The author received a shock when he opened an email from NRMA Insurance revealing a 17% increase in the premium for insuring his 2019 Kia Picanto, bringing the total to $3440. Faced with the expensive cost of car insurance, especially for a 21-year-old male driver, he considered alternatives such as selling the car and using an e-bike for transportation to save on costs. Despite being a loyal customer for 22 years, he decided to shop around for better deals after feeling enraged by the increase.
Upon researching on comparison websites, the author encountered the first hurdle as major car insurance companies like IAG, Suncorp, QBE, and Allianz did not participate in the comparison platforms. These companies, which control a significant portion of the market, prefer not to be included in these comparison websites in order to retain customers and increase profits. Insurance premiums for home and car insurance have been increasing at an average rate of 16%, the fastest in 22 years, while corporate profits of major insurance companies like IAG are on the rise.
Consumer advocate, Joel Gibson, highlighted the practice of “price walking” where insurance companies charge older, loyal customers more each year without a significant change in coverage, resulting in them paying up to 34% more than new customers. This practice, common in the insurance industry, has been banned in the UK in 2022. Despite shopping around and finding a cheaper quote from a competitor for $1583, NRMA declined to match the offer, instead offering a $100 Woolworths gift card as a token of “loyalty” after 22 years of business. Disappointed by the lack of value placed on loyalty, the author contemplated other options.
With the rising cost of car insurance premiums and the lack of competitive pricing among major insurance companies, the author faced difficulty in finding a better deal for his car insurance. Despite efforts to shop around and negotiate with NRMA for a lower premium, he was met with resistance and minimal incentives for loyalty. The author’s experience sheds light on the challenges faced by consumers in navigating the complex and tightly held insurance market, where options for finding affordable coverage are limited.
In conclusion, the author’s frustration with the high cost of car insurance, lack of transparency in pricing, and minimal rewards for loyalty reflects broader issues within the insurance industry. As premiums continue to rise at a rapid pace, consumers are increasingly seeking alternative ways to save on costs and find affordable coverage. The need for greater competition, regulatory oversight, and consumer protection measures is evident in order to address these challenges and create a more fair and accessible insurance market for all consumers.
