Owning and maintaining a car can be one of the biggest contributors to the household bill, but according to new research from Compare the Market, 17.4% of drivers surveyed have ditched comprehensive car insurance in the last 12 months.
According to the research, Aussie drivers aren’t protecting their cars with comprehensive policies due to higher costs, affordability, and not thinking their car is worth it, but experts warn that this might cost them more later on by ditching, rather than switching.
Compare the Market economic director David Koch said people should look for ways to cut their premiums down as opposed to completely giving up on their comprehensive car insurance.
“If people are looking to save a few bucks by giving up their comprehensive car insurance, they are compensating short-term gain for long-term pain,” he said.
“Obviously no one wakes up and thinks about wanting to be in a car crash, but sometimes the improbable does happen. If you were found to be at fault without insurance, you could be hundreds, thousands or even tens of thousands of dollars out of pocket in repair or replacement costs.
“If rising costs are the concern, there are a few ways people may be able to reduce their premium, including increasing their excess, paying premiums annually and even re-evaluating how many kilometres they drive on the car and opting for a pay-as-you-drive policy.”
The data also showed that younger generations were opting out of comprehensive insurance at higher rates than older generations.
Almost one in three Gen Zers and one in five Millennials have opted out of comprehensive insurance in the past 12 months.
The prevalence of cutting comprehensive car insurance could also be leaving drivers unprotected against car break-ins and personal property theft, as the research also found that as many as 52.5% of people do not park their cars in a locked garage at night.
Compare the Market executive general manager for general insurance and car insurance expert Adrian Taylor said people were playing Russian Roulette with their savings, given recent Compare the Market research found that as many as one in ten drivers had their car broken into.
“While people are understandably feeling the cost-of-living crunch, opting to forgo comprehensive car insurance as a way to save money is like playing Russian Roulette,” she said.
