How to cut the cost of car insurance

No one is a perfect driver and, if you’re on the road daily for 50 or 60 years, there’s a better than even chance you’ll be involved in a mishap.

This is where comprehensive car insurance offers peace of mind. If you’re at fault (and provided you weren’t driving in an illegal manner), you can pay an agreed upon excess and the damage to your vehicle will be covered.

The only downside to comprehensive car insurance? It isn’t cheap. Even on a run-of-the-mill family runabout, you’re looking at $1000, give or take, for your annual premium.

But there are ways to minimise the yearly damage to your hip pocket.

“Motor vehicle insurance premiums reflect the overall risk profile associated with insuring a particular vehicle and driver,” an IAG spokesman explains. “We consider a range of factors when determining premiums.”

Below is a rundown of those factors and what you can do to lower the cost of comprehensive car insurance as much as possible.

1. Store your vehicle in a lock-up garaage

So many of us clutter our garages with bikes, toys, gym gear and gardening equipment that the original meaning of the word ‘garage’ is almost obsolete. But if you can make room for your family car and lock it up when not in use rather than parking it on the street, your insurance company will take that into account when assessing your premium.

2. Fit security devices

Although most modern cars do come with engine immobilisers and other security devices, it doesn’t hurt to add a few more. Tried and true measures such as a steering lock (making a comeback in recent months), kill switch and car alarm are effective ways to deter or prevent car theft and make your vehicle less of an insurance risk.

3. Live in a low-crime suburb

This one’s easier said than done (and a small reduction to your premium isn’t going to offset an additional $100,000 on your mortgage), but insurance companies do consider the suburb where a vehicle is stored when working out a comprehensive car insurance policy. NB: Lying about where a vehicle is usually kept to obtain a lower premium is both fraudulent and likely to backfire, as it will void your coverage.

4. Drive carefully and/or drive less

Competence and due care go a long way in avoiding accidents, and insurance companies take this into account when evaluating your premium. If you have a clean driving record and no past insurance claims, it will be reflected in a lower price.

The laws of probability also hold sway. A person who drives less frequently will statistically be a lower risk. “Customers can save on their insurance by reviewing their cover regularly and selecting options that match how they use their vehicle, for example choosing a lower kilometre policy if they drive less,” explains our IAG spokesman.

The age and sex of the primary driver are also reliable indicators of crash risk, so if you’re older than 25 and a woman, you’ll likely see a lower premium than if you’re an 18-year-old man.

5. Consider cost and availability of repairs

A BMW 118 M Sport might be more fun and look cooler than a Toyota Yaris, but if you have a bingle in the BMW it will be much more expensive to repair. We’re not just talking the cost of parts, either, but the availability of those parts and how much the repairer will charge for labour. An insurance company takes this into account when quoting for comprehensive coverage.

6. Bundle policies

Most insurers offer multi-policy discounts, so if you’re a two-car household and also have home and contents insurance, purchasing all your policies with the same company can lead to considerable savings.

7. Agree to a higher excess

Insurers will typically reduce an annual premium if you agree to a higher excess payment in the event of an at-fault claim. This approach is a bit of a gamble, as it only saves money if you don’t have an accident for several years. If you need to lodge a claim earlier than that, you may end up paying more overall. Do the maths first and be honest with yourself about the probable risks.