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.
| Have you opted out of paying for comprehensive car insurance in the past 12 months? | % of drivers |
| Yes, I opted out as I could no longer afford to pay it/it was getting too expensive to justify | 8.5% |
| Yes, I opted out as I do not see the value in comprehensive car insurance | 5.5% |
| Yes, I don’t think my car is worth enough | 3.4% |
| Total who have opted out of comprehensive car insurance by the end of 2023 | 17.4% |
| No, I still have comprehensive car insurance | 70.4% |
| I have maintained my third-party insurance in the past 12 months | 12.2% |
Speaking on the importance of having car insurance, Compare the Market’s economic director, David Koch, said that 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,” Mr Koch 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.
| Have you opted out of paying for comprehensive car insurance in the past 12 months? | % of Gen Z drivers | % of Millennial drivers | % of Gen x drivers | % of Baby Boomer drivers |
| Yes, I opted out as I could no longer afford to pay it/it was getting too expensive to justify | 11.5% | 12.3% | 8.5% | 4.4% |
| Yes, I opted out as I do not see the value in comprehensive car insurance | 14.1% | 6.5% | 3.4% | 1.2% |
| Yes, I don’t think my car is worth enough | 5.3% | 3.1% | 4.7% | 2.2% |
| Total who have opted out of comprehensive car insurance by the end of 2023 | 30.9% | 21.9% | 16.6% | 7.8% |
| No, I still have comprehensive car insurance | 49.6% | 65.0% | 74.1% | 79.7% |
| I have maintained my third-party insurance in the past 12 months | 16.8% | 12.3% | 8.9% | 12.5% |
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.
| Where people park their cars | % of all drivers | % of Gen Z drivers | % of Millennial drivers | % of Gen X drivers | % of Baby Boomer drivers |
| Locked garage | 47.5% | 34.5% | 43.8% | 46.2% | 55.9% |
| Open carport | 22.8% | 20.4% | 24.2% | 21.2% | 23.4% |
| On the street | 7.7% | 16.8% | 11.9% | 5.7% | 2.5% |
| On the driveway | 20.3% | 27.4% | 20.0% | 25.0% | 15.0% |
| Other | 1.7% | 0.9% | 0.0% | 1.9% | 3.1% |
Compare the Market’s Executive General Manager for General Insurance and car insurance expert, Adrian Taylor said, that people are playing Russian Roulette with their savings, given that 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,” Mr Taylor said. “Comprehensive car insurance not only protects you financially if you were to find yourself in an accident on the road, but may also cover towing costs, theft of personal items, as well as any damage caused by fire, hail, storms, floods and other weather-related damages.
“Previously, we’ve seen as many as one in ten drivers say that their car has been broken into, so it’s worrying to see so many people relying on a prayer and hail Mary to spare their savings if their car were to either get broken into, much more if they were in an accident, and were found to be at fault.
“Given that less than half of the people we’ve asked are parking inside a locked garage, there are a number of weather factors that could leave people with extensive damage to their car that could be costly to fix.
“If people are looking to reduce their car premiums, the best place to start is to compare their options. There may be policies with other insurers that may offer the same level of cover at a lower price.”
* Compare the Market surveyed 1,005 Australian adults aged 18 and over in January 2024.
-ENDS-
For interviews and more information, please contact:
Noémi Hadnagy | m: 0433 377 252 | e: [email protected]
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