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Aussie drivers warned of $1,456 cost

New research has revealed the best car insurance providers of 2023.

A composite image of Australian currency fanned out and drivers on Sydney a Sydney road stuck in traffic.
Aussie drivers have been told to check their car insurance and consider switching. (Source: Getty)

Aussie drivers are facing hikes to their car insurance premiums as inflation continues to rise, according to new research by Finder.

A Finder survey of 933 car owners revealed more than half (55 per cent) noticed a spike in their car insurance premium over the past 12 months.

The research found one in 10 didn’t know if their car insurance premium had gone up in the past 12 months, while 6 per cent didn’t have any car insurance as a fail-safe to protect them from unforeseen events.

One in 10 Australians listed car insurance as one of the top three bills causing them the most stress in March 2023, according to Finder’s Consumer Sentiment Tracker.

Insurance expert at Finder James Martin said Australia was dealing with record inflation, and car insurance costs were no exception.

“Car insurance premiums go up for many reasons, from higher parts and repair costs, to increasing crime rates and even natural disasters,” Martin said.

“It’s also costing more for insurers to process claims. This means you could see your premium rise despite no change in driving habits or claims being made.”

Price (46 per cent) was the most important factor Australians looked for when choosing car insurance. Other determining factors included comprehensiveness (32 per cent), and brand recognition (14 per cent).

What’s the best car insurance?

Finder reviewed 1,182 comprehensive car insurance quotes across 37 brands, rating policies on the comprehensiveness of cover, price, and value.

There was a difference of $1,456 between the cheapest and most expensive policy.

Youi’s comprehensive policy stood out as this year's Finder Award for Car Insurance – Features because it covered more than other insurers but was still a comparatively inexpensive policy.

Highly commended policies in the Features category included Hume Bank – comprehensive and Qantas – comprehensive.

Budget Direct's comprehensive car insurance policy won this year's Finder Award for Car Insurance – Value because it provided a similar level of cover to other insurers but at a lower price.

Highly commended in the Value category included ​​Hume Bank – comprehensive, and Youi - comprehensive.

Martin said despite the price hikes, there were ways to reduce your car insurance premium.

“Opting for a higher excess will reduce your premium – sometimes by a few hundred dollars – but you’ll need to pay more upfront if you need to make a claim,” Martin said.

“You could remove cover for under-25 drivers, if you're sure no younger drivers will have to use your car. You could avoid making claims for small scratches and minor dents as this can increase your premium each time you make a claim.”

Martin reminded drivers to look for discounts like sign-up offers, and to review their policies at least every 12 months.

“Remember, loyalty doesn’t pay – the best value policy today might be more expensive when it renews next year. You could save hundreds by switching providers,” Martin said.

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