Recession Busters: Home, car insurance

Reporter: Helen Wellings
Broadcast Date: April 02, 2009

When the insurance bills come in each year, they blow a massive hole in the budget but there are ways to save.

Most of us pay far more for car insurance and home contents and building insurance than we need to, especially if we just keep renewing premiums with a company that keeps charging us another 10 per cent each year.

Christopher Zinn, Elise Davidson and the Choice team compared 21 Building and Contents insurers, and came up with ways to save, like electing to pay higher excess.

"Choosing car insurance is not an easy thing to do but we found there is a lot of money to be saved by shopping around, up to $1500 if you are a young driver and $400 if you are an adult," Elise said.

When your home contents and building insurance company bill arrives, the advice is to not automatically pay it. You need to shop around.

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Compare policies and you could save $300 to $400.

"If you agree to pay the first $300 of any claim you might make as opposed to no dollars, that can actually substantially reduce the premium that you pay, " Christopher said.

"If you buy online, we found discounts of 5 per cent to 10 per cent, so that's worth having.

"Also in terms of if you bundle the home and contents with the same provider with the same insurer you can get discounts of 10 to 15 per cent."

With car insurance, people under 25 are the highest risk and pay the highest premiums but there are two ways you can reduce the costs substantially.

"A young person can save up to $1500 a year or receive a significant discount on their policy by completing a skilled drivers course," Elise said.

"You can also save hundreds of dollars if you buy a car that is more conservative and deemed by the insurance companies not to be high risk, rather than a turbo car or one that is likely to be stolen."

For families and older drivers there are pensioner discounts. Also a good driving record plus no-claim bonus should lower your premium by 20 per cent at least.

"If you're just driving locally and not very far distances you can just pay for the km you use and you can save significant money on your premium that way," Elise said.

"Things like having better security for your car, so getting an immobilizer installed or a GPS tracking device, there are simple things like paying your policy annually than by the month, you may get a discount there as well."

Joshua Zenas from Canstar Cannex, a company that rates and compares financial products, said it is no use saving money on premiums if you do not insure properly.

They analysed 9000 individual quotes from 53 home and contents insurers and gave their 5-star rating to just two companies.

"Up to 80 per cent of people are under-insured on their home and contents insurance," he said.

"The best insurers for home and contents are Comminsure and Suncorp because they provide the best value across all the states."