Benefits of buying insurance for your car

It's worth looking into car insurance… some companies will charge you more if your car is stolen or stolen.

Australia's largest auto insurer charges drunk drivers less than customers whose cars have been stolen or stolen by other motorists.

News Corp Australia's investigation into how car coverage is calculated found that Insurance Australia Group, which controls brands such as NRMA, RACV, SGIC and SGIO, is not imposing premium increases on motorists who have recently returned from a suspension. However, a client who used his cover for an event beyond his control could expect an additional 13 percent.

"If your insurance is charging you more than a drunk driver because you were in an accident through no fault of your own, it's time to move on," said Erin Turner, a spokeswoman for consumer group Choice. "Look at the prices and get the best deal."

IAG's archrival Suncorp takes a very different approach, with its AAMI brand adding nearly 50 percent suspension load but increasing fees by less than three percent per theft.

IAG receives about $2.6 billion a year in auto insurance premiums, making it the industry leader. According to investment bank UBS, the company ranks first with 1% of the market, followed by Suncorp with a 33% share. Thirdly, with 31%, Allianz, which does not even cover drivers who have recently returned from a suspension or cancellation.

IAG spokesperson Amanda Wallace said customers whose licenses have been suspended or revoked will face an additional fine of up to $1200 if they request.

On average, drivers with suspended licenses pose a "significantly higher risk than those who don't."

“This means that other drivers who may be included in the policy, including co-owners, are not subject to punishment from other guilty driving individuals or driving history,” she said.

However, the IAG penalizes co-owners for a faulty accident because it increases the overall premium due to the actions of just one driver.

Suncorp spokeswoman Angela Wilkinson said that, on average, drivers with suspended licenses pose a "significantly higher risk than those without."

“If we didn’t charge these customers a higher premium, we would have to pass the cost on to other customers who didn’t have their license suspended,” she said.

Allianz spokesman Nicholas Scofield said that motorists suspended for drunk driving or speeding "are not part of Allianz's risk appetite."

The Australian Automobile Association did not respond to requests for comment.

Are you thinking of taking a closer look at your insurance when it's time to renew? Tell us in the comments below.

CarsGuide does not operate under an Australian financial services license and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) for any of these recommendations. Any advice on this site is general in nature and does not take into account your goals, financial situation or needs. Please read them and the applicable Product Disclosure Statement before making a decision.