Smart ways to save on insurance


As the cost-of-living crisis continues to hurt the hip pocket, insurers are rolling out new technologies and a range of pay-as-you-go options to help keep Aussies covered with a potentially smaller price tag.

Insurers are aware that the current financial crisis is impacting Australians in different ways and that there's no 'one-size-fits-all' approach when it comes to the type of cover they offer.

From contents insurance to accident cover and car insurance, there are more options than ever for Australians looking to spend less on premiums but still have the peace of mind that they have cover in place should the worst happen.

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Car insurance

Several players in the car insurance space are changing the status quo and rewarding those who drive less or drive safely. For example, Carpeesh uses a driver safety app to track your speed, brake and accelerator use to provide feedback on your road behaviour.

Good drivers earn points that can help them attain lower premiums in future.

Meanwhile, Oceania cuts down on costs by using 'digital-first' tools like chat rooms to deal with claims. Motorists who use apps to make claims also stand to save time by avoiding long waits on the phone.

Koba is another option that uses a pay-as-you-drive model to reduce insurance costs. After paying an upfront fixed fee, drivers only pay for the kilometres they drive thanks to an app that connects to a matchbox-sized device sent to you when you purchase a Koba policy.

The rolling fee can be as little as a few cents per kilometre, depending on other risk factors.

Of course, many insurers also offer low-kilometre car insurance policies, which may come with a lower premium in exchange for you driving less. If you're working from home more, catch public transport to work or only use the car on weekends, these types of policies can give you all the bells and whistles of comprehensive car insurance, but at a lower cost.

However, be aware that you could pay a higher fee or incur a higher excess if you drive over the specified annual driving limit, so keep this in mind if you're looking to budget.

Accident cover

Flip is one of Australia's first 'on-demand' insurance policies for Australians seeking accident cover. Not to be confused with health insurance, this type of accident cover means you can choose to pay for cover when you think you're most likely to need it, activate it instantly and have cover with no waiting periods. For example, you might buy cover when you're taking on a high-risk activity or sport like bungee jumping or skateboarding.

Flip's Accidental Injury Insurance policy has three main cover options:

  • Cover for a single day for $7
  • Cover for a single week for $25
  • Monthly subscriptions for $40.

Flip only provides cover for injuries caused by accidents. For example, if you developed shin splints playing a team sport, you wouldn't be covered because the injury formed over time.

But, as most health issues are totally unexpected, the pay-as-you-go model is not going to be a suitable option for everyone.

Traditional private health insurance is designed to cover a huge range of benefits, such as mental health, physiotherapy, pregnancy, orthodontics, and much more. And traditional private health insurance may help you at tax time to avoid the Medicare Levy Surcharge, depending on your circumstances.

Contents insurance

Recent Compare the Market research found that 7.5% of Aussies surveyed said they planned on ditching their contents insurance when their next renewal comes through. Meanwhile, 5.7% flagged that they would reduce the sum-insured amount.*

Enter Honey Insurance, a relatively new player focusing on smart technology to potentially reduce the need to claim on your insurance. Essentially, Honey uses new technology to alert households to avoidable accidents. If you sign up to a plan, you're sent a smart home kit, which includes smart home sensors that monitor for fire, water leaks, and theft.

While it's not a pay-as-you-go model, the idea is that the technology helps prevent claimable events to lower your premiums. In fact, Honey says it will slash premiums by up to 8% annually simply for keeping your sensors turned on.

No matter what your specific needs and requirements are, now more than ever, there is likely to be a product to suit you - and at the price you're happy to pay.

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Chris Ford is the general manager of media and communications at Compare the Market. He studied journalism at the University of Queensland, and has more than 13 years' experience in media.