What to look for when comparing car insurance quotes

Deputy Editor · 24 December 2020
Shopping for car insurance? If you’re looking to get a good deal, it can help to compare a number of car insurance quotes before deciding on a policy. Canstar explains some of the main things to look out for.

This article covers:

What is a car insurance quote?

A car insurance quote is an insurer’s estimate of how much you will pay in premiums for a policy based on information you have provided about yourself and your vehicle. In addition to an estimated premium amount, a car insurance quote will typically also include a range of information about the policy. This usually includes:

  • A quote reference number
  • The vehicle details (e.g. make and model)
  • The type of policy (e.g. comprehensive, third party property damage etc)
  • Any discounts applied to the premium estimate (e.g. any no-claims discount or a discount for paying annually instead of monthly)
  • The types of risks the policy will cover you for as standard (e.g. collision, fire and theft)
  • Any additional optional inclusions (e.g. windscreen cover, replacement hire car)
  • Any items stored in your vehicle that the policy will cover, such as baby seats or tools of trade
  • Any exclusions that apply to your cover
  • Who is covered by the policy (e.g. just drivers named on the policy or any driver, or drivers over a certain age)
  • The excess amount you would need to pay if you need to make a claim and whether a higher excess applies in certain situations
  • Whether the policy covers the vehicle for its market value or an agreed value
  • Where the car is intended to be parked during the day and at night
  • The average distance you plan to travel using the car
  • Other relevant information from the insurer

Types of car insurance quotes

There are different types of car insurance available to Australian motorists, and depending on the kind of cover you are looking for, the quotes you get back from insurers may show different information.

Comprehensive car insurance quotes

As the most expensive level of cover, a comprehensive car insurance quote is likely to contain and price in information that you wouldn’t see with other forms of cover. For example, a comprehensive car insurance quote would typically outline how much cover the policy includes for storm and flood damage, or damage to your vehicle due to a collision, even if you are at fault.

Third party fire and theft car insurance quotes

A third party fire and theft car insurance quote typically outlines the degree to which the policy protects you financially if you damage someone else’s property in a collision, or if your vehicle is lost due to theft or is damaged by a fire.

Third party property damage car insurance quotes

A third-party-only car insurance quote will usually contain less information compared to other types of policies, as it is a less extensive form of cover. The inclusions and the policy premium quotes will only relate to how the product would cover you financially if your vehicle damages someone else’s property.

Compulsory third party (CTP) or green slip car insurance quotes

Compulsory third party (CTP) or green slip car insurance is a mandatory form of car insurance. In some states and territories, it is included in the cost of your vehicle registration. However, in the Australian Capital Territory (where this kind of cover is known as motor accident injuries or MAI), New South Wales and Queensland, you may have the option to shop around and select a provider, so you may decide to get a number of CTP car insurance quotes. These quotes outline how the policies will cover you financially if another person dies or is injured in an accident where you are at fault.

What factors affect a car insurance quote?

Insurers calculate car insurance quotes based on the information you provide about yourself and your vehicle. Generally, the higher the level of risk an insurer associates with your application, the higher the premium estimate will be.

Here’s an overview of some of the factors that an insurer may take into account when generating a car insurance quote:

  • Your age and gender: Young male drivers pay the highest premiums on average, according to Canstar data.
  • Your record as a driver: If you (or another driver to be insured on the policy) have been disqualified from driving in the past, the insurer may charge you a higher premium on account of the greater perceived risk. On the flipside of that, if you have years of experience with no offences or insurance claims on your record, your premiums may be cheaper.
  • The level of cover: Higher levels of cover, such as comprehensive, typically mean you will pay more in premiums.
  • Optional extras: There’s usually a greater cost if you apply to be covered for optional extras.
  • Your vehicle: An insurer will likely factor in the make and model of your car, as well as the year it was manufactured, its current mileage and any safety features it has. If your car has been altered (e.g. window tinting) or you have added features (e.g. a spoiler or custom paint job) that would impact the cost of replacing or repairing it, you could be charged more in premiums.
  • Where you live: The crime and crash levels where you live may impact how much you pay for cover. Other location-specific risks such as flooding or other extreme weather events may also be considered.

  • Where your car will be parked at night: If your car will be locked up in a secure garage at night, insurers may provide a lower insurance quote than for a driver whose car will be parked on the street.
  • How much you drive: When requesting a car insurance quote, you’ll typically be asked how many kilometres you’ll drive each year. Generally, the less your drive, the lower your premium will be. During the coronavirus pandemic, drivers have been encouraged to let their insurer know if they have been driving less while working from home, in case they can negotiate a premium discount.
  • What you use the vehicle for: Different premiums may apply to drivers who use their vehicle solely for personal use, compared to a driver who also uses their car for ridesharing or other business purposes.
  • Market versus agreed value: Premiums are generally lower if the vehicle is insured for its market value (what it’s worth at the time of a claim)
  • Your excess: This is the amount you would need to pay if you make a claim. Generally, the higher the excess, the lower your premiums are likely to be.

How do I get car insurance quotes?

Most insurers in Australia will allow you to generate a car insurance quote via their website, or over the phone. Some insurers offer a discount on premiums if you apply for cover online, as it generally costs the insurers less to process applications this way.

Some of the information about your car can be gathered simply by you providing the vehicle’s rego, but you may need to input other details manually, such as the current mileage.

In addition to the various bits of information about you and your car outlined already, the insurer may ask you to provide further details that could impact what happens if you make a claim. An example of this is whether the car has finance outstanding on it and if so, from which lender. For certain kinds of claims, all or part of the payout would be made directly to the finance provider to clear the loan balance. Any remaining payout would be paid to the policyholder.

How do I decide which car insurance quote to choose?

When you are shopping around for car insurance, it can be a good idea to generate multiple quotes from different insurers. This way, you can compare your options before committing to a policy to help ensure you’re getting good value for money. Here are some of the factors that may help you decide which policy to choose:

  • The level of cover: Even if all of the policies are from the same tier (e.g. comprehensive cover), there may be differences in the level of cover on offer from one insurer to another. For example, some policies may cover personal items up to a certain value if they are damaged in a collision.
  • Payment schedule: If the insurer offers you the ability to pay the premiums monthly (rather than annually) at no extra cost, this could make budgeting easier. Of course, if you choose to pay annually, you may receive a discount.
  • The premium amount: If a provider is offering particularly competitive premiums, you may be tempted to go with them. Remember to check that in the process you are not sacrificing on cover that may ultimately be valuable to you.
  • Extra services: You may be swayed by additional services an insurer offers to make life a bit easier, such as being able to manage your policy and make claims online or via an app.
  • Product bundling: Some insurers offer a policy discount if you already have another form of insurance with them. For example, an insurer might discount your car insurance if you also have home insurance with them. While this can be tempting, it’s important to ensure that the policy represents good value even with the discount applied.
  • Star Rating: To help you navigate a variety of factors that contribute to how much value for money a comprehensive policy is offering, you could consider Canstar’s Car Insurance Star Ratings, which are based on the premiums, cover level and the features on offer.
  • Customer reviews: It may also be important to you to base your decision on the experience other customers have had with an insurer. Canstar’s Most Satisfied Customers – Car Insurer Award could form part of your research.

→ Related story: 10 tips to help you save on car insurance

Cover image source: macondo (Shutterstock)

This article was reviewed by our Sub Editor Jacqueline Belesky before it was published, as part of our fact-checking process.

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If you’re in the market for a car insurance policy, check out the table below which includes some of the car insurance policies on Canstar’s database for each of a 25-29, 30-39 and 40-49 year old male driver in NSW without an extra driver under 25 years old, with links to providers’ websites. The results are sorted by Star Rating, then by provider name (alphabetically). Check upfront with your provider and read the PDS to confirm whether a particular policy meets your needs before deciding to commit to it.

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