The author experienced a shock when they received a car insurance premium quote from NRMA Insurance that had increased by 17 per cent to $3440 for their 2019 Kia Picanto. As a long-time customer of 22 years, the increase was unexpected and led them to start shopping around for a better deal. However, the author found that comparison websites for car insurance did not include major brands such as NRMA, making it difficult to access a wide range of quotes in one place.
The car insurance market is dominated by a few major companies, including IAG, Suncorp, QBE, and Allianz, who collectively control a large portion of the market. This monopoly-like control allows these companies to set premiums at high rates without fear of losing customers, as many people do not have the time or inclination to shop around extensively for a better deal. As a result, home and car insurance premiums have been rising at an average of 16 per cent, the fastest rate of increase in 22 years.
Consumer advocate Joel Gibson, author of “Kill Bills”, highlighted the issue of “price walking” in the insurance industry, where loyal customers are charged more each year without major changes to their cover, resulting in them paying significantly more than new customers. This practice has been banned in the UK, but continues in Australia, leading to frustration for many long-time customers who feel they are being taken advantage of. In response to the high premium quoted by NRMA, the author sought out quotes from other insurance companies and found a significantly lower offer of $1583 from a competitor.
Despite presenting the competitor’s quote to NRMA and asking them to match it, the sales consultant refused to lower the premium but offered a $100 Woolworths gift card as a gesture of “loyalty”. Frustrated by this response and feeling undervalued as a long-term customer, the author contemplated switching insurance providers in search of a better deal. Ultimately, the experience highlighted the challenges faced by consumers in navigating the complex and often opaque world of car insurance premiums, and the need for greater transparency and competition in the market to ensure fair pricing for all customers.
