that offers a competitive price for your make and model – and each one will be different.
Consider the different types of insurance on offer
There are a number of different types of car insurance. Go through each one and find the one best-suited to you. From there, you can shop around for an insurer that offers this type of insurance for a competitive price.
Comprehensive car insurance: this is the best cover option, but naturally the most expensive. It does include the cost of crash repairs or replacing your car – even if you’re at fault.
Compulsory third-party insurance: this provides cover against claims for compensation if you injure or kill someone in an accident. If your car is registered, then this is included.
Third party property insurance: this covers you for the damage you cause to another car.
Third party property, fire and theft insurance: this also covers if your car is stolen or burnt.
Work out your agreed and market value
When it comes to a payout if your car is written off in an accident, this is determined on your agreed value or market value. It’s important to understand what this means before choosing your insurer.
Agreed value: this is when you insure your car for a specific amount, which is in a range that your insurer will set. For example, $12,000. If your car is written off, you will receive $12,000 from your insurer, minus your excess.
Market value: this is when you insure the car for its value at the time of the accident. While this option will give you a cheaper premium to pay, it comes with a lot more risk.
Work out your agreed and market value
Some customers would like the option of choosing their own smash repairs company to fix their damaged vehicle. Most insurers out there will have this option as a standard for their consumers.
Understand your excess
Excess is the amount you pay when you’re in an accident to make a claim. A higher excess comes with a lower premium. This can be an enticing option – until you get into an accident and have to pay it.
While increasing your excess can be a good way to save money, it’s all about balance.
Hunt down ‘no claims bonus’ discounts
The exact name for this discount will vary from insurer to insurer, but it means the same thing. It’s a discount that you receive if you don’t make any claims. The amount of time you have to go without making a claim will also vary from insurer to insurer. With some companies, you can save up to 70%.
Look at other discounts offered
There are also some other ways you can secure a discount on your insurance, which is worth looking into when choosing a provider.
Many companies allow you to save money by restricting who can drive your car. For example, if you only allow fully-licensed people to drive, if a P-plater gets into an accident in your car, you’ll pay additional excess, or simply may not be covered at all.
Choosing the right car insurer takes patience and research. You need to understand what you’re looking for to help you find the best deal on the market.