Renewing Your Car Insurance Policy
With so many horror stories regarding car insurance claims, it pays to do your homework when taking out a new car insurance contract. If you don't read the fine print, there is no one else to blame but yourself if you get caught with less cover than you imagined or find yourself not covered under certain conditions.
Get at least four quotes from four different companies. Pay attention to the excess. The quoted premium may be heavily affected by the excess. Also, check your current insurer's premium online. The premium quoted on the renewal notice may not be their lowest so always check before you automatically renew your policy.
A comprehensive checklist will ensure you obtain the best value for your dollar.
Always check the product disclosure statement (PDS) before signing up. This applies even if you are only renewing your contract with your present company.
Things to watch for:
- Standard cover should include theft, accident, flood, fire, hail and storm.
- There should be a 24 hour helpline.
- Consider whether to ask for 'agreed value' on your vehicle rather than 'market value'. This allows you to know what you will get if the vehicle is written off.
- Choice of repairer may not be standard (but should be) and there may be extra conditions.
- In the event of theft, what personal property (if any) is covered? This should include such things as mobile phones, laptops, clothes, but there may be conditions.
- Watch for additional extras which may apply in the event of a claim eg young driver excess.
- In the event of total loss, new car replacement conditions may be restrictive. You need to be covered for at least two years with an adequate kilometre limit.
- Check the conditions and limits for a replacement car after an incident. For instance, a replacement car may be included after theft but not after an accident.
- A replacement car may be covered only by third party cover insurance. Know what your contract is offering.
- If you pay for your insurance contract in monthly instalments, you may pay more. Check that you will not be penalised in this way.
It pays to check your company's policy on the no-claim bonus. Do you lose the bonus on your first claim or does it just reduce? At what point is it more economical to pay for a repair rather than lose the no-claim bonus?
Finally once you've agreed on a new contract, check the date of commencement of cover and any other applicable conditions.