Choosing the right comprehensive car insurance

So the decision starts to me made about what insurance to take. Usually this decision is made solely on the cost of the cover provided. Many times I have heard people say about insurance quotes, “Gee that is expensive”. My answer to most people when I hear that is, “Compared to what?” The reason I ask this is to get them thinking about what it is they are comparing to. Most time the only information that people are comparing is the cost of the policies, under the misguided assumption that all policies are the same. This is where most people get it wrong.If every insurance company offered the same benefit in there policies, then you would assume that the pricing should be the same right across the board. But they don’t. A number of factors come into how insurance policies are priced.Now of course your own driving and insurance history will effect what you are offered for insurance, but most people understand that. But there are many other factors that insurance companies will consider too. Some of these are:1. Competition. Insurance companies will price the policies to try and win market share. So what may have been a good price when you first started it, may not be the case 2 or 3 years later. So when you receive your renewal notice, it is always a time to look around at what else is on offer. 2.  Demographics. Insurance companies may target certain markets. Whether it is an age group market or a physical location, they will price their policies to suit what they want. For example, Australian Pensioner Insurance target the over 55’s market, and so price their policies to be attractive to them. Other may prefer to target main cities, and so may charge more to people that live in country areas. 4. Claims History. This also comes into how insurance companies price policies. If you live in an area that they have had to pay out a lot of claims for car theft, then they will charge you a higher premium, as their statistics show they will be more likely to have to pay out on your policy. Other publicly available statistics may also effect how they price their policies. Crime statistics and accident reports would also be taken into consideration. If the police release information that a lot of cars are being stolen in a particular area, the insurance company may factor that in, even if they haven’t yet had to pay out on claims in that area.Then there is what the policy actually covers you for. This can vary greatly between insurance providers. For example, will they use original parts of aftermarket parts when repairing your car?  Some insurers actually allow secondhand parts to be fitted to your car in the car of in needing repair if your car is over a certain age. Other things to consider are:1.    Will you get a hire car after a theft AND an accident? 2.    How long do they supply you with a higher car?3.    What is the daily limit that they allow?4.    Do they cover items damaged in your car?5.    Do they cover trailers/caravans being towed by you?6.    Will they cover travel expenses if you’re away from home when you make a claim.These are just a few of the things that can vary between insurers. The list can go on. It is important that you make sure you have the right level of cover to suit your needs. But sometimes taking the cheapest insurance may now give you the level of cover that you need to protect yourself. It would be very annoying to find that your insurer only allows enough money for you to hire a small hatchback car when you need a 7 seat car to get all your family around. So the next time your shopping for insurance and you hear yourself saying “That sounds expensive!” ask yourself, “Compared to what?” Make sure you find out all the details of the policies before you make a decision. In Australia, all insurers need to make available to you a Product Disclosure Statement that outlines what their policy covers. Read this before taking out a policy.If you find you have taken out a policy that doesn’t suit you, generally they have a cooling off period that allows you to cancel and insurance and get back any money you have paid to them if you haven’t made a claim.