How to beat the biggest car and home insurance price hikes in years

Suncorp, AAMI, Apia and GIO announced an average 15 per cent premium increase, while NRMA, Coles Insurance and CGU confirmed average hikes of over 10 per cent.

Some individual premiums are going up by much more, even if you haven’t claimed or done anything else to make them rise. Mine just spiked by 17 per cent!

So don’t automatically renew this year. Here are 3 ways to save a few hundred dollars.

1. Try the ‘Mystery-Shopper’ trick

This trick involves donning the disguise of a new customer and seeing whether you get better treatment.

Go to your own insurer’s website or call them up. Pretend you’re a new customer and get a quote using most of the same details as your current policy (you might have to ‘disguise’ yourself with your neighbour’s address or by not entering your licence plate as they will probably have yours saved).

Compare the two. Are they charging you more than a new customer?

The insurance industry – like banking and energy – has been built on this ‘front book/back book’ business model where new customers get very good deals to entice them in, which are bankrolled by old, loyal customers who get a higher premium every year and don’t complain.

There’s even research to suggest the average ‘new customer’ discount can be more than 25 per cent on home insurance, for example. Former ACCC boss Allan Fels also found that ‘quotes [can] range from say $1000 to $2700 for the same house and contents at a specified address’.

‘It seems that like banks and energy companies, insurers count on the loyalty of existing customers to offer discounts to new ones,’ Prof Fels said.

Finding a better deal on insurance isn’t as easy as utilities such as energy and telco because there are no comparison sites that cover all the big brands mentioned above.

IAG and Suncorp, which own those big brands, don’t like comparison websites – nor does Allianz.

But you can compare a range of smaller brands at those sites, which is a great way to start.

Or you can just go straight to another insurance company’s website and get a quick online quote.

There’s no single insurance company that is the cheapest for every customer type: they all target different ‘segments’ of the market.

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But some are cheaper than others and they tend to be the newer, smaller brands – albeit growing fast.

Look at their advertising for clues: if they talk a lot about prices or savings, they know that’s where their strength lies.

If they talk about trust and peace of mind and sponsor sporting stadiums and prime time TV shows, they’re probably not cheap as they have to bankroll all that marketing spend somehow!

There are a few changes you might be able to make to your policy too.

Pay annually if you can – sometimes paying monthly costs around 15% more.

Increase your excess, if you’re prepared to pay more in the event of a claim, and it can cut your premium by hundreds. I increased my excess by $200, for example, and my premium came down by $100 – so I’ll come out ahead if I only have to claim once every few years.

Check your annual mileage and tell your insurer if it’s dropped. With around 40% of us now working from home for some of the week, this can cut your premium by hundreds too. So can limiting drivers to over 40 or over 50 if no one younger is driving your car.

You might also be better-off opting for a cheaper “market value” policy rather than “agreed value”, because your car’s market value might be more than it was a few years ago.

Compare Club’s GM of car insurance Eayl Machlis explains: “Typically, insurers will offer market value at a cheaper rate, because the car will depreciate in value.

But because of supply chain issues, used cars have gone up in price and are often worth more than insurers will offer as a top limit of agreed value”.

Joel Gibson is the author of Kill Bills and Easy Money. He’s spent the last two decades hunting down money-saving tricks, hacks and loopholes and sharing them with households via his books, regular media appearances, and on TikTok, Instagram and Twitter.

This advice is general and does not take into account your objectives, financial situation or needs.

You should consider whether the advice is suitable for you and your personal circumstances and seek advice from a broker or adviser before acting.