Four ways to save on your insurance

Friday, 14 February 2025

After astronomical rises in 2023, the pace of insurance premium increases is slowing.

Data from insurance comparison service Quashed shows the average cost of car insurance rose by $304 to $1421 during 2023, an increase of 32%.

Premiums rose again last year, but by a much more subdued 6.7% to an average of $1325.

Homeowners have also been feeling the pinch of rising premiums. The average cost of home insurance rose by 28% to $2648 in 2023 and by another 2% last year.

So, what can you do to make your insurance more affordable, while still keeping your belongings covered?

Shop around for your insurance

This is pretty standard advice and it’s easy to brush off if you think insurance costs are much of a muchness.

But that’s not the case.

Using the ubiquitous Toyota Corolla as an example (although these tips can also be applied to house and contents cover), quotes from Quashed show five insurers pitching very different premiums to cover a 2020 model in Auckland.

While the cheapest comprehensive cover was quoted at $960, the most expensive came in at $1790 ‒ an $830 difference.

Adjust your sum insured and excess

Sticking with our trusty Corolla, reducing the sum insured to better reflect the car’s actual current value and increasing excess will both lower premiums.

Adjusting the sum insured from $24,000 to $22,000 and the excess from $500 to $1500 reduces quoted premiums to $673 and $1258 – a 30% saving.

Switch to a lower tier cover

If you are thinking about cancelling your policy due to the cost, you might want to consider switching to a lower tier cover as it can significantly reduce costs while keeping some level of insurance cover in place.

Switching from comprehensive to third party, fire and theft insurance reduces premiums on average by 40% to 60%. A third party, fire and theft policy would cost $580 to $690 for the Corolla.

Don’t wait until your policy is up for renewal

You don’t have to wait until your policy renewal comes up to switch. If you have paid for the year upfront, insurers will refund you for the unused portion after cancellation.