How to haggle down your car insurance during lockdown

Olivia Gee

24 Apr 2020

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With many vehicles confined to garages as the need to drive diminishes during COVID-19, your car insurance may also be lying idle. Mozo Director Kristy Lamont says car insurers are undoubtedly seeing a decline in claims and should pass on the savings to customers.

“Car insurance costs have gone down, which in turn means the risk assumptions used to calculate premiums will also change,” Lamont says. “Australian car insurers should not take advantage of this at the expense of their customers. It’s time to reduce their premiums to reflect this.”

And the savings insurers could see is notable: if there’s a 50% drop in motorist claims on the road over three months, APRA estimates the car insurance industry will see a $605 million reduction in costs. 

Some insurers are already passing on a portion of the savings. They include major players Suncorp, GIO, AAMI and Apia, which are offering home and motor insurance customers a 20% discount or premium waivers for three months; Youi, offering a 15% a cash-back discount over three months; and QBE with a cash-back gift-card scheme the company says represents around 25% of the average private-use motor insurance policy from April to June.

RELATED ARTICLE: Is it time to consider ‘Pay-As-You-Drive’ car insurance?

Whether your wheels are covered by these companies or not, it’s prime time to drive down your car insurance costs. We know asking for a better deal over the phone or online can go from awkward to excruciating very quickly, so we’re arming you with some hot haggling tips.

Mozo’s tips to reduce your insurance premium

1. Do your research: Get the inside scoop with comparison sites like Mozo. You’ll find insurers commonly offer up to 15% discount to new customers online. Quote these numbers when negotiating and tell your insurer they’ll have to match to retain your business.

2. Acknowledge the current situation: Let your insurer know if you were an active driver and your car is now collecting dust. There’s a damn good reason for your request!

3. Don’t accept the first offer: Providers often lay out a discount straight off the bat - don’t necessarily accept this. It’s likely they can do better, so ask for more. 

4. Prepare to bluff: Even if you want to sit tight with your insurer, a potential break-up will get their attention (advice not to be used in human relationships). Tell your provider you’re willing to walk away so they know you’re serious.

Still not feeling confident about your bartering skills? Mozo has put feelers out for you and tested the car insurance waters. In a mystery shop experiment assessing Bupa, CGU, Budget Direct, GIO and NRMA, Mozo found all insurers agreed to discounts on policies when customers cited reduced car use due to the pandemic as the reason for their request. The eight undercover insurance shoppers used Mozo’s tips to drive a hard bargain, and received up to a 20% discount on their policies, amounting to a maximum $300 reduction per year.

RELATED ARTICLE: Coronavirus shutdown: key must-knows relating to income protection and life insurance.

Looking for info about insurance as a renter? Find out if you need it and what's covered in our comprehensive guide to renters' insurance

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