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Thoughts on car insurance ?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Simon Hampel, 6th Mar, 2008.

  1. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Location:
    Sydney, Australia
    Just wondering what people's thoughts on car insurance are ... specifically Comprehensive Insurance vs Third Party Property Damage Insurance.

    Just got my policy renewal for our comprehensive insurance and realised we are paying over $400 per annum for a car that has an "agreed value" of only $2500 ... - and we have a $550 excess! :rolleyes:

    It's a 1994 Daihatsu Charade that we bought new nearly 14 years ago ... although it's only done just over 110,000km in that time - doesn't get driven all that much, which is why we haven't bothered to replace it, so it's in pretty good condition mechanically.

    ... now I know that there are components of that insurance that go beyond repairing or replacing the car itself ... and I haven't called the insurance company to find out how much TPPD is for comparison purposes - but I was wondering what people's thoughts are in general.
     
  2. DaveA

    DaveA Well-Known Member

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    Sydney, NSW
    Maybe even TPPD Fire and theft option. That way the only thing your left out of is if you crash it.

    However i think ull find TPPD is going to be about $250, so your only talking the difference. Once that difference is known you'll have more of an idea . But take a risk verse return. (assuming the policy is 250). You spend $150 per year to get a potential return of $2500. You would need to not crash for 15 more years to get your return back. Id say there is more chance than not having an accident in 15 years. Before i get corrected, yes ur return would be $2500 and not $1950, because if you had TPPD then you would still have to pay the excess for the property damage and not recieve any cash back.

    So id say its property worth keeping the comprehensive insurance, but welcome others peoples opinions...
     
  3. MJK

    MJK Well-Known Member

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    Just for comparison...we pay $656 pa for comprehensive on a car that now has an agreed value of $6400 (excess $500) rating 1 with AAMI.

    So we are paying 10% of value as a premium whereas you are paying significantly more.

    MJK:D
     
  4. Barracuda

    Barracuda Active Member

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    Wahroonga, NSW
  5. Here_To_Learn

    Here_To_Learn Well-Known Member

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    Sim, insurance is peace of mind and your premiums do sound a little hight.

    Try shopping around. The difference is worth the extra bit of research online.

    One thing I cannot understand is that if I renew my policy on-line each year as a 'new customer' it's cheaper than renewing via noticed sent to me.

    Go figure !
     
  6. DaveA

    DaveA Well-Known Member

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    wow quite good.... about $230 cheaper a year for my car...

    shame it was stolen a couple of weeks ago...
     
  7. tasmo

    tasmo Well-Known Member

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    2nd Jun, 2006
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    Location:
    Canberra, ACT
    Hi, I have tried a quote from Bingle (an online nofrills company underwritten/owned by AAMI) for my sons 96 Falcon, and yes it is $399 as against $494 in the AAMI renewal notice. A saving of 19% on the renewal premium.

    One significant difference is in the policy's issued. The renewal policy carrys a Maximum No-Claim Bonus for Life whereas the new nofrills policy does not have No-Claim Bonus protection.

    The cheaper policy premium does reflect that you have a 3 year no claims record as part of the policy issue conditions , but no protection of that discount is carried in the policy.

    So it depends on how much value you place on the No-Claim discount protection. In earlier years of my sons driving careers, we experienced a few claims!! We were insured with NRMA with a 60%+ no claim bonus protected policy. This did not protect us from spiraling policy costs, as although we were still receiving the 60%+ discount on policy, the underlying policy premium was being rapidly escalated, along with the excesses. This was done via increased risk adjustment to our policy. If other insurance companies uses such a tactic, then no claim bonuses are negated by increased underlying policy costs and are of little value if events unfold where you have a series of accidents.

    So I guess no claim discounts reward those with a good record, but there is really no permanent protection if for some reason your claim history deteriates.