Car Insurance - When to change

[GoingFishing]

Gday Raiders

I am appealing to the collective wisdom of all raiders , whoever is willing to provide some advice much appreciated.

I purchased a Toyota Camry new in 2011, its value at the time was $32K.

The current market value is between $10k and $12k, whilst my car has low kms (120,000km) it has some dings and bumps courtesy of the wife, and the inside could do with a very good detailing courtesy of the kids. If I was to sell it I would estimate it would be on the lower end of the market value at around $10k.

My current comprehensive insurance policy costs $1900 per annum, I got a quote today from my same insurer to change this to third party at $592 per annum.

I am thinking given the market value of the car, paying one fifth the value in insurance yearly it is no longer worth comprehensive insurance and changing to third party. I have a second car which I can use, in the unlikely event the first is totalled.

What are everyone's thoughts?

[Berleyguts]

Wow! $1900 p.a. seems very expensive! Are you under 25? What is your excess? You can reduce your premium by having a higher excess. Also, having all your insurance policies with the same company gets a better discount, as does loyalty and a good driving and claim record. I also like to consider how the company deals with a claim if you have to make one. NRMA has always been good to us in this regard. Very quick and helpful. Also, we always choose “agreed value”, not “market value”.

Edited January 8, 2019 by Berleyguts

[GoingFishing]

2 minutes ago, Berleyguts said:

Wow! $1900 p.a. seems very expensive! Are you under 25? What is your excess? You can reduce your premium by having a higher excess. Also, having all your insurance policies with the same company gets a better discount, as does loyalty and a good driving and claim record. I also like to consider how the company deals with a claim if you have to make one. NRMA has always been good to us in this regard. Very quick and helpful. Also, we always choose “agreed value”, not “market value”.

I am over 25 😂........but i have a........bad driving history.

Ive been with NRMA for over 10 yrs and hold 5 policies. 

I am more interested in everyones views on financial viability and can tell you with certainty i cannot get par for par comprehensive insurance for less than what i have now without reducing coverage.

[zmk1962]

Hi Sam,

Here are some of my thoughts - BTW I lean toward comprehensive cover.

My experience is changing the value down only changes the premium very marginally - so you might as well have the value as high as possible.

If you say your car is worth 10-12market value have you checked what NRMA would insure it for at maximum Agreed Value? I'd guess it would be about 12-13k.  Most peoples car could do with a clean - its basically the km and mechanical condition that would place that. I think you can experiment on the NRMA website with the Agreed Value Range.

You are going to spend $595 on insurance anyway... so you could take a view that its really costing you: 1900-595= 1305 to insure your car for the max Agreed Value 12k.   Which makes 1305/12000= 10.8%  

Thats what you will be paying to protect yourself from the theft of the vehicle or if it was damaged/written off. Only you can make the assessment of how likely that is.

BTW usually if damage is = >50% of agreed value of an older car, they are written off.   In my experience 6k of damage is NOT hard to imagine on a car these days.   (My daughters Micra rolled into a car at <4km/h - popped the front plastic fender, dented the bonnet and the horn pierced the radiator = $3500 damage !!!! If it was 15km/h I reckon they would have written the car off.)

In your case what would happen if you only had 3rd Party and the accident was NOT your fault. The other drivers insurance company would make a market value assessment of the value of your car and probably declare it a write off ( always puzzles me how they make a fair assessment if they are looking at it smashed) -  and you would have to stand alone against the other insurance company to fight for a fair value settlement.  In the meantime no car, no money.

On the other hand, if you had Comprehensive on your vehicle it would be your insurance company armed with a contracted agreed value - talking on your behalf to the other insurance company.

So as I said, it comes down to the likelihood of total loss - theft or accident.  In my case the likelihood of total loss increases with older cars because of that write-off practice - doesn't have to be your fault.

The other thing is as Baz said, I would push up the excess to the highest you are comfortable to pay in the event of an accident (that is below the write off amount) so that you bring the premium as low as possible - after all you are only insuring yourself for the total loss of the vehicle.

Minor bumps and scrapes you fix outside policy as they are always below the excess.

Cheers Zoran

 

 

[Berleyguts]

On 1/8/2019 at 4:38 PM, zmk1962 said:

Hi Sam,

Here are some of my thoughts - BTW I lean toward comprehensive cover.

My experience is changing the value down only changes the premium very marginally - so you might as well have the value as high as possible.

If you say your car is worth 10-12market value have you checked what NRMA would insure it for at maximum Agreed Value? I'd guess it would be about 12-13k.  Most peoples car could do with a clean - its basically the km and mechanical condition that would place that. I think you can experiment on the NRMA website with the Agreed Value Range.

You are going to spend $595 on insurance anyway... so you could take a view that its really costing you: 1900-595= 1305 to insure your car for the max Agreed Value 12k.   Which makes 1305/12000= 10.8%  

Thats what you will be paying to protect yourself from the theft of the vehicle or if it was damaged/written off. Only you can make the assessment of how likely that is.

BTW usually if damage is = >50% of agreed value of an older car, they are written off.   In my experience 6k of damage is NOT hard to imagine on a car these days.   (My daughters Micra rolled into a car at <4km/h - popped the front plastic fender, dented the bonnet and the horn pierced the radiator = $3500 damage !!!! If it was 15km/h I reckon they would have written the car off.)

In your case what would happen if you only had 3rd Party and the accident was NOT your fault. The other drivers insurance company would make a market value assessment of the value of your car and probably declare it a write off ( always puzzles me how they make a fair assessment if they are looking at it smashed) -  and you would have to stand alone against the other insurance company to fight for a fair value settlement.  In the meantime no car, no money.

On the other hand, if you had Comprehensive on your vehicle it would be your insurance company armed with a contracted agreed value - talking on your behalf to the other insurance company.

So as I said, it comes down to the likelihood of total loss - theft or accident.  In my case the likelihood of total loss increases with older cars because of that write-off practice - doesn't have to be your fault.

The other thing is as Baz said, I would push up the excess to the highest you are comfortable to pay in the event of an accident (that is below the write off amount) so that you bring the premium as low as possible - after all you are only insuring yourself for the total loss of the vehicle.

Minor bumps and scrapes you fix outside policy as they are always below the excess.

Cheers Zoran

 

 

Yep, agree with Zoran on this. We choose a higher excess. Remember, you only pay it if you’re at fault (or hail damage) or can’t name the other driver at fault. You can also opt out of hire car options if not necessary and windscreen replacement if you want.

Of course, choosing the higher excess hurt us last year, with 3 claims in 12 months! Ouch! However, insurance is a gamble - you are betting that you are going to need it!

I have had 3rd party property damage cover before - on a $1000 car.

Edited January 9, 2019 by Berleyguts

[GoingFishing]

Thanks gents for your replies. 

I will take it under consideration ! 

The other thing to consider is that my wife drives the car probably 3 times a week and 90% of those trips are less than 3km each way....it gets bugger all usage.