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The cost of car insurance is different for everybody. Your insurer will ask a handful of questions to determine the level of risk they would potentially take on when insuring you. These include:

• Your age and gender
• The make, model, and even the colour of your car
• Where you live
• How far you drive each year
• Where you park your car at home
• How long since you past your test
• Your claims history
• Number of demerit points

The cost can also change when you select the excess and the level of cover you want, as well as whether you choose to pay annually or in monthly instalments.

In the same way that the cost of car insurance is heavily influenced by who you are and how you drive, the best car insurance for you depends on… well, you.

There are a lot of different insurers and some of them offer cover for a very specific type of driver.

There are insurers who specialise in cover for prestige cars, while others focus on affordable cover for customers who don’t drive very often, but most insurers will calculate your premiums based on how risky they believe you will be to cover.

This means that choosing the best policy for you often comes down to comparing policies from different insurers.

If you have a handful of quotes from insurers you trust, you can then work out the best deal for your vehicle.

• Price
• Level of cover
• Customer and industry ratings

Remember, the lowest price isn’t always the best value in the long run. You might also want to look at whether a provider offers a pay-as-you-drive or pay-per-km plan.

This means you can pay less for driving less — a bonus for anyone shifting their work habits or staying at home more.

1. Market Value
   • This is a fixed amount that you and your insurer agree on when you first take out the policy.
   • It offers certainty, as you’ll know exactly what you’ll get in the event of a total loss. However, this option typically comes with higher premiums.
   • If you choose an agreed value of $30,000 for your vehicle and it is declared a total loss, your insurer will pay that amount (minus deductions).
   • Note: Keep in mind that the agreed value may reduce each time you renew your policy, as vehicles generally depreciate over time. Always check your yearly renewal to confirm your new agreed value, and if you feel it’s unfair, discuss it with your insurer.
2. Agreed Value
   • This reflects the current sale value of your car at the time of the accident or claim.
   • While it usually leads to lower premiums, the payout amount can fluctuate based on the depreciation of your car, meaning it’s often less predictable than agreed value.
   • If you purchased your car for $30,000, it might be worth $25,000 after two years due to depreciation. The payout will be based on this market value if it's declared a total loss.
   • This option offers lower premiums, but payouts depend on depreciation. In some cases, your car’s value may exceed expectations—research before deciding.

There’s no need to change providers every year if you’re happy with your current policy but you should regularly compare prices to ensure you’re getting the best level of cover at a competitive rate.

But if you’ve moved house or changed your lifestyle, such as commuting less or your car is now parked in a garage, it’s important to let your insurer know because it could lead to lower premiums.

Quickly comparing online with online Compare Club can help you find a policy that’s right for your household.

It’s important to note that you don’t necessarily need to wait until your renewal date to compare policies.

The short answer to this is yes. Insurers tend to view younger, newer drivers as more risky to insure and price their premiums accordingly as young drivers, males especially, are more likely to be involved in an accident or driving offence like speeding*.

Not every young driver will pay the same and premiums will vary on a range of cover, but younger drivers may pay more for standard comprehensive car insurance than those in higher age brackets.

You may be able to reduce some of these costs by being added as an extra driver to your parents’ insurance. It’s worth comparing to see if this works out cheaper than taking out your own policy.

*Queensland Government, Young Drivers, accessed 20.09.21

Finding the right insurance for your age ultimately comes down to comparing policies from leading providers based on your car make/model and other lifestyle factors. ‘Specialist’ providers often service vintage or prestige cars and worry less about age.

But there are insurers who offer better prices for younger or even older drivers. Comparing cover with a site such as Compare Club is one of the quickest and easiest ways to find a suitable policy at a price that won’t break the bank.

A no claims bonus or discount is a reduction in your comprehensive car insurance premium after a period of not claiming. It’s a way of rewarding safe drivers and recognising those who don’t make at-fault claims.

Under the no claim bonus scheme, your discount generally increases with each claim-free year, up to a maximum of around five years.

Different insurers may offer different discounts and different maximum discount levels. Typically, this is around 2-3 percent in the first year, and this can increase to around 15 percent after five years, although some insurers may have different limits.

Other factors which can impact the rate at which you earn your discount are your driving history, your rating from previous insurers and any claims made by other drivers on your policy.

Some insurers increase the cost of your premium if you have a minor accident, even if you’re not at fault, while others offer no claims bonus protection as a paid extra, which means your premium isn’t affected when you make a claim. This can be costly and may even work out as more than your annual premium increase, so you may not actually save money by switching insurers.

Finally, although some providers will allow you to transfer your no claims discount when starting a new policy or moving to a new provider, it’s important to regularly shop around, ask questions, and check you’re getting the best deal.

After all, a new policy with a different insurer may work out as better value than a high rating and maximum discount with your old one.

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