CAR INSURANCE DONE RIGHT
Our UNIQUE Secret to CONSISTENT Savings
How we apply science to engineer affordable insurance
We love comparing car insurance prices to achieve superior results for drivers
WHAT IT TAKES TO BEAT ANY PRICE
1. Smart Price Research
Compare the whole market
We are different to most insurance brokers because we do not limit ourselves to selling policies for a particular underwriter. Instead, we buy policies for customers from all underwriters. As a result, compared to a traditional insurance broker, we have more products, tools and options for being able to issue a winning quote. We agree. It’s unfair.
Price targets
Traditionally, insurance quotes are a pain because there are no price targets. You might spend time answering a lot of questions only to receive a quote which does not meet your expectations. For the broker, they would have wasted effort in compiling documentation which leads to no-where. Our difference is that we view every quotation as a competitive exercise in being able to either match or exceed your expectations. When you obtain a quote from us, success is assured if we are provided with a reference point so we can do our magic. Whilst we do provide quotations without customers setting us a price target, our service works best if you set us a pricing challenge by supplying us your renewal notice, or a comparative quotation you’ve obtained elsewhere.
Price Behavior Modeling
Proprietary insurer rankings
Australian car insurance market is fascinating because it exhibits multiple econometric problems;
- Private use motor insurance prices have unusually wide spreads. For largely identical coverage, price differences between cheapest and most expensive insurers are enormous. It’s not supposed to be this way, but it is.
- The other problem is inverse price curve behavior, whereby the most expensive insurers in the country, also happen to be the most popular ones with the largest market share. It’s not supposed to be this way, but it is.
- As a result, most drivers are insured with popular brands and are overpaying for car insurance by a large margin.
- To achieve lower prices, our main strategy is to switch drivers from an expensive insurer into a cheaper insurer (all else being equal). Not many people know which insurers are expensive and which are cheap, but we do.
- Whilst we cannot rank insurers publicly (at least for now), below we provide data on price differences between most popular car insurance brands in Australia, based on a large sample of data.
Private Motor Australia: Price Spreads
Explanation
Below, we show average private motor prices from 24 Australian car insurance brands.
The names of the insurers are not published. They are all household names. Instead, we identify the brands as A1, A2, A3 etc.
You may select vehicle make and model to review difference in average price for your chosen type of vehicle between different insurers.
Whilst our data drills down into year of manufacture, age of driver, geographic location and many other factors, but for brevity sake, we exclude these selectors in below example.
You will notice the degree of difference between the most expensive and cheapest insurer, with cheapest being at top of chart, and most expensive at the bottom. Statistically, you are overwhelmingly more likely to currently be insured with one of the brands at the bottom of the chart.
2. Insurance Excess Engineering
Through accident management infrastructure
In most situations, we are able to achieve a customer’s car insurance price target by simply switching them from an expensive insurer into a cheaper insurer (all else being equal).
However, if you are already buying cheap insurance, we are still able to achieve a lower price by engaging our accident management partners. Quite literally, we are able to obtain insurance cheaper than if you went directly to the insurer yourself.
It’s magic (sort of).
Same excess, at lower premium
An insurance excess is your contribution towards the cost of a claim. It is not a fee, or a charge.
An insurance excess has inverse relationship with premium: as excess increases, premium decreases. This fact is uncontroversial.
Consider the pricing table below for a random 2018 model Honda, with data taken from a mainstream insurer.
You can try the same analysis with your current policy.
| Excess | Premium | Saving |
|---|---|---|
| $700.00 | $1,972.22 | 0% |
| $800.00 | $1,842.19 | 7% |
| $900.00 | $1,747.75 | 11% |
| $1,100.00 | $1,593.45 | 19% |
| $1,300.00 | $1,478.19 | 25% |
| $1,600.00 | $1,382.94 | 30% |
Explanation
At a low excess of $700, the policy costs $1,972.22.
As excess increases to $1,600 cost of policy drops 30% to $1,382.94
Above price behaviour is more or less consistent across all insurance brands.
As excess increases, premium decreases.
The degree by which premium decreases may vary, but the overall direction of change in premium is similar.
We are able to achieve lower insurance prices on the basis of the inverse relationship between excess and premium.
Example of excess engineering to reduce policy cost by 30%.
The payment of excess arises at time of claim.
For a vehicle which has been damaged, but is capable of being fixed, a market of smash repairers is available who will undertake to repair the vehicle, and pay the customer’s excess.
The market exists as a result of the repairer’s willingness to make some money on repairing your car, but making less of a profit as a result of being liable for payment of your excess. For example;
- You approach us with a renewal price of $1,972.22 at a standard excess of $700.
- We review and find that no cheaper product is available.
- We buy the same product at a $1,600 excess as opposed to $700.
- Your premium drops by 30%.
- Condition is imposed by us that in the event of a claim, you have to go through a repairer who will accept to cover the $900 difference between your excess of $700 and your policy excess of $1,600.
You save 30% on the cost of your insurance.
It’s magic, but not really. To achieve this kind of result requires operation of accident management infrastructure, which is not everyone’s cup of tea.
3. Premium Subsidy
Beat any price, always
Vast majority of Australians buy policies from expensive insurers as opposed to cheaper insurers. In most situations, price reduction is achievable by switching products.
In circumstances whereby a cheaper product is not available, price improvement can be achieved through excess engineering.
As a last resort, in order to achieve a particularly stubborn pricing target, it’s possible to reduce the customer’s cost of insurance by someone else paying for the customer’s policy in whole, or in part.
Example of price subsidy
You may already be buying cheaper insurance (hopefully, with our help!), and there is no further excess engineering which can be done in your scenario to reduce your premium.
At this point, you will be on a very good insurance deal. However, a situation may arise that based on a particular claim history or other event, our office or our accident management partners may choose to either discount a part of your premium, or simply pay for the cost of your insurance in order to reduce your price further, or to zero.
Whilst we consider these situations on a case by case basis, rest assured, that if you are not paying zero for insurance, we can definitely beat your price, at our discretion.
