December 08, 2007

Horse 838 - Premiums at a Premium

Most Sydneysiders would be aware that we live in Australia's most expensive city for real estate, but we can also lay claim to paying some of the highest car-insurance premiums in the country. Research group Cannex says we pay $577 more, on average, in annual premiums than urban drivers in other parts of Australia. I find this personally offensive - are Sydneysiders worse than other drivers in country? Are we simply more liturgeous? Or more likely, is this just an excuse to be a licenced bandit and steal more money from the good and fair people of NSW.

Comprehensive car insurance is quite different from compulsory third party (CTP), or "green slip", insurance. Comprehensive cover offers protection for damage to your own car up to an agreed value, as well as damage to anyone else's property.

However, CTP merely insures you, the driver, against any claim for personal injury to others if your car is at fault in an accident. It won't cover you for damage to your own vehicle or someone else's property. Even a slight knock to your car can cause a damage bill running into thousands of dollars - but run into a Rolls-Royce and you may be looking at a bill big enough to bring on a nosebleed. That's why I reckon third-party comprehensive car cover at least is worth having, and I wouldn't feel comfortable driving without it.

Trouble is, the premiums aren't cheap. Cannex found that in NSW, a young male driver (the highest-risk category and therefore the most expensive) can pay comprehensive premiums as high as $2770 a year. That's a significant expense for a 20-something who might be on apprentices' wages. Even drivers in their 60s can pay annual premiums topping $1300.

One of the few things that competition and degregulation has done whis is actually good is that in recent years the car-insurance market has had a flood of new entrants, forcing premiums down. By shopping around, that same young male driver could pay less than $900 in annual car cover - a saving of around $1870, which it must be said would be used to purchase a better car in the first place and perhaps diminish the rish of bashing into that Rolls-Royce in the first place.

Cannex's star-ratings report, which can be downloaded at identifies the insurers likely to provide the best deal for a variety of drivers. I personally do not like banks, insurance companies or actuarists, so anything which means that I have to give them as little money as possible is surely a good thing.

Please don't give insurers any more money than you need to - they truly do not deserve it.

And now:

One Word Weather With Nelson Mandela

Um, Mr Mandela, it probably would have been more useful to tell us this before our cars got dumped upon but 5-inch hailstones.

No comments: