1 in 5 drivers might cancel car insurance during COVID-19

Person with no car insurance pushing car

Many Australians are struggling to afford their car insurance right now, according to Mozo’s 2020 car insurance report.

Survey data informing the report shows 32% of motorists consider their car insurance a financial strain, with one in five drivers thinking about cancelling their policy.

Another 25% of respondents said they had already cut their cover.

If you drive less, should you pay less?

Many car insurance customers would argue on the affirmative of this statement since travel and social restrictions introduced to curb the spread of COVID-19 have kept cars confined to garages.

Some insurers have responded with premium discounts for set periods, often not even requiring customers to prove they’re driving less often or facing financial hardship as a result of the pandemic.

Existing pay-as-you-drive car insurance policies reward customers who drive fewer kilometers over the course of their policy period with a lower premium. If it’s measured monthly, this can often be adjusted to suit a spike in travel (like if you take a roadtrip), and you can usually top up your kms (for a premium bump) if it looks like you’ll surpass the policy limit.

How to haggle on your car insurance in 2020

If you are using your car less or simply want a better deal on your car insurance, then put on your haggling hat. If your negotiating skills are a little rusty, follow these steps to haggling success:

1. Do thorough research.
You can start by scouring Mozo’s car insurance comparison page for a deal you can ask your insurer to match or beat. Then investigate other discounts you could potentially access. 

2. Acknowledge COVID-19.
It’s been a helluva year and your insurance provider knows it. If you’ve reduced your kms for whatever reason or are struggling financially right now, let your insurer know. You may be able to get additional concessions on top of a temporary COVID-19 discount.

3. Don’t accept the first offer.
Insurance customer service providers will often present a discount offer as soon as you ask – don’t necessarily accept this. It’s likely they can do better, so push a little harder to see how far they’ll go.

4. Be prepared to bluff.
Even if you’re only vaguely considering alternatives, putting forward the prospect of an insurance break-up could help you get a better deal across the line. Tell your provider you’re willing to walk away so they know you’re serious (have quotes from other providers ready to go just in case).

5. Chat virtually if phones freak you out.
In this socially distanced existence, you’ll likely be haggling over the phone or online. If you're more comfortable with an edited manuscript than an impromptu speech, click on the chat bubble or email address instead of the call button.

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*Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.

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