Car Insurance Comparison – Home, Life, Business & Travel Insurance Quotes

ANOTHER NEW PLAYER

Just this month, the Australian car insurance market has welcomed another player into its ranks. Progressive Corp is a US car insurance company, and has launched a new internet based car insurance product into the Australian market. The name of the product is Progressive Direct; which has been used to describe its online nature and the ability to bypass call centres and perform every aspect of the car insurance policy online.

The Australian car insurance industry is dominated by two big players: Insurance Australia Group and Suncorp. These two companies control around 75% of the Australian car insurance market, through brands such as NRMA, RACV, GIO and AAMI, as well as a host of other specialist insurance brands.

This market domination; combined with a large market size and rising car insurance rates has spelled the perfect time for other brands to undercut the big boys and capture some of the market share. The entry of Progressive Corp into the car insurance industry follows hot on the heels of a few other major new entrants, such as Virgin, Australia Post and Real Insurance.

It may seem that Progressive Direct is going to have a tough time slugging it out with the other new kids on the block, but their innovative business model and strong financial backing indicate otherwise. Last week they secured an APRA (Australian Prudential Regulation Authority) insurance licence, which indicates they have a tremendous amount of capital behind the Australian venture. Strong financial reserves may allow them to undercut the other insurance companies in premiums to gain a substantial market share.

IS IT ANY DIFFERENT?

The major difference with Progressive Direct compared to the other car insurance companies is the ability to perform all facets of the insurance policy over the internet. This includes signing up and purchasing policies, managing the policy, and even making a claim online. However, call centre support will be available to customers if necessary; especially for large payouts and complex claims.

With almost every other industry listening to customer requests and transforming themselves into more online friendly models, Progressive Direct has taken the first step for the car insurance market. They are specifically targeting customers who prefer to bypass those half hour waits while on hold to call centres, especially for simple matters such as changing an address on a policy.

Online insurance is tremendously popular overseas; particularly in the US where the parent company Progressive Corp is based. They are the fourth largest US motor insurer and have developed a business model based online, which provides them with a superior claims management process and lower costs. Currently only 8% of Australian car insurance sales are made online, which presents Progressive Direct with an excellent opportunity to gain a substantial market share once more Australians make the move to cheaper and more efficient internet based car insurance.

Australians who already perform their banking online are just one of the groups who Progressive Direct will be targeting as their customers. Similar to internet banking, customers will be able to manage their accounts online and save significant money at the same time. With other aspects such as providing quotes and taking policy details no longer requiring expensive staffing costs, Progressive Direct has drastically reduced their overheads. Providing customers with retail outlets is also another major expense which they have managed to cut from their outgoings with an online model.

WHAT DOES THE FUTURE HOLD?

Although they will probably be operating with the least overheads of all the Australian car insurance companies, Progressive Direct are not expecting a sudden jump to the top of the car insurance market. Instead, they are planning to gradually build their market presence; but at this stage have not revealed their specific revenue or profit targets.

Progressive Direct’s initial focus will be on using digital advertising to build a customer base for private car insurance. From there, they will gradually expand into commercial, motorbike and other vehicle insurance categories. No plans are on the cards to move into the general insurance market; such as providing home and contents insurance. If the move was to occur, they would need to find another company to underwrite the policies, since the parent company Progressive Corp is a specialist motor insurer.

All in all, don’t expect Progressive Direct to tackle the big boys of motor insurance head on, but instead offer a great value for money product that will allow them to carve their own niche in the car insurance market. The entry of Progressive Direct into the Australian car insurance industry is great news for consumers, with its online business model sure to keep the premium hikes under control and possibly even trending on the decline.

CAR INSURANCE CLIMATE

In Australia we are presently seeing a substantial reduction in car insurance premiums. Surprisingly, it is occurring at a time when an increase in the amount of claims has led to most major companies now having to increase their premiums to retain their profit margins. So if the major companies are increasing their car insurance costs, then how can consumers be getting a better deal overall?

There are two main factors behind the overall falls in car insurance premiums. Firstly, the market has been flooded with new entrants. The companies entering the market can not win customers by name and reputation since they are not established players. Instead, they are being forced to win over customers with premiums far lower than the big guns. This has led to a small price war, with many companies offering great deals in the car insurance market.

The internet has probably been the main factor behind the price drops, with many of the new insurance market entrants able to offer such low prices by adopting an internet based business model. With the major players having to increase their standard premiums, they have also been forced to introduce internet options. These are cheaper then their standard offerings and have been designed to offer a competitive product to their customers. Overall, the insurance price wars are good news for consumers, who stand to save thousands of dollars in premiums.

By exploring the online offerings through comparison services such as the one here at Zippy, consumers are estimated to save on average at least $200 in premium costs per year. The car insurance market is worth just under $10 billion per year, and with companies constantly modifying their offerings to maintain their share in the competitive market, car insurance comparison services are becoming increasing valuable to the general public.

HOW THE SAVINGS ARE MADE

The online insurance companies are able to offer such great savings generally because of lower overhead costs. Through the elimination or minimisation of many of the standard operating costs, these businesses are able to pass the cost savings onto their customers. It has come about from adopting a different business model to those employed by the major firms, and all indicators point to a successful future for many of the internet based insurance companies.

With an internet based business, there is less of a requirement for staff to man the phones and accept customer’s policies. Although some staff are still employed for claims and other administration duties, the total required workforce is vastly reduced; as are the associated costs for retail outlets, call centres, computers and headsets. Many companies also require the claims to be initiated online, which equates to further cost savings and the elimination of paperwork and postage costs.

A different approach to winning over customers is another reason why the internet based insurance companies are performing so well. The major companies are still using traditional forms of advertising, such as television and print media. While they are effective to a degree, their cost is extremely cumbersome and represents a large portion of the customer’s premium. Internet based insurance companies do not advertise in these mediums and hence do not pass these costs on to their customers. Instead, they concentrate on online methods such as partnering with car insurance comparison websites.

MORE EXPENSIVE, YET BETTER?

The extra overhead costs of the larger insurance companies are not the sole reason that their premiums are more expensive. They generally offer their customers better insurance products with a wider range of handy options. This is something consumers need to consider when looking at the cheaper options online, since a lack of certain options may either prove beneficial if they are not necessary, or potentially be a problem if an accident occurs.

A classic example of an option in question is that a cheaper company will only insure the policy holder as a driver, and exclude cover for any other drivers. If an insured person is positive that they will be the only driver of their vehicle, then the cheaper policy is clearly a better option. But if there is a chance another person may drive their vehicle, such as a drunken night out with friends or when a housemate grabs your keys and takes your vehicle down the shops without asking; then a traditional policy may be a better option.

The cheaper policies rarely include options that consumers normally take for granted. A lack of windscreen replacement cover and free hire cars in the event of an accident are just a couple of options that are unlikely to be included, and the option to retain your No Claim Bonus following an accident is almost certainly not going to be covered. Another new strategy employed by the online brigade of insurance companies is an option for pay as you drive insurance. This is advantageous for people who do not drive their vehicle frequently, since they are only charged on a per km driven basis.

The larger player’s online options will generally provide the same level of cover and options included in their standard policies. The savings are generated by passing the paperwork requirements over to the customer. Instead of hiring staff to man call centres, the customers can take advantage of the price savings by completing their policy applications and any future claims online. Greater savings can be generated by cutting out some of the standard policy features mentioned above, such as the windscreen cover or hire car options.

Whether you choose a budget insurance company or a major market player, you can all thank the internet for driving down your insurance costs. If you haven’t done so yet, it’s time to put the car insurance comparison websites to use and find the cheapest and best insurance deal for your situation.

Continued from What you should do after a car accident – Part 1

25 TIPS FOR AFTER AN ACCIDENT

• Never panic and leave the scene of an accident. It usually implies guilt and criminal charges may arise. Instead, turn off your vehicle and switch on your hazard lights.
• Assess both yourself and your passengers for injuries, then check the other vehicle’s occupants if necessary.
• In the event of an injury, call emergency services and attempt first aid measures.
• Move both yourself and your passengers to a safe area, most likely off the road and onto a verge or footpath.
• Do not discuss the accident with anyone and never admit fault in any circumstances. The only discussions you should have are to exchange driver details and collect evidence. If you have passengers, request them to not say anything to anyone.
• Do not move your vehicle from its resting position after impact. Also advise the other driver to leave their vehicle until details are recorded. If you have them available, cordon the accident scene off with traffic cones.
• If the accident does not involve another driver, such as hitting a parked vehicle, be sure to try and locate the vehicle owner and if unsuccessful, leave your contact details.
• If the driver of the other vehicle flees the scene of the accident or refuses to provide their details, call and notify the police.
• In the case of a major accident requiring assistance to move the vehicles, or where damage has occurred to public property such as traffic lights, call and advise emergency services.
• Although different states do not require police to be notified for minor accidents, it is advantageous to call them and to also file a police report. At the very least it will help speed up your insurance claims process.
• Exchange contact details with the other driver and record the conversation if possible. Having a record of them admitting fault or even just saying sorry is invaluable. Many people may claim a recording will be inadmissible in court without the other party’s permission, but the Listening Devices Act allows you to record a conversation to be used in a legal matter.
• If the other driver co-operates, be sure to get them to write a statement of their version of events. At the very least, try and make an audio recording of what they say after the accident.
• When gathering the other drivers details, request to see a copy of their drivers licence and record the details from there to prevent a false name being given. Take down their name, address, date of birth, driver licence number and expiry date from the licence, and also request their contact phone numbers in addition to the name and address of their employer, insurance company and insurance policy number.
• Take down the other vehicles registration number and registration expiry date, and photograph them if possible. Request to view a copy of the registration papers to make sure they are the owner of the vehicle. If not, ask them what their relationship with the driver is and if they have permission to be driving the vehicle.
• Note down details of the accident location and the time it occurred. The street address is important and noting weather and road conditions can be helpful too.
• Draw a diagram of the accident scene including car locations, the directions both cars were travelling in, skid marks, positions of impact and related vehicle damages. Take photographs of the accident scene and damage sustained to both vehicles where possible.
• Take a physical note of any injuries you and your passengers have sustained, as well as recording the apparent injuries of the other cars occupants. Photographs of injuries are once again handy. If you do not have any passengers with you, request a bystander or witness to take any photographs of yourself.
• Interview any witnesses to the accident, including passenger in both vehicles, either with a pen or recording device. It is even better if you can get them to write a statement of events immediately. Be sure to record their details and contact information.
• While the information is still fresh in your mind, write down your version of events and note down everything you saw, such as seeing the other driver using a mobile phone. By recording the time of the accident accurately, the police can check the other driver’s mobile phone records to confirm your claims. Other common faults to have noticed include failure to indicate or not using lights.
• Be wary of signs of the other driver being under the influence of alcohol or other drugs. Watch out for glazed eyes, loss of balance or co-ordination, and most importantly, the smell of alcohol or drugs. Take notes and report your observations to the police officers attending the crash scene.
• Check the other driver’s car for signs of unroadworthiness, as this may have contributed to the accident. Bald tyres are easily viewed and are especially dangerous in wet conditions. Other faults to keep an eye out for include broken mirrors or lights, provided they are not in the impact zone, cracked windscreens, objects blocking the natural view, and illegally lowered suspensions.
• Once all the necessary details of the traffic accident have been recorded, both you and the other driver may move your vehicle off the road. However, if it is not a minor accident, it is better to wait until the police arrive and give you and the other driver permission to shift the vehicles from the road.
• Call for a tow truck driver at your earliest convenience. If you do not have a preferred tow trucking company or they are unavailable to attend to your accident, make sure you negotiate hard with the first tow truck that arrives at the scene.
• After the accident, it is wise to visit a doctor for a check-up, even if you are not injured. Certain accidents will have post-traumatic symptoms and the doctors are best qualified to advise you of potential injuries and monitor your ongoing health.
• At your earliest convenience, notify the claims department of your insurance company about the accident, unless the accident is minor and you will pay for the damages yourself or come to an agreement with the other driver.

This is an exhaustive list and may take a while to memorise and implement. Some of the points listed may seem petty and unnecessary, but try telling that to someone who wasn’t at fault in an accident, yet failed to follow these procedures and ended up being found liable for the accident.

The world is in a sad state of affairs and the fact is that people have no problems lying to escape liability in a traffic accident. If you are not at fault in a traffic accident, it is always safer to assume that the other person will try to cheat and lie their way out being liable for the damages. So please take all necessary precautions to protect yourself in the event of an accident. Happy motoring and drive safely.

MAKE SURE YOU ARE PREPARED

Having a car accident is something that we all wish we could avoid for the entirety of our lives, but statistically, the majority of us will experience one or even multiple accidents in our lifetime. So apart from praying that we are never involved in a fender bender, we should all learn to be prepared for the event of an accident and know what to steps to take immediately afterwards.

Some of the steps you should take involve safety aspects, while others are primarily for financial reasons. If an accident is not your fault, you need to be particularly wary of the other party trying to absolve themselves of blame. It doesn’t matter whether the person appears trustworthy or admits to being at fault at the scene; situations can change dramatically after they have had time to clear their head.

Maybe the sweet and innocent young girl who ploughs into you will have a dad who is a policeman or lawyer and tries to manipulate the story to place you at blame. Or there could be the case of a guy who realises he will lose demerit points for the accident if at fault and therefore lose his licence and job. If you saw the statistics on people changing their stories after an accident, it would genuinely surprise you, so remember to be wary of the potential for this occurring and take measures to ensure it doesn’t happen to you.

10 TIPS FOR BEFORE AN ACCIDENT OCCURS

• Keep a record of important phone numbers such as police and emergency services either in your mobile phone or written down on paper.
• If your car is insured, keep a copy of your insurance company’s phone number, as well as your policy number. If your policy has restrictions on vehicle repair centres, be sure to carry a copy of the approved list with you as well.
• Locate a reasonably priced tow truck service and carry their contact numbers with you. Otherwise, the first available tow truck that arrives could cost around four times the standard price.
• If you have any serious medical conditions or allergies to medications, ensure you carry a medical information card on you at all times.
• Carry a torch or flashlight in your vehicle. This can prove to be very handy in the event of an accident at night.
• Carry a first aid kit in your vehicle. You never know when it might be necessary or end up saving either yours or another person’s life. Taking a first aid course is also of great benefit.
• Carry some small traffic cones. This is not a necessity, but can prove useful if a crash occurs in a high traffic area.
• Wear a watch or take a mobile phone with you. You may need these items to record the time if an accident occurs.
• Keep a pen and some papers in your vehicle. You will need these to record details and exchange information with the other driver or witnesses. Pens are notorious for the ink running out when you need them, so carry multiple pens or preferably use a multi-pen, such as one that has four colours to select from.
• Carry a camera and recording device in your vehicle. These are critical if you need to record evidence of the crash. Most modern mobile phones come with cameras, video recorders and sound recorders these days, so you may not need to carry those devices in your car. If you are worried about theft of your camera, you can always buy and keep a cheaper disposable camera to take accident scene shots.

Continued at What you should do after a car accident – Part 2