RateCity urges Australians to compare car insurance on all features – including price

December 16, 2010 (PRLEAP.COM) Business News
December 16, 2010, Sydney - With annual renewals for car insurance looming for many drivers in January, Australia's best financial comparison website RateCity is urging Australians to compare compare car insurance on all features including price, following its national study into the cost differences of comprehensive car insurance.

The study compared quotes across 27 comprehensive car insurance providers using the same driver profile of a single male aged 30 years-old with a clean driving record, retaining his Rating 1 No Claim Bonus discount, driving a 2005 Toyota Corolla.

Four different suburbs were surveyed in each of the six Australian cities in the study and an average cost was found for each city as well the average difference (the difference between the highest and lowest costs). The national average was then calculated and RateCity found a $724 difference in costs which is a 60 percent variance (see table below).

Average difference between highest and lowest quotes

Adelaide $ 625.78
Brisbane $ 549.34
Melbourne $ 975.27
Perth $ 569.22
Canberra $ 698.06
Sydney $ 928.09
Overall average $ 724.29

Source: RateCity

The average comprehensive car insurance cost for each city shows significant differences. The study showed that the most expensive city in Australia to insure your car with comprehensive car insurance was Sydney with an average cost of about $1,135 and the cheapest was Brisbane with an average cost of about $654 (see table below).

Average costs for each city in RateCity's comprehensive car insurance study

Adelaide $ 659.86
Brisbane $ 654.39
Melbourne $ 948.29
Perth $ 664.91
Sydney $ 1,134.52
Canberra $ 746.07
Difference between
highest and lowest $ 480.13

Source: RateCity

Damian Smith, RateCity's CEO said it was wrong for the dominant car insurance companies (IAG and Suncorp Metway) to be dismissive of price comparison as a key requirement for drivers.

"It's clear that there are potentially hundreds of dollars to be saved in shopping around for car insurance. Given the increases in home loan repayments over the past 18 months, these are really important and significant savings for Australian drivers.

"Drivers should be sceptical of calls to forget about price comparison when they come from insurers with overwhelming market share, and premiums that are often higher than those of newer competitors."

Mr Smith said RateCity lists 29 key features for each car insurance provider listed on its site to help drivers make an informed decision about the best car insurance policy to suit them. These include maximum no claim bonus rating, the option of agreed or market value, ability to increase your excess for a premium discount, to paying monthly at no extra cost.

"Features other than price are obviously vital, which is why we and other comparison sites try to list as many product attributes as possible. We also urge drivers to read product disclosure statements very thoroughly, and ask questions about claims experience.

"But when our car insurance study shows that there are sometimes 60 percent differences between the highest and lowest costs for the same driver profile, price is clearly a major issue and drivers have the right to really compare and shop around," said Mr Smith.

Driver Profile: single, 30 year-old male who has an excellent driving record and wants to retain his Rating 1 no claim bonus. He drives a 2005 Toyota Corolla.

Please note: This research exercise sought car insurance quotes from company websites between July and September 2010. It does not purport to be completely comprehensive, and we acknowledge that issues such as loyalty discounts and other items may mean that actual premiums charged are different from these figures. The unwillingness of some insurers to share data and pricing on issues such as loyalty discounts makes it impossible to include these potential savings. We also acknowledge that issues other than price may be important to many drivers, and urge all drivers to review all terms and conditions and read Product Disclosure Statements carefully before purchasing car insurance. However, we believe that the indicative levels and relativities between quotes are accurate, and provide an important indication to Australian drivers about potential savings.

For more car insurance articles and car insurance news, visit the RateCity site.

For Further information please contact:
Michelle Hutchison
Consumer Advocate & PR Manager
Tel: +61 2 8917 8005

About RateCity
RateCity (www.ratecity.com.au) is Australia's best financial comparison website, where Australians can easily search, compare and apply for over 13,000 financial products from credit cards to home loans to car insurance from over 250 institutions. Our job is to take the hassle out of finding the right financial products online saving our users both money and time.

RateCity is a private company with an AFS Licence (AFSL: 316 710), powered by CANSTAR CANNEX, in partnership with ninemsn.

To the extent that any RateCity Pty Limited data, ratings or commentary constitutes general advice, this advice has been prepared by RateCity Pty Limited ABN 12 122 743 542 AFSL 316710 and does not take into account your individual investment objectives, financial circumstances or needs. Information provided on and available from this site does not constitute financial, taxation or other professional advice and should not be relied upon as such. RateCity Pty Limited recommends that, before you make any financial decision, you seek professional advice from a suitably qualified adviser.

Product Disclosure Statement relating to the product should also be obtained and considered before any decision about whether to acquire the product.

Please refer to RateCity's FSG for more information.