Navigating the ever-rising costs of living can be a daunting task, especially when it comes to insurance. For many, the sting of insurance premiums is a significant source of financial stress, and it’s not hard to see why. With prices for home, car, health, and other forms of insurance soaring, it’s more important than ever to ensure you’re not overpaying for your coverage.
A recent poll of nearly 5,000 Yahoo Finance readers revealed that insurance bills are a close second to the most stressful expense they face. This sentiment was echoed by Melbourne-based driver Greg Schrader, who made a startling discovery that could serve as a wake-up call for millions of Australians.
Schrader, like many, wanted to ensure he was getting the best deal on his car insurance. As his policy for his Ford Ranger was up for renewal, he decided to do a little investigative work rather than simply renewing his contract. What he found was a jaw-dropping $500 difference in his car insurance premium, all because of his address.
In an effort to test the system, Schrader set up a fake quote with AAMI, his insurance provider, using all the same details they had on file for him. The only change he made was to list a house a few doors down as his place of residence. The quote he received was $1,250 for the year—$500 cheaper than his current policy.
He was baffled. With no claims on his car, he couldn’t fathom why his premium was so much higher than that of his neighbour.
With this discovery, he leaves a stark reminder of the importance of shopping around and not settling for the first quote you receive: ‘Pick up the phone, go online, do your due diligence, do your research.’
Meanwhile, AAMI stated that policy quotes are based on a variety of factors, including risk assessment, claims history, specific address, age of the driver, and vehicle type.
The issue of rising insurance costs isn’t limited to car insurance. Compare the Market reported that the average cost of insuring a typical four-bedroom home and popular car model was $4,334 in December, marking a nearly 4 per cent increase from the previous quarter.
While natural disasters and construction costs have been credited for the hikes in home and contents insurance premiums, the reasons behind the 58 per cent jump in annual car insurance premium renewals remain murky.
@comparethemarketau Being a “good customer” doesn’t mean you’re getting a good deal. Compare your car insurance with us today to see if you could pay less for great value cover. www.comparethemarket.com.au/car-insurance #CompareTheMarketAU #lifehacks #fintok ♬ original sound – ComparethemarketAU
David Koch, a Yahoo Finance contributor and Compare the Market executive director, urges Australians to treat insurance shopping with the same scrutiny they apply to grocery shopping. He points out that brand loyalty, often reinforced by marketing campaigns that tug at the heartstrings, doesn’t usually translate to better discounts or savings.
‘The bigger the bill, the bigger the potential savings. I challenge you to take your five biggest bills—it could be your energy plan, your home and car insurance, health cover and mortgage—and spend an hour looking to see if you can find some savings,’ he said.
Schrader’s discovery serves as a crucial reminder to review your policies regularly and to shop around. Loyalty to a brand may feel comfortable, but it ‘usually doesn’t pay.’
We at YourLifeChoices encourage our readers to share their experiences with insurance premiums and any tips they have for finding better deals. Have you encountered similar situations? Have you managed to save on your insurance by shopping around? Let us know in the comments below.
Also read: Supermarket car insurance sounds smart, but is it really a good deal?
You may find cheaper insurance premiums, but how reliable are they when you need to make a claim? It’s not much of a saving to get a cheaper premium and then find they have all the arguments against your claim when you need it.
Yep, same here. $420 cheaper across the road, literally my neighbours house across the road. I tried a few different addresses with the same insurance company and details, next door was $52 cheaper, the other side was $4 dearer and the one literally across the road (50 metres) was $420 cheaper.
After contacting the insurance company I got the normal BS about different addresses have different risk profiles, they look at past history of thefts and likely thefts going forward. Now the house across the road is 10 years old, mine is 7 years, neither of us have had thefts, why would the risk be so much greater at my house compared to the other one.
Further, try getting a quote from AAMI, use ALL the same details for your address, close the page and try again, there’s a good chance you’ll get a different quote, only slightly different, but it should surely be the same. It’s as if they pluck figures out of the air.