Is Car Insurance Set to Rise in 2012?

When it comes to car insurance premiums, prices have increased in the last 2 years from where they previously where, a big driver in this is the insurance premium corrections that are being applied to insurance policy‘s as a result of the Christchurch Earthquake..

Using an example of a current renewal that I have been working on, a 1995 Toyota Surf with a insurable value of $10,500 previously cost the client a total of $499 per year including GST and Fire Service Levy’s, that same car has renewed this year for $599 which is a 20% increase on last year’s premium. At the moment initial estimates are that car insurance will be set to increase at least a minimum of 10% on last year’s premiums as a result of insurers looking over their books and making underwriting changes.

Of course there are ways, if your premiums start looking high, to cut the cost.

One way is to pay your car insurance in a lump sum as opposed to monthly instalments as this can save you an average of 8% per as most people do not realise that you pay more if you elect to pay your premiums monthly as insurers and premium funding companies charge for the privilege to be able to make monthly payments to your insurance.

If you don’t have the funds in the bank to make a lump sum payment then people might want to use an low interest cent credit card to pay for the policy – the cost of which can be lower than the amount charged by the insurer.

You also need to look at combining your insurances with one provider as if you place your car insurance and house or contents policy’s in one place then you will qualify for a multi-policy discount for purchasing both from a single insurer, helping you to save on car insurance and your house or contents policy.

When discussing your quote with your insurer, specifically ask about any other discounts you may qualify for, such as low-mileage driving which is currently offered by NZI, or the installation of car alarms or immobilisers.