Cutting Insurance costs

Letter to SMH today
Main threat to our budget is galloping insurance premiums. House&Contents, Car, Green Slip, two income protection insurance policies, two life/trauma policies, Health. IPI has been increasing at well over 10% per year for years - my premium has gone from $600 to over $1000 since 2013 - while my income has changed very little and I have not had a big birthday. That is not sustainable but they can and do get away with it. We were accurately insured for replacement value house & contents but they went galloping too. I deliberately reduced the value of the insurance two years ago just in case arson actually become tempting in a few years (! - but I am far too law abiding) but the premium does not seem to come down at the same rate that it goes up. Short of surfing companies you have to take the gouging (but it is borderline when you are tied up with loyalty bonuses), but examining the small print is time consuming and why is it unreasonable to expect a good product stays a good product? Insurance is basically a second mortgage. There should be no-claim bonuses on house & contents and IPI. With health insurance I ironically cannot afford to use it as money to pay the mega-gap is excessive; if I suspended the membership, I'd have more than enough money to attend to medical checks - and I am afraid to move IPI and life/trauma in case something is lurking I don't know about so I won't move till after I've had a barrage of tests to prove I am healthy so there's no basis for a new insurer to deny a claim. A year's suspension of private health insurance would pay most of a child's braces …

I need to get serious with saving money on these insurances. Don't have health insurance. This party only on 10k car. 2 other small vehicles also 3rd party only. Roadside assist for all 3 cars. House and contents 'set and forget' with CGU
Has anyone got any tips to share or companies they would recommend?

Comments

  • +2

    Go and see a broker?

  • +2

    Never renew without going to market.

  • +3

    check if your super already covers income and life, I thought most do.

  • +3

    Insure for catastrophe, not in the hope of making a claim. (Health insurance?)
    Manage smaller risks via a rainy day fund.
    Insure for an amount that will save your bacon, not make you a lottery winner.
    I am regularly upset hearing acquaintances get financial advice that includes insurance to support the female partner for life and setup kids with private schooling, Uni etc. if the father dies. Don't make an untimely death a lotto win!

  • TL DR?

  • +2

    General insurances - fish for a brokers with multiple licences. package deals may help with discounts. Consider additional linked benefits, eg. RACV got a few.
    Private Health insurance -as above. if pregnancy is not required, many good lower cost options such as Australian Unity, AHM and Frank can help. Need to compare. Receive the referral discount. Look online for codes, etc. Partially aligned phone broker is iSelect, free service. Research their website for affiliations before calling them. Get a discount if your preference is there. Don't feel obliged after their comparison service is complete but not suitable.
    Ambulance cover - check health insurance coverage or obtain separately. NSW and QLD, for example, may be free. Or for VIC, a standard price is payable, can't negotiate that.

    For below covers, a Personal Needs Analysis is recommended to sort out the tiny bits and costs. Most websites have the tool, can google it. Obtain maybe just the levels required and within budget. Be careful who you approach for these. For example, NAB 'will' only sell MLC, ANZ only OnePath, WestPac only BT, Commbank only CommInsure, etc.
    Find a non-aligned ( not affiliated to any single one, and more independent) broker, such as 'Shadforth' who sorted mine at no additional cost. Advisors get their commissions anyways, nothing extra to pay for the full fledged insurance start-to-end service (you may not necessarily reduce premium costs by doing it yourself anyways!)
    Check for 'daily' features, like AIA for their 'Vitality' option if you are generally the 'fit' or healthy type, for discounts, vouchers, health program, etc. I could refer you to my advisor, if you wish PM me.

    Life/Death - obtain through super (15% deduction available)
    TPD - Obtain 'own' definition with super-linked policy, so you use your super and if you have some available cash flow. Super-only 'Any' definition TPD, may not be totally worth it.
    Trauma - expensive but can be good to have. Obtain 'Plus' cover if if little lower cover. Have to pay for this from personal cash flow.
    IP - Obtain 'Plus' policy if within budget. If your overall tax payable is >15% of your income, pay the whole premium via cash flow, to get favorable tax deduction against personal Marginal Tax Rate (+ML +BR if applicable), provided you have surplus cash flow to spend. If you can', try the Super-linked policy to pay some via super, and extra (plus) features via cash flow. Else, pay solely via super (you still get 15% tax deduction).
    Accident cover - applies mainly to people in selective industries and cash flow to spare.
    Travel insurance - Fish. Or check/switch your Credit Card.

    Whew! hope it helps.

    • +1

      Fantastic! Thank you abh gup for taking the time to help me!

    • "Ambulance cover - check health insurance coverage or obtain separately. NSW and QLD, for example, may be free."

      You mean free with health insurance for QLD ?

      • I meant it is likely that the QLD govt covers it. Previously, they recouped ambulance costs by adding a few cents to everyone's electricity/gas bills. Don't know if they still add it or waive it now. Good job by the QLD govt.

        https://www.qld.gov.au/emergency/emergencies-services/inters…
        Permanent Queensland residents are automatically covered for emergency pre-hospital ambulance treatment and transport Australia-wide.
        If you are a permanent Queensland resident and receive an invoice for ambulance treatment/transport provided to you or your child/dependant by another state or territory ambulance service, you are requested to forward the invoice to the Queensland Ambulance Service (QAS) for payment.
        You will also need to provide proof of Queensland residency.

Login or Join to leave a comment