AUTOMOBILE insurance companies claim their services are “fantastic” and “generous” and say they offer “the best rates available” in the market, but what they’re really offering is “the most expensive” coverage available.
Key points: Automobile insurers are claiming they offer the best rates and “the least expensive” insurance available in the industry.
They say consumers should “pay attention” to what they pay for.
Consumer advocates have slammed them.
Insurance is one of the big topics of conversation at this year’s Consumer Affairs Week conference, and consumers are keen to know how insurance is actually working for them.
In fact, the Consumer Affairs Group, the industry’s main trade body, released a survey on Thursday highlighting the issues faced by consumers, including “the need for more information and information sharing about insurance”.
The survey, commissioned by the organisation, found that nearly two-thirds of consumers surveyed were concerned about the “price, coverage and value” of their auto insurance.
“We want consumers to pay attention to what is being offered,” said Caroline Deakin, Consumer Affairs Bureau chief executive.
“When they buy their auto, they should pay attention because there are often significant discounts, offers, or a lower price than advertised.”
Consumer advocates and insurance experts have raised concerns about some of the claims insurers are making, saying they are often misleading or misleading consumers.
One example is a claim that claims car insurance premiums will drop when a vehicle “dies in a crash”.
“That claim has never been proven,” said Sarah Stott, an insurance expert with the Insurance Institute of Australia (IIA).
“It’s a really important one.”
The ICA’s survey also found that almost three-quarters of Australians were not aware of the “premiums” they were paying on their car insurance.
One in three Australians polled said they were not familiar with the difference between the standard and premium for their policy.
In addition, nearly two in three respondents said they did not know how much of a premium they would be paying on the cheapest policy.
The Insurance Council of Australia, the Australia’s largest consumer group, released its own survey on the issue in September, finding that over half of people surveyed were not “aware of the difference” between the premium and standard rate on a policy.
“Some insurers may claim that premiums will be lowered if a car crashes, but they are not always clear about this, or how the difference will be calculated,” said the ICA.
“People are sometimes asked if they know what their car premium is, but often not,” said Ms Stott.
“If you’re unsure of your car’s price, you should look into what your car premium may be.
If you’re in a bad car, you’re not paying enough for your premium, so you should consider this.”
Some insurers also claim that they will reduce premiums by up to 10 per cent, but this may not happen if the car was driven for more than five years.
Ms Stot said consumers should be “extremely cautious” when signing up for an auto policy.
She said consumers need to check if a company’s claim was accurate and, if they have questions, call their insurer.
Consumer advocate Simon Treadway says consumers should take note of the companies claims about how much they are paying for insurance.
Photo: Supplied “There are a lot of companies that are claiming that if you have been driving for five years you are paying as much as you would have been paying five years ago,” he said.
“It doesn’t work that way.
You are paying the same for a different type of vehicle, and you have the right to negotiate that and get what you want.”
“I think that’s a big red flag.
You should definitely take a look at what you are getting paid for, and if there are any red flags that you might be concerned about, then call them.”
Consumer advocate Ms Stamp says consumers need “a little bit more information” about how their car premiums are calculated.
“One thing that we would really like to see is the company actually explain to consumers how they are going to calculate the premium, and that would really help consumers understand that premium is actually being paid for their use of their vehicle,” she said.
Consumers should also check that their car’s insurance is “not being used to pay for a bad or no insurance”, Ms Stow said. AAP