How to save money on your insurance

Oct 22, 2019
Insurance policies can be costly, but they're often necessary, so every little helps when it comes to potential savings. Source: Getty.

While insurance is not always a compulsory purchase, it can do wonders for your peace of mind, whether it’s cover for an upcoming overseas trip or private health insurance to ensure all of your medical needs are taken care of, should any issues arise. However many Australians could be paying more than they need to for their insurances, as the majority of people simply stick with what they know and don’t bother shopping around for a better deal.

Alarmingly, a study conducted earlier this year even revealed that Australians were more likely to get divorced than shop around for a cheaper insurance policy at renewal time. The research, carried out by Roy Morgan research found that more than three quarters of all policies were renewed with the same company in 2018, without customers even approaching other providers for a quote.

If you’re paying through the nose for home, car or travel insurance, you could stand to save a substantial amount by following these simple tips and shopping around for a cheaper policy.

Use comparison websites

The best way to secure a better insurance policy is to shop around and compare deals online. There are several websites out there to help you do this quickly and easily, the most well-known being Compare the Market and All you need to do is input your details and the websites will do all of the hard work for you, crunching the numbers to find the best prices according to your needs and preferences.

Prices can vary hugely across providers so make sure you look at available deals from a handful of companies before making your selection and, if you’re looking to save money, definitely don’t just accept the renewal offer from your existing provider without checking whether there are better deals available – as there often is.

It’s also important to remember that prices can vary wildly due to any add-ons or extras you include, for example the amount of voluntary excess you select when pricing up car insurance can make a huge difference to the premium you pay. But remember, this could come back to bite you should you need to make a claim. With health cover, you also need to consider whether you have any pre-existing health conditions that may drive the price up. In these cases, it can really pay to shop around.

If you aren’t internet savvy though, there’s no need to fret, as comparison companies also have hotlines you can call for assistance.

Take advantage of deals

While you’re shopping around for the best deal on the market, you will most likely notice that many providers are now offering discounts and rewards for buying your cover online. According to Canstar, some insurers will offer as much as $50 off the premium price, while others offer a flat 10% discount.

Only pay for what you need

With so many different types of policies to choose from and a seemingly endless list of possible inclusions and add-ons, it can be easy to end up with more cover than you actually need. Making sure you are only paying for what you need can save you a lot of cash in the long-run, so make sure you read the PDS carefully and know exactly what you’re getting before you fork out for insurance.

There’s also the option of only taking out cover that you absolutely need to have, for example do you need full comprehensive cover for your car? Or is your vehicle older, meaning that Third Party Insurance would be enough to cover you should you damage another car. Other types of insurance available include home insurance if you own your property and contents insurance if you are renting.

While other insurance such as private health cover are purely optional, however you won’t regret having it should you fall ill or require costly medical treatment down the line. The same goes for travel insurance too, as while you may never need to make a claim, you never know what’s around the corner and having sufficient cover can give you peace of mind, allowing you to enjoy your holiday to the fullest.

Better the devil you know?

Earlier this year, a poll of Starts at 60 community members revealed that a whopping 65 per cent of over-65s have never switched providers. While 35 per cent of respondents admitted to switching at some point during their adult life, 43 per cent of those said they had done so more than once. And just one savvy reader admitted to changing their policy every single year in a bid to secure a better deal.

One community member said: “Rather the devil I know I’ve been with the same fund over 40 years [sic].” And another commented: “It’s the pre-existing illness trap that’s stopped us changing. It’s getting unaffordable though but with cancer surgery and chemo I am now actually getting back a lot of money we’ve paid in over the years.”

While another said: “I receive excellent benefits and dealing with the staff is a pleasure, why change when the rates are good too?”

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

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