Insurers raise premiums despite car use declining during lockdowns

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Car insurers raised premiums across the country by 2.15 per cent in 2020, despite motorists driving less due to COVID restrictions, according to research by financial comparison site Mozo.

Mozo analysed comprehensive car insurance quote data for the same 10,010 unique customer scenarios in 2019 and 2020 to reveal average annual prices across each state and age group.

The analysis showed that younger drivers were the hardest hit, with 18 to 24-year-olds experiencing the biggest average price hikes with premiums increasing 3.10 per cent from $1287 to $1327. It also found those aged 18 years or younger were paying the highest premiums on average at $1712 – up 0.73 per cent year on year.

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“With COVID restrictions impacting car use across Australia and many drivers spending months polishing their cars in their garages, it’s hard to see how insurers can justify hiking car insurance premiums,” says Mozo director Kirsty Lamont.

Mozo’s latest nationally representative research also found that the vast majority (80 per cent) of car insurance customers had not seen their premium decrease even though there was less traffic on the roads.

“With car insurers hitting the brakes on proactively providing premium relief to customers, if you are driving less and struggling with the cost of insurance, it pays to contact your insurer and request a discount,” Ms Lamont says.

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Since the pandemic began, three-quarters (75 per cent) of people Mozo surveyed had not contacted their car insurer to ask for a discount and 12 per cent of people surveyed had to cancel their car insurance to save money.

“Something as simple as comparing premiums and switching to the best value insurer you can find can significantly reduce your costs,” says Ms Lamont.

The latest findings come following Mozo’s Pandemic Premiums: COVID Car Insurance Report 2020 released earlier this year, which found many Australians choose their insurer simply based on brand recognition or word of mouth even though average annual savings of up to $902 are available for comparable cover.

Have you shopped around for cheaper car insurance in the past 12 months? If not, why not?

Paul Murrell is a motoring writer and creator of seniordriveraus.com, which specialises in “car advice for people whose age and IQ are both over 50”. This article first appeared on seniordriveraus.com

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Written by Paul Murrell



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