Shopping around for insurance

As I noted in March, a bunch of my annual expenses fall together. This is a consequence of having bought both my house and my car in the month of August. Apart from the insurance on both of them, the car rego also happens to fall in August.

I had been pondering why my home and contents insurance renewal cost was so expensive. This in turn led me to wondering if the contents was actually worth insuring. Sure there’s the fire risk, but in terms of theft, I have very little that is (a) worth very much and is (b) likely to be stolen.

Instead of just blindly renewing like I have previously, I shopped around and to my surprise found that AAMI gave me an online quote that was about half the price I’d been paying. I seem to recall that the old company I’d been going through had stopped taking on new policies, and my assumption now is that they were trying to price themselves out of the market. Well it’s worked on me. Presto, $400 saved!

Last year I needed car insurance in a hurry, and went with AAMI (which will cost me $545 to renew), noting that when I had more time, being someone who uses his car less than most, I’d check out Pay As You Drive.

I really like PAYD as a theory. But the problem with their web site is that it can’t handle someone like me who three days per week parks his car in a street near a railway station. They’re web site wants an exact address. I queried this via their online form and they said to ring them up to get a quote.

I suppose insurance is all about risk, but do they really take into account this level of detail when calculating the premium? Wouldn’t a postcode be sufficient? In any case I hate ringing up companies and spending time on the phone because their web sites are broken like this, so I keyed in a guess as to where I might park to get an indicative quote. It came out at $385, based on 8000 km of driving for the year, which is my best guess at the moment.

Then I got a quote off Bingle, which is actually an online-only budget subsidiary of AAMI. (Online-only and budget suits me fine give I’ve never had to make a claim.) It came out at $462, with unlimited kms, and no getting fussy about where you park in the daytime.

How busy am I this week, and how much do I hate dealing with this stuff over the phone? Well I’ve got a few more days to get it organised, but if I don’t have the time to make the call, I suspect the answer will be $77.

Update lunchtime: I went back into the Bingle online quote and confirmed the details (and possibly added some stuff that wasn’t in the preliminary quote) and to my surprise the premium dropped to $418.66. It may have been because I originally said I bought it less than 12 months ago, but it turned out to the web site this means since September 2008. Since I bought it in August, this appears to count as more than 12 months go… perhaps having owned the car for longer and not having claimed means lower risk? Oh well, whatever. Sold!

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7 Replies to “Shopping around for insurance”

  1. I had a quick look at them, but it’s too much hassle – they want a shirtload of details just to give you a quick quote. The others only ask for all that once you decide to buy.

  2. When I was looking around for new car insurance earlier this year, I found it a hassle too. And it seemed all of the sites were different. If there was a proforma they all used (so you didn’t need a,b,c details for one, and x,y,z for another, then a,c,y for the third and so on) it would be a lot easier.

    And yeah – ringing for a quote – no thanks! I should be able to do it all online with no issues.

    Good luck! I know a “Virtual assistant” who can help you ;) But she’ll charge!

  3. Three years ago changed from RACV home contents to AAMI because they were considerably cheaper. This year, changed back to RACV, because they were now considerably cheaper. Odd.

  4. Look at it from the insurer’s position. When you’re calculating the probability of a customer making a claim, just knowing the post code wouldn’t be enough. They could be parking the car on a quiet side street that has only 6 reported incidents in the last year, or a busy main road with 2 reported incidents per week. If you don’t get any more specific than the post code the company may, understandably, err on the side of caution and assume you park on the main road.

  5. Sure, but there’s a law of diminishing returns here. For instance they all ask about where you leave your car during the day (implied to be a weekday) but none ask where you might drive it and leave it on the weekend.

    And if you’re going to ask for a high level of detail, presumably so it can go into your calculations for the premium, then you should make sure your web site is capable of asking for that. PAYG’s isn’t.

  6. Hey Daniel,

    First of all, sorry that it’s taken me so long to get back to you. Your blog didn’t come up in our alerts. Had I been aware of your post earlier, I would have responded right away.

    I actually look after the Pay As You Drive website and your feedback is incredibly valid. When we ask for the address, we actually mean the address where you keep your car at night, that is, the address where you live. In fact, we’ve already changed this wording in order to clear things up a bit for our potential customers. I see that you posted this on August 18. We released a new version of our quote line on August 21st, which includes an update to make the address field clearer.

    Perhaps you can have a look at our new quote and see if you think it’s an improvement? I’d really appreciate your feedback. If you like, you can email me on magda.walczak@realinsurance.com.au with any further suggestions you may have. One of our company values is Relentless Improvement and my job is to ensure that happens when it comes to our user experience on our websites. The best way I can do that is with feedback from users like yourself.

    Thanks again for your feedback and for thinking of us for your car insurance needs. I look forward to hearing from you.

    Magda
    eCommerce team at PAYD

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