A car insurance provider is taking the lead in providing affordable car insurance for Australia’s capital cities, as well as other parts of the country, according to new research.
The findings come as Australia is preparing for a surge in the number of drivers who choose to buy car insurance online, in order to protect themselves against claims.
But the National Insurance Institute of Australia (NIIA) said the research shows that people are increasingly using the internet to seek insurance.
The study, by financial adviser Andrew Tovey, examined insurance claims made on a nationwide basis between July 1 and June 30, 2017.
It found claims for cars, motorcycles and SUVs increased by around 40 per cent between July and June.
“We think that the big drivers of increase in insurance claims over this period were people seeking a lower rate of premium than they were able to get from a car insurance agent,” Mr Tovex said.
“A lot of people are going to be driving in the city and going out and getting the cheapest rates they can.”
“The main drivers of that were to do with the fact that people were less likely to have access to a car, so there was less insurance available to them, and the way that the car industry was run, so people were not getting the best rates, particularly for motorbikes.”
Mr Toveys research found that more than three quarters of all claims on insurance were made in Melbourne and Sydney.
“The only other big cities where there was a real drop in claims were Hobart and Darwin,” he said.
He said the main reason for the rise in claims was that car insurance agents were getting less money than they did in the past.
“People are going into the market and they’re looking for a cheaper price, so they’re going to get more insurance than they would have otherwise,” he told 7.30.
“So you see a lot of new drivers that are coming in and they don’t have the same type of experience with a car that they would get had they been buying from an insurance agent.”
He said a good way to get cheap rates on a car was to use the internet, and get a quote.
“If you get a good quote online, you can go online, and you can compare prices with other drivers and compare quotes online and you get the best prices,” he explained.
“You get the lowest rates, you get great rates.”
Dr Toveym said he believed there was some truth in the argument that car insurers were being overburdened by the number that were seeking car insurance through online insurance agents.
“They are overburdened, so if you can do it online, do it cheaper, if you have a good online agent you can get the same rates as if you were in the car insurance market,” he noted.
“And so if a lot more people are buying insurance through the internet and getting quotes through them, then I think that is a sign of the stress that the industry is under, and if you don’t know how to do it, it’s not going to work.”
Dr Tom Sowers is the chief executive of the Australian Insurance Institute.
He welcomed the NIIA’s findings and said that insurers would benefit from taking advantage of the new generation of internet-based insurance providers.
“There are so many people out there that are looking for the cheapest rate, and when you get that quote online you can see the cheapest, lowest rates that are available, and that’s the kind of insurance that you’re getting from a big insurer,” he added.
“[There are] new insurance agents, there are the big new insurers that have started to come in, but if you look at the other new insurance providers that are starting to come online, they are doing a lot better than the other insurers.”
Dr Sowers said that in many cases, people would simply choose the cheapest option online.
“The other big advantage of doing it online is that it’s the fastest way for people to go, you don, you’re not going out to a big retailer, so you can just get your quotes and do it as fast as you can, and they’ll get it within two hours.”
Topics:consumer-finance,consumer-protection,business-economics-and-farming,health,health-policy,car,federal-government,australia,melbourne-3000,sydney-2000,warringah-2000First posted June 05, 2018 06:46:36Contact Emily PappasMore stories from Victoria