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No matter the product or service, we all want to get the best bang for buck, especially considering the financial stress many households are facing. While shopping around for car insurance may not feel like an exciting prospect, it can mean the difference between putting up with the latest premium hike or finding a better deal.
There is no doubt that insurance prices have shot up over the past couple of years: according to the Australian Bureau of Statistics (ABS), insurance prices in Australia rose by 16.4% annually as of March 2024. You may have noticed that your car insurance premium—be it the annual figure or monthly—has risen by double-digits, outpacing the rate of inflation.
Car insurers cite a range of reasons for premium hikes—including supply chain issues and the increase in the cost of parts—but this doesn’t mean you have to wear them. This article is designed to help you find a cheaper car insurance deal so you can shave hundreds off your annual premium.
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Frequently Asked Questions (FAQs)
How much does car insurance cost in Australia?
This is the big question on every cautious motorist’s mind, but it’s very difficult to answer outright. Because insurance premiums are set based on each driver’s risk profile, it’s nearly impossible to suggest an accurate average insurance premium in Australia. As an overarching rule, you can expect third party premiums to be lower, and comprehensive options to be considerably higher.
What is a good premium for car insurance?
The best premium for any one driver is a price that fits in their budget on a policy that covers all their needs as a car owner and driver.
There’s no point purchasing a very cheap insurance policy if your car is quite valuable and an essential transport method in your life. While you may save on premiums, you’ll find yourself in a tricky spot if your insurance doesn’t cover repairs or replacement and you need a car to get to work or support your family. Conversely, if you have extensive cover that goes beyond what your car is worth or how you use it, then you’re throwing money away.
Does car insurance increase after making a claim?
It’s not a certainty, but it is likely that your car insurance premium will increase at renewal time if you make a claim in the previous year. It won’t happen until you do reach the end of your policy period, since your insurance company has effectively taken on the risk that you make a claim in that time. If they consider that the event and claim has increased your risk profile as a driver and insurance customer, then they will generally increase your premium.
You aren’t obligated to stay with the same insurance provider each year, so be sure to consider other options if your insurance gets bumped up because of a claim. Just don’t forget about any discounts or bonuses you may lose when switching providers.
Will a cheap car insurance policy be enough?
As long as you’ve factored in your needs as a driver, a more affordable policy isn’t necessarily less effective than an expensive option. If you’re only concerned with covering potential damages you may cause to other people’s vehicles and property while driving, a cheaper third party policy is adequate.
If you do choose the generally more expensive comprehensive option, prices will vary considerably depending on you and your car. There’s not point insuring your vehicle beyond what it’s worth, so a cheaper option within this level of insurance may still be the best fit.
What is the least amount of car insurance you need in Australia?
Every driver in Australia must take out Compulsory Third Party Insurance (CTP), which in some states, such as Victoria, is included in your car registration costs.
CTP covers the cost of third-party compensation claims, should you or somebody else driving your car cause someone injury or death, in an accident.
You can also choose to add one of three optional insurances:
- Third party property insurance, which covers you for damage to other people’s cars or property.
- Third party fire and theft, which covers you if your car is stolen, or is written-off in a fire
- Comprehensive car insurance, which covers you for all of the above, as well as damage to your own vehicle.