Car insurance claims: What’s the pay-off?

Family after a car accident calling to claim insurance

Most drivers will take out car insurance to protect their vehicle and finances in the event of an accident or emergency.

So, while you want to make sure you’re getting a good value deal on your premium, you should also know what kind of payout you’ll get if you need to make a claim.

The Australian Prudential Regulation Authority’s (APRA) most recent data on car insurance claims shows the average payout in 2019 was $3,362. This excludes claims made under CTP insurance, but covers all voluntary domestic motor vehicle insurance claims, from third party car insurance claims to cover under comprehensive policies.

If APRA only assessed comprehensive policies, it’s likely this number would be much higher. This is because third party cover only insures drivers for a limited amount of damage they cause to other people’s cars and property (often only up to $5,000 as standard) and not to their own.

Is it worth making a claim on car insurance?

In most scenarios, yes. Whether it’s cover for repairs and towing for your own wheels or for damages to other cars, costs can stack up and you don’t want to be left with a bill or no ride.

However, some minor cosmetic damages might not be worth covering through insurance because of your excess (the amount you pay before your insurance kicks-in). 

Say you’ve got an excess of $800 and you ding the front of your car on a cement wall. Paying a mechanic to iron out the dent and do a minor paint touch up may cost less than paying your excess to access insurance cover. Couple that with the risk of losing your no claims bonus, and an insurance claim is not adding up in your favour.

Some insurers approach this ‘excess versus repair cost’ conundrum by offering things like low-excess or excess-free windscreen cover. This way customers can access the most cost-effective repair route for this kind of common minor damage. 

How much should you pay for car insurance in 2020?

The average cost of a comprehensive car insurance policy in Australia is $952, according to Mozo’s 2020 Car Insurance Report.

However, this can differ considerably depending on factors like your gender, age, where you live, your driving history and even the colour of your car.

Price hikes for Australia’s youngest drivers (aged 16-20) are particularly substantial, with the average cost sitting at a whopping $1,608 if they take out their own comprehensive policy.

But prices do vary considerably between providers for all motorists. Mozo’s report found a $902 difference in comparable cover across the 10,000 car insurance quotes that were analysed.

If you want to find a policy with an affordable premium that also has generous cover, the best thing you can do is research policies thoroughly. Assess every Product Disclosure Statement (PDS) carefully and compare car insurance policies you’re considering.

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Search promoted car insurance below. Advertiser disclosure. Important information on terms, conditions and sub-limits.
  • Gold Comprehensive Car Insurance

    Monthly premiums
    Calendar icon
    Yes Costs Extra
    Choice of repairer
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    Optional Extra
    Choice of excess
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    $500 - $1,850
    Agreed or market value
    Car coin icon
    Agreed Or Market

    Available discounts

    • Online Discount Up To 15%
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    Details
  • Comprehensive Car Insurance

    Monthly premiums
    Calendar icon
    Yes Costs Extra
    Choice of repairer
    tools icon
    Optional Extra
    Choice of excess
    coins icon
    $400 - $1,850 (varies By State)
    Agreed or market value
    Car coin icon
    Agreed Or Market

    Available discounts

    • No Claim Discount
    Go to site
    Details
  • Comprehensive Car Insurance

    Monthly premiums
    Calendar icon
    Yes
    Choice of repairer
    tools icon
    No
    Choice of excess
    coins icon
    $500 - $5,000
    Agreed or market value
    Car coin icon
    Agreed Or Market

    Available discounts

    • Pay As You Drive Cover With Pricing Tiers Available For Limited Kms.
    Go to site
    Details
  • Comprehensive Car Insurance

    Monthly premiums
    Calendar icon
    Yes Costs Extra
    Choice of repairer
    tools icon
    No
    Choice of excess
    coins icon
    $800 - $2,000
    Agreed or market value
    Car coin icon
    Agreed

    Available discounts

    • No Claim Discount
    Go to site
    Details

*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 on the provider's website for further information before making any decisions about an insurance product.

Any information provided on this page should be considered a summary and general advice only. All information should be verified before purchase via the relevant Product Disclosure Statement (PDS).

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Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

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