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There is a lot of terminology involved with Car Insurance and there are many options that you can change on your Policy that will save you money on your premiums.
In order to make this learning curve a little easier, we’ve compiled a list of questions that Insurers may ask you when preparing a Quote for Car Insurance. This list is not exhaustive and certain Insurers may not ask you all of these questions.
Always remember that generally, the best way to save money on your Car Insurance Premiums is to get as many Quotes as possible. The reason for this is, is that different Insurers like to concentrate on different sectors on the market. You will often find that one Insurance company has many different brands, each which concentrate on a different sector of the market. For example, there are certain Insurers who only insure woman, as they have discovered that woman provide a lower risk to them. Therefore, as a woman, you might save money on your Policy with such an Insurer as you won’t be paying to cover men (who are considered to be more of a risk.)
If you feel that you are a “low-risk” customer for an Insurance company, you should try finding a “low-risk Insurer.” (This is an Insurer who will not give cover to an individual who presents a “high-risk.” For example, a person who has previously been convicted of a drink-driving offense or a person who owns a “sports” vehicle.) The reason that you may save with such an Insurer, is that you won’t be paying extra on your premiums in order to cover “high-risk” individuals.
It may take some time getting a lot of Quotes, but you could end up saving a few hundred dollars for an hour or two of your time.
Remember: It’s important to answer all questions honestly and accurately. If at a later stage, you do need to claim and the Insurer discovers that you were not completely honest when applying for the cover, they may reject your claim completely and will not pay you out at all.
We’ll start the list with the questions that will probably make the most difference to the price of your Policy.
What is the Date of Birth / Age of the Primary Driver?
The lower your age, the higher the risk you represent to Insurers. Insurers may also look at an older driver who has had their Driving License for less than 2 years as a higher risk as well. (The Insurance Policy generally needs to be in the name of the main driver.)
Would you like to list Additional Drivers on your Policy?
Adding young drivers to your Policy may drive the price of your Policy up by a significant amount. Many Insurers will allow you to restrict the minimum age of other drivers who use your vehicle, thus saving you extra money on your Premium. (You should keep in mind that should you restrict the age of other drivers and a younger driver does have an accident in your vehicle, the amount of the Excess that you will need to pay, may by far out-weigh the savings of restricting the minimum age on your Policy.)
Would you like to change the amount of Excess you will pay when making a Claim?
Many Insurers will allow you to select the amount of Excess you would like to pay should your vehicle be in an accident. The higher the excess, the lower your premium. If you feel that you are a safe driver and that you are less likely to be involved in a collision than most people, you may want to increase the excess amount, thereby lowering your premium. However, you should never set your Excess amount to be an amount that you cannot afford to pay should you need to do so. (See the following article for a definition of Excess.)
What is the Address or Post Code where the vehicle will be kept at night?
Due to the fact that certain Suburbs may have higher levels of crime, vandalism or may be in a natural disaster zone, one of the criteria Insurers grade the level of risk by, is your Suburb. Unfortunately there’s not much you can do about this, unless you are willing to relocate in order to save on your Insurance Premiums.
Would you like to Insure your vehicle for an Agreed Value or the Market Value?
Often Insurers will let you select whether you would like to Insure your vehicle according to its current Market Value or alternatively according to the value that you and the Insurer agree upon. This is the amount will be paid to you should your vehicle be stolen (and not recovered) or written-off. The Insurer will get the current Market Value of your vehicle from certain Industry Guides. If you have modified your car in any way or installed an expensive sound system, you might want to opt for the Agreed Value option. Keep in mind, the more your car is insured for, the higher your premiums will be.
Have you made any Insurance Claims within the past 5 years?
The number of years asked in this question may differ from Insurer to Insurer. Should you have made several claims within the specified period, the Insurer may give you a higher premium or may be unable to provide you with cover.
Have you had any license suspensions or cancellations in the past 5 years?
The number of years in this question may differ between Insurers. If you have had any license suspensions or cancellation in the specified period, Insurers may “load your Premium” or may be unable to provide you with cover.
What is your current Rating?
Some Insurers work on a Rating system, with Rating One being the best rating. Essentially, Rating One will give you a discount on your Premium. Your rating will generally improve with each year that you have not claimed on your Insurance.
Has the vehicle you wish to Insure been modified?
Most Insurers see a modified vehicle as “high-risk.” The reason for this is that often a modified car is considered to be not as safe as a standard car. The “road handling” of the car may not be as good and Insurers can be particularly suspicious of drivers who have vehicles which are modified to increase speed.
In addition to the questions above, most Insurers will require the following:
- Your full name
- Your date of birth
- Your gender
- Your exact address
- The registration of the vehicle to be Insured (Number Plate)
- The make, exact model and engine capacity of the vehicle
- The Transmission Type of the vehicle
- Factory Fitted Extras to the vehicle
- Whether the vehicle has any existing non-repaired damage
- The date on which you received your Driving License
- What type of Insurance you require (ie: Comprehensive, Third Party, Third Party Fire and Theft) See article: Car Insurance in Australia: What you need to Know.
- Whether the vehicle will be used for Personal or Business purposes
You should also have any previous Policy documents handy should you need to send a copy to the Insurer.
Further Reading:
1. What is "excess" and if I change my "excess" amount, can I save money on my premiums?
2. Save Heaps on Car Insurance.
4. Aggregator Sites Explained.
Disclaimer: This insurance is arranged by A&G Insurance Services Pty Ltd (trading as Budget Direct) (ABN 61 003 617 909, AFSL 241 411) on behalf of the insurer, Auto & General Insurance Company Limited (ABN 42 111 5 86 353). Because we don’t know your financial needs, we can’t advise if this insurance will suit you. You should consider your needs and read the PDS before making a decision to buy insurance. To view or download a copy of our FSG and PDS click here. Car insurance not available in NT. If you purchase an insurance policy from Budget Direct, the owner or operator of the website upon which this advertisement was placed will be paid a fee for referring you to Budget Direct of $18.00 to $62.50 per policy, excluding GST and government charges. This advertisement is placed by A&G Insurance Services Pty Ltd.