Taking out car insurance is an expensive, dreaded task for me.
After signing up for insurance when I bought my new wheels, it's not really something I ever want to do again.
But as CHOICE's insurance expert Jodi Bird explains, these days there's a "loyalty penalty" for sticking with the same insurer.
"In NSW for example, CHOICE found the difference between the most expensive and cheapest policy, for the same cover, was almost $800."
So it's worth shopping around, at least every few year. Here's everything you need to know.
Choosing your level of cover
Compulsory third party insurance (CTP)
Also known as your green slip, this covers any compensation claims if you injure someone in an accident.
As the name suggests, it's compulsory, so you'll need it no matter what your car is worth.
CTP is included in your rego costs (except in NSW, where you buy it separately).
Third party property insurance
Even if your car is only worth a couple of grand, Mr Bird says it's still a good idea to be covered by third party property insurance.
This policy means if you're in an accident, it's up to you to repair your own car. But if the collision was your fault, you'll be covered for repairs on the other car.
"If you hit [an expensive car] ... it will definitely help to have [this] insurance," Mr Bird says.
Third party property, fire and theft insurance
A level up but still not the most expensive, this policy will cover your car for certain events. You guessed it — for fire and theft.
Comprehensive insurance
This is the highest level of cover you can get. It includes all the previous scenarios, and means your insurer should repair your car, even if an accident is your fault.
"If your car is more expensive and you can't afford to replace it just off the cuff, and you need it quite regularly, then your best bet is comprehensive car insurance," Mr Bird says.
How to choose a cover level
As Mr Bird explains, the type of cover you take out will depend on how much your car is worth.
If you've just bought a fancy new ride, you might want peace of mind with comprehensive insurance. But if you've just bought a 20-year-old, second-hand car? Not so much.
"Generally we would advise that if your premiums cost more than 10 per cent of the value of your car, then you should probably downgrade."
You can downgrade either by changing your cover level, or by increasing your excess.
Choosing your excess
Your excess is how much you'll fork out if you have to make a claim.
A higher excess will generally mean your year-to-year policy is cheaper. Most insurers will have a quote engine you can use to work this out.
For example, you could compare how much a $500 versus a $750 excess will cost you in yearly premiums.
Mr Bird says to "think about it in terms of how much money you can afford to fork out in a lump sum to get your car back," or to pay for someone else's repairs.
What to look for
Mr Bird says car insurance is one of the easiest types of insurance to understand.
"All policies, if you're talking about comprehensive insurance, will cover you for collision [and] any kind of natural disaster damage, like hail, storm, fire or flood."
He says one big difference between insurers will be between what kind of personal property they cover — so whether they'll pay for a laptop or child seat left in the car that gets stolen or damaged in an accident.
You can also look out for roadside assist, if the policy includes a rental car while you're waiting for repairs, and if you can choose your repairer.
If you're under 25 or on your P plates, the cost of premiums or excess can also be higher, so it's worth comparing policies that meet your specific circumstances.
Getting a great deal
Some insurers will give you a discount if you buy in a bundle — so if your home and car insurance is with the same company.
However Mr Bird still recommends shopping around to make sure you're getting a good deal across all three together.
While comparison websites can be handy to get an initial idea of the market, Mr Birds says you should be wary of using them as gospel.
"They will generally try and push the products that might end up paying the comparison site a bit more money."
He says while they're still helpful once you've narrowed it down to a few policies, you're better off going to the insurance websites themselves and comparing them yourself.
Your insurer will also calculate your risk factors, and increase or decrease your policy cost accordingly.
"Sometimes you might even find that if you change your address to your next door neighbour's, suddenly your premium might be cheaper or more expensive."
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