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CAR INSURANCE

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SHOP AROUND AND SAVE LOTS OF MONEY

All motor car insurers like to give consumers the impression that they have the best deals, are the most loyal to their clients and that they will look after those clients under all circumstances. Nothing could be further from the truth.

The truth is that car insurers collude amongst themselves to cut the best deals for themselves, the best example being the "knock for knock" policy, where instead of a person's insurer aiming to cut the best deal for his client, that insurer will not pursue many benefits for that client to protect the opposing insurer. Insurance companies do not have loyalty to their clients - their only loyalty is to their increasing profit margins.

PAY MORE FOR BEING COMPLACENT AND LAZY

Car insurance companies rely a lot on the complacency of their clients, knowing that most of them will merely renew their policies at the premiums quoted on the renewal policies that they send out every year. They know that most people will not go to the effort of shopping around for the best deals, so they just keep hitting their clients with ever-increasing premiums and lousier deals, knowing that their clients are mostly sheep.

With the advent of the Internet, shopping around for car insurance quotes could not be easier. In a few minutes, anybody can get a range of quotes from the websites of individual insurers and even easier, there are websites where consumers can input the details of their vehicles and get quotes from most of the major insurance companies and compare them for the best deals.

A TYPICAL CASE - TRUE STORY

In May 2008, I received a renewal notice from AAMI for comprehensive insurance for one of the vehicles that I owned, a 2000 Holden Astra CD that my daughter drove. The premium quoted was $891 on an agreed value of $12,000. Having just renewed insurance on another car in this household, a 1 year old Mazda 3 SP23 for $760 that had an agreed value of $33,000, I thought it was crazy to pay a higher premium than that for a car that was worth only one-third of the Mazda.

So I started shopping around online and within a few minutes, I collected five quotes, most of which were cheaper than the AAMI quote. The best quote came from NRMA for the Astra for $639, a whopping $252 cheaper than the renewal quote from AAMI. So obviously I took out a policy with NRMA for the car and told AAMI to stick their rip-off quote where the sun don't shine, so to speak.

Now I'm not endorsing NRMA, AAMI or any other car insurer, but what I am saying is - DON'T BE COMPLACENT. Also, be aware that your current insurance company doesn't give a damn about your loyalty - they will happily kick you in the goolies and hit you with whatever premium rip-offs they consider they can get away with and in most cases, they will not come to the party to reduce your insurance because of your loyalty. I found this out the hard way. So don't think you owe your present insurer a damn thing.

ANOTHER TYPICAL CASE - TRUE STORY

In late September 2008, I received another renewal notice from AAMI for comprehensive insurance for my own personal vehicle, a Holden VT Berlina station wagon that I owned at the time. The premium was $840. I thought that this was rather high, so I sent an email to AAMI to see if it could be more competitive with the online quote I received from NRMA. AAMI replied with the statement, "Please note that AAMI does not match the prices quoted by other insurance companies."

I promptly replied to AAMI, stating that if this was the case, they should be aware that it is a competitive marketplace and if AAMI was not interested in retaining a loyal client by fobbing me off without at least offering some relief from their higher premium, then I would take my business elsewhere. This is exactly what I did, by reinsuring my car with NRMA, which happened to give me the cheapest quote at the time.

Incidentally, I found out something very interesting in my research. Although AAMI were prepared to insure my car for a much higher amount than current market value, apparently if my car was totally written off in an accident, AAMI would not pay out the amount on the policy, but would either replace my car with a similar vehicle of the same age or offer to pay me the actual market value of my car. So in actual fact, I was paying a much higher premium than necessary, however AAMI neglected to tell me any of this to save me money.

So at the end of the day, instead of paying $840 to AAMI to get no more than market value coverage of my car, I paid NRMA $578 for literally the same coverage, a whopping $262, equating to just over 30% saving. This should be a lesson to everybody when their vehicles are due for insurance renewal. Don't take anything at face value and don't just accept the renewal policy without question.

All insurers are the same - they are not interested in you or your financial wellbeing. They are only interested in how much money they can squeeze out of you for the least risk and expense, so you don't owe your insurer any loyalty whatsoever. Try and get the best deal possible and if you don't get satisfaction, don't be scared to dump your current insurer if he won't accommodate you or be competitive with other quotes.

BE A WOLF, NOT A SHEEP

So before you get led like a lamb to the slaughter and blithely pay your car insurance renewal with the company with whom you are already insured, go on-line at renewal time and get quotes from their competitors and you might get a pleasant surprise and save yourself a substantial amount of money. You will also find that most car insurers offer the same benefits these days, such as lifetime no claim bonus and other goodies, so there's no advantage to paying a much higher premium than you have to.

Go to websites that will perform on-line comparisons of all available car insurance for free, so you can quickly get an idea which company is the cheapest at the time. Once you narrow the list down to a couple of insurers, then go onto their websites and get firm quotes, save them if possible, but certainly print them so you have hard copy, just in case you have to make enquiries by phone. Once you find the best deal, then you can buy a premium on-line, retrieving the saved quote and saving yourself a lot of money in the process.

One of the best ways to get a better deal is to arm yourself with the best online quotes, then ring up your insurer and demand a cheaper premium than the cheapest one you have been offered on-line. Of course if the insurance company refuses, you just go and insure your car with the cheapest quote you already have. However, quite often an insurance company that you are already with will try and match the cheapest quote to keep your business. So don't be scared to make those demands.

CTP INSURANCE

The same goes for Compulsory Third Party Insurance (CTP). The difference in premiums between insurers is phenomenal. For instance, in 23 June 2008, the Motor Accidents Authority of NSW website was checked to get an online comparison of CTP quotes for a Holden Astra and the difference in premiums was staggering, considering that all CTP insurers have to offer the same basic cover.

Ranked from lowest to highest premiums to the nearest dollar, they were:

  1. QBE - $309
  2. Zurich - $362
  3. NRMA - $495
  4. CIC -$615
  5. GIO -$622
  6. Allianz - $626
  7. AAMI - $627

QBE's premium was LESS THAN HALF of AAMI's premium. It doesn't make any difference which CTP policy you choose, because you need it to register your car, so you might as well get the cheapest CTP insurance. On top of that, it's the third party with whom you have an accident who benefits from this insurance, not you, so get the cheapest quote possible.

THE SAVINGS ARE HUGE

By insuring that Astra with NRMA instead of AAMI, $252 was saved and by taking out a CTP policy with QBE instead of AAMI, $318 was saved - a total of $570 cheaper than the highest quotes. The same was found with a Holden Berlina station wagon. By giving AAMI the boot and taking out comprehensive insurance with NRMA, $262 was saved. The CTP cost $360, as opposed to AAMI's quote of $399, so a total of $301 was saved.

That's a huge amount of money saved on insuring two cars - a total of $871. Nothing much can be done about registration costs, as they are fixed by state governments and motorists have no choice but to pay this, but they DO have a choice about comprehensive car insurance and CTP. Interstate CTP conditions may vary, so take that into account.

DEALING WITH CLAIMS

Most people think that if they are involved in an accident that is caused by somebody else, that they have to settle for whatever the other party's insurance company offers by way of repairs and that's all. This is nonsense. Legally, if somebody causes you loss, you are entitled to pursue compensation to pay for every cent of that loss and inconvenience you have been caused. However, insurance companies try to minimise their payouts by fooling people into thinking that whatever they offer is all that a victim will get and that it's up to the insurance companies to determine what a person should be compensated. This is utter nonsense.

For instance, most insurance companies will tell people whose cars have been damaged by their clients that they will not pay demurrage - this term means the supply of a replacement or rental vehicle for the duration of the repairs to the victim's car. That is right, however where people are fooled is that they think that they have to accept whatever the perpetrator's insurance company offers and settle for that. Of course this is just rubbish. Here is a good example of how I dealt with one such car insurance company.

A TYPICAL ACCIDENT INSURANCE SCENARIO - TRUE STORY

Some years ago my car was struck in the rear by another car. Both the driver of the other car and I exchanged details as required and there was no question as to whose fault it was that my car was damaged. Except for very unusual circumstances, it is taken for granted that if a car hits your car in the rear, the other driver is always at fault. So I drove my damaged car to two panelbeaters and obtained quotes for its repair. I sent the quotes to the driver of the other vehicle, stating that he had admitted that he was at fault and that I expected him to agree to have my car repaired, plus pay for the cost of a rental car of equivalent standard as my car for the duration of time that my car was being repaired. I gave him seven days to respond.

Two days later, I received a phone call from the other driver's insurance company. The insurer admitted that his client was liable and that the insurer would pay for my car to be repaired. I agreed that this was satisfactory so far, but then brought up the subject of how I was going to go about my business with my car off the road. I told the insurer that I had rented a car for the duration of the repair to my vehicle and I expected to be totally compensated for this expense.

The insurer literally laughed at this and stated that his company did not pay demurrage (the cost of the rental car) because this was not part of the insurance policy that the company had with his client. He was shocked when I said - SO WHAT? He asked what I meant, so I explained my position. I said, "My business is with your client, not his insurer. Your client caused damage to my vehicle and the repairs are estimated to take around three weeks. You have agreed to take responsibility for repairing my car and that's fine. However, by causing this accident, your client caused me to suffer loss and inconvenience by removing my means of transport, forcing me to rent an equivalent vehicle so that I can go about my business."

I continued, "Whatever arrangement your client has with his insurance company is completely immaterial to me. I don't care a damn what business he has with you - that's his problem, not mine. My business is with him. Because he has put my car off the road for at least three weeks, I expect him to compensate me for this by paying for the rental car I was forced to hire at his entire expense." The insurer was quite taken aback by this and reiterated that his company's policy was never to pay demurrage.

I then told the insurer, "This is the situation. I don't care what your policy on demurrage happens to be. If you choose to represent your client and assume his liabilities in this matter, I insist that you meet my demands for compensation and that includes paying for the rental car for the entire time that my car is being repaired. If you do not agree to my demands, then I don't need to talk to you any further, as I am not your client and you are in an adversarial position. From this point, I will deal directly with your client and demand this compensation from him, as he is liable for it. If he does not agree forthwith to pay for the entire repair of my car and also pay the entire cost of the rental car for my use, I will proceed to serve him with a Statement of Liquidated Claim - in other words, I will sue him for damages. How he deals with the fact that he is insured by your company is none of my business. He caused the damage and loss to me, therefore I will sue him to recover every cent. I couldn't care less whether your company pays or doesn't pay demurrage - that's not my concern."

The insurer was quite flabbergasted at my position, however I knew that I had the law on my side. Sure, the insurer had a liability to his client to pay for the repairs to my car and did not have any liability to pay demurrage, but I was quite clear that if the insurer did not agree to providing a rental car to me, I would quite happily bypass the normal procedure, which the insurance companies thrive upon, which is to fool victims into thinking that they do not have the right to demand damages and compensation, other than the repairs to their cars.

The insurer knew that he would have a very irate client on his back if I served a summons for damages on him directly and dragged him to court and won handsomely, so the insurer rolled over and paid me for my rental car cost for the entire time my car was off the road. Of course the insurer knew that if I bypassed him, sued his client and won, the resulting publicity would encourage others to do the same thing, which would cost insurance companies a fortune.

NEVER BELIEVE WHAT THEY TELL YOU

Always remember that if you are a victim of a car accident, YOU HAVE RIGHTS UNDER THE LAW - lots of them. The person who is liable for your losses is the one who caused the damage, not his insurance company. Furthermore, you should always remember that the perpetrator's insurance company is NOT your friend - it is your adversary and will always try to save itself the most amount of money at YOUR expense.

So if you suffer an accident that was not your fault, be tough and demand every cent that you are entitled to as compensation, as well as the full repair to your vehicle. Remember that the perpetrator has to compensate you for your inconvenience and if that means that he has to pay for a rental car, then so be it. If you lost income because of the accident, demand full compensation for it.

Don't sign away your rights because an insurance company says that they don't have an agreement with their client to pay for those rights. What another insurer's arrangements with their client is their problem, so don't make it your problem.

WHAT TO DO IF YOU ARE THE VICTIM
ASSERT YOUR RIGHTS AT ALL TIMES

Most car insurance companies try to fool people into believing that all they are entitled to receive is only whatever the insurers decide is appropriate and this is utter garbage. Stand up for your rights and demand everything that you can get if you think that you are entitled to it. Never ever swallow the crap that an insurance company tells you, even the one with whom you are insured, because all they want to do is to minimise their own costs and the costs to their cronies, the other insurance companies, always at your expense.