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Costly mistake 65 per cent of Aussies make when paying painful insurance bill

Insurance bills are going up, but a money saving expert has some options to claw back some cash.

Bills and Australian money
With insurance premiums on the rise, it's important to make sure you aren't paying more than you need to. (Source: Getty)

Insurance premiums are rising faster than they have for 23 years and I’ve never seen people so furious about the cost of cover. But all is not lost.

Unfortunately, there is no silver bullet. But I've put together a list of 15 things you can try to get your premium down.

Some of these tricks won’t make sense for you. However, one or more of these strategies could save you hundreds of dollars on a policy, if not thousands across multiple policies.

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Around 2 in 3 of us do this and it allows insurance companies to ratchet up the premium every year while (in the case of car insurance) reducing the cover.

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This is known as “price walking” or “the loyalty tax” and it’s now banned in the UK but still common here.

Mystery shoppers are undercover customers hired by the owners of a shop to test their staff and report back on their customer service.

But you can be a mystery shopper for your insurance company by going to their website or calling them up and getting a quote as if you were a new customer.

Research says new customers pay 25-35 per cent less on average because of the “loyalty tax” charged by insurers.

But if you get a new customer quote and catch them out charging you extra and then ask them to match it for your renewal, often they will play ball.

Worst case scenario, you might be able to cancel your policy and just start a new one at the lower price.

These are the smaller, price-focused brands that are trying to win “rusted-on” customers from the big guys, so they have to try harder.

Try Budget Direct, Woolworths Insurance and new provider Aldi Insurance, for example.

These get a bad rap in insurance, because the big brands (NRMA, RACV, AAMI, GIO, Apia, QBE, Allianz etc) refuse to appear on them.

So you can only compare the smaller providers. But so what?

They’re still a good money-saving weapon and they’re easy and free to use, so make them part of your armoury. Try Compare Club, Compare the Market, Finder or Canstar, for example.

The big cashback sites are now getting into insurance as well.

You might be able to collect another $70 or 7 per cent of your premium if you click through to take up a new insurance policy via a cashback website. Worth checking!

This is the amount you’ll pay if you have to make a claim.

A higher excess means a lower premium and vice versa, so it’s a balancing act.

But this is one option if you need to save.

This is also a trade-off, but it can be a way of reducing your premium.

If it’s a car, you can choose between “market value” (which is fixed) or “agreed value” (which you can adjust).

If it’s a home, you can change the amount you think you’ll need to rebuild it or replace the contents.

Use online calculators to test the value of your car, home and contents and make sure you’re not OVER-insured or UNDER-insured.

Some insurers give you say 15 per cent or 20 per cent off for taking out multiple policies so it’s worth checking.

But don’t assume that makes it cheaper: sometimes they jack the price up so much before applying the discount that it makes little difference.

Again, don’t assume these will cost less but do check.

If you’re over 50, some insurers give you special treatment.

Apia and Truecover, for example, ONLY offer cover to the over-50s, while NRMA has a product called Home@50 which doesn’t require you to pay a basic excess if you make a claim.

Insurers toss all sorts of goodies into some policies, which pump up the price. They’ll offer you motor burnout cover, portable contents cover, windscreen cover, accidental damage cover, extra hire car cover and so on.

Ask yourself if you really need these “upsells” and remove them if you don’t.

Some insurers give discounts for drivers with no claims.

I’ve seen it happen on CTP Insurance in NSW for drivers with no demerits when you compare at the government site here.

So if two people drive the car, make the “main driver” the one with the better driving record and see if the premium drops.

Do you only drive 5,000 or 10,000kms a year? Tell the insurer! They’ll usually reduce the premium.

No one under 30 or 40 driving your car? Again, tell them! Younger drivers and much older drivers are statistically more risky so if you exclude them, you’ll save.

There are several types of Car Insurance and downgrading from Comprehensive to “Third Party Fire & Theft” will save you hundreds if you don’t require full cover. Or are you paying $2000 for comprehensive insurance on a $5000 car? At some point, the sausage might not be worth the sizzle, as they say.

It now has over 12,000 signatures calling for three simple government reforms that could make it easier to save on cover.

Joel Gibson is the author of EASY MONEY and a regular guest on TODAY, 2GB, 4BC & ABC Radio. He posts daily about money to over 25,000 followers on TikTok & Instagram. This is general advice only. It doesn't account for your specific needs. Please consider your own situation before making financial decisions.

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