What your car insurance companies won’t tell you…

Most of us have been driving for quite some time, and almost all of us are insured. But have you ever wondered if your insurers are being as open as they could be about your premium? Does it seem like every year your premium goes up and you can’t tell why? It’s not an uncommon complaint and so we we have found out the secrets of the motor insurance industry so you can be smarter next time you receive a bill.

Don’t lie to your insurer

It’s tempting to “accidentally” withhold information about your driving history when you know it will reduce the costs, but giving false or misleading information is actually an offence. When you give answers to disclosure questions, it is always best to be honest, even if you weren’t at fault for an accident. On that note, what does “at fault” mean?

At fault claims

You are ‘at fault’ if you hit another vehicle or object (tree, pole, wall, kangaroo), particularly from the rear. Essentially, if the insurance company is unable to recover money from the other party (especially if they’re an animal…), then you are at fault and your premium will rise as a result.

9 times out of 10, an insurer already knows about your driving history (fines etc.) and any accident you have had but are waiting to catch you out in a lie so they don’t have to pay you anything if you make a claim.

Where you live is important

If you live on an acreage or away from a main road, chances are your premium will be reduced. But change that to living on a busy street and you can expect to be charged more. This all comes down to a complicated algorithm that motor insurance companies use to determine the likelihood of a crash or theft. They have very exact data that tells them the amount of accidents and crimes that have occurred on your street…all information that will be factored into their price. That’s why sometimes you can have a higher premium when you get your bill – there have probably been more accidents/crimes on your street, though that is just one small part of how they calculate the total.

Your car matters

Oftentimes we buy a car that suits our personality and needs but did you know that having a black car vs. a white car will increase your premium? This is because white cars are easier to see, therefore it’s less likely someone will hit you. It’s all maths in the insurance game! Also your model and make can be causing your premium to rise, especially if, for example, you had a Honda Jazz and more Honda Jazzs had been in accidents in that year. It’s advised to do your research and find a car with a great safety rating.

Car parks

When answering initial insurance questions, some insurers will ask you where you park your car. This is because cars in lock-up garages or secure car parks are a lot less likely to be stolen or damaged, whereas if you park your car on the street or in a driveway, insurers classify this as a higher risk of them having to pay out a claim. Make sure you don’t lie about this: with the advent of Google Maps, a sales representative could easily check what sort of car park you have and write it on your file, despite what you have said. They can use this information against you in the event of claim.

The history of your licence 

It really pays to be a safe and alert driver as you age as it can be easy to get points for speeding and a myriad of things. It’s a no brainer but if you have points on your licence, your premium will be more expensive. You can forget about getting the best deal you can if you’ve ever had your licence suspended or cancelled, or if you’ve been caught drink driving. Also, how many years you have had your licence will give you a better price and it makes sense – the more experienced you are x how many accidents you’ve had over that time = how much of a risk you’ll be. Additionally, if you have an international drivers’ licence, expect your premium to be sky high. This is due to different road rules/customs in other countries, so try to get an Australian licence when you can.

Renegotiate your premium

If you feel that you’ve been paying way too much to be covered, then speak up. It is always worth checking to see if you’re getting the best deal. Car insurers will do anything they can to keep you so even threatening you will leave should make them take action! Remember, you don’t have to accept your bill and while loyalty can pay off, you’re not tied to one company and can and should shop around.

Loyalty

Your insurance history matters. Have you been with an insurance company for the past 20 years? Loyalty is often rewarded, however once you stay with a company it can be detrimental in the long run. To keep you buying insurance from their company they will give you Gold cars, Loyalty cards, Platinum driver reward cards, Rating One for Life – in fact they will call it anything that sounds important. Beware, though, these cards are generally marketing ploys to get you to stay loyal to the company. They may well be putting up your insurance price each year to record levels without you noticing. Compare your bills!

Other things to note

– It can be more expensive to pay monthly
– If you have a criminal record, you might have trouble being insured
– If you have defaulted on payments with another company they may well quote you a high price
– Some companies do not like to insure powerful cars with older drivers and will quote enormous prices
– It pays to look around but be careful not to get too many quotes (over 5 different companies) as this could reduce your chances of being covered
– You may be required to take your car to a registered mechanic for an inspection before you will be insured. If it’s a great price, do it, but if you could do better, try to avoid this extra effort
– Some companies do not like coupe cars as they have a higher risk and will quote higher prices also
– If you do have a patchy driving history or have had a few accidents, you can be taken on by insurance companies, you will just have to be honest and do your homework
– There’s nothing you can do about it but age will impact on your premium – if you’re 80, it helps to have a younger person (like your child or grandchild) on the policy to bring the price down

Do you have an insured car? How much are you paying? Tell us about your experiences with motor insurance below.