Insurance. The ultimate grudge purchase. We get it. No one really wants it, but everyone has it in some part of their life. It feels like renewals come around faster every year, but it doesn’t have to be that way. We are going to help you save on 3 of the most popular insurance segments. Car Insurance (Comprehensive), Health Insurance and Business Insurance.
1. Comprehensive Car Insurance
Australians love their cars. From an A to B get about to the family mover, they impact our lives every day. ASIC estimates 90% of all new cars sold in Australia are bought under finance. When you buy a car under finance, you usually must have comprehensive insurance until it is paid out under the contract. Plus, when you buy a new car the last thing you want to do is have something happen to it and then fork out the cash yourself to repair it.
So, when it is hard to get away from, you may as well get the best value you can.
The biggest mistake people make with Car Insurance is loyalty. Loyalty is very rarely rewarded in Insurance and Car Insurance is no different. Don’t feel obligated to stay with an insurer because that’s who you have always been with! The best thing you can do with Car Insurance is to shop around. Thanks to the digital era, it’s easy to get quotes online and simple things can have a big impact.
Additionally, a couple policy details to consider in order to get the best value are;
- What value are you insuring your car for? Some insurers will let you pick and some cover ‘market value’. The higher the value, traditionally means a higher policy cost. If you don’t need as much cover as they first suggest, insure your car for a lesser value.
- Chose your excess. The higher the excess the lower the policy cost. Be careful though, this one is risk vs reward. If you do select a higher excess and something happens, you must pay it. Consider your options and make sure you are comfortable. Some insurers won’t allow you to pick a different excess amount but keep an eye out when you are shopping around.
2. Health Insurance
Health insurance is even more relevant since the government brought in the Lifetime Health Cover Loading. So, the first tip on this one is easy. If you take out private hospital cover before your turn 31 you can avoid paying the governments lifetime health cover loading fee. If you leave it till after the 1st of July following your birthday, you may be required to pay an additional 2% on your premium until you take out private hospital cover.
Secondly, pay yearly if you can. Most insurers will offer you a discount if you pay for the year in advance as opposed to monthly instalments. Also, if premiums rise during the year, you won’t be slugged the extra until your 12-month renewal is up. However, on a monthly instalment, you will generally see the increase on your very next monthly payment.
Finally, know your cover. Given the highly flexible nature of health insurance, the more you know about your cover the better. Consider things like, if you have had children already, do you need to have pregnancy cover? What is in your extra’s policy? What level do you need? Most insurers will provide low, medium and top levels of cover. Explore the detail and decide based on your own personal needs and requirements.
3. Business Insurance
If you are a sole trader, small business owner or running a big enterprise there are so many different insurances covers for business. From Key Person Insurance, Cyber Insurance to Professional Indemnity Insurance there are so many options.
The first thing to do is understand your businesses risks. If you are a sole trader operating an online store, your exposure to risk is probably much lower than a large organisation but you should equally understand risks you may face. To get a better understanding, complete a simple risk matrix on your business.
Write down all the risks you can think of that your business is exposed to. Anything from day to day basics to extreme possibilities. Then you need to put them into a matrix. For everything you have written down, consider the likelihood the event may happen from low to high. Then consider the possible consequences. Anything that may have a high likelihood of occurring and a severe possible consequence should be tackled first. Then, work backwards.
Finally, speak to an insurance broker. Insurance brokers are quite common in Australia and their day to day is to live and breathe insurance. They will learn about your business and understand your situation. Then, provide options they have found and negotiated for you. The best part is, they are remunerated when you take out a policy. If you aren’t happy you don’t have to proceed. So, a positive outcome for you, is a positive outcome for them.
Insurance is apart of life. If you are going to get it, spend the time to make sure you get the right product and pay the right price!