What optional extras can you add onto your car insurance policy and are they worth it?
No matter whether you own a big luxury SUV or a zippy little hatch, car insurance is a crucial cost to consider before hitting the road. But as well as the standard cover provided by your comprehensive car insurance policy, there are several optional extras you can take out to provide increased cover for your set of wheels.
What are those optional car insurance extras and are they worth the additional cost? Let’s find out.
What optional extras can I add to my car insurance policy?
The list of optional extras available differs between insurers. The cover options listed below are commonly offered by Australian car insurers and can sometimes be included with your policy for an additional premium, or in some cases may be offered as standard policy features.
Hire car following an accident
If you’re involved in an accident, comprehensive car insurance can cover the cost of repairing or replacing your vehicle. In the event of an accident, it’s possible that your car could be off the road for an extended period of time while it is repaired, and if the repairer needs to order a rare part from overseas, this wait could potentially be even longer.
Many of us wouldn’t be able to survive very long without our car, which means you could face the inconvenience and extra expense of hiring a car while your own vehicle is out of commission.
The accident hire car option is designed to cover such a scenario. If your vehicle suffers extensive damage and can’t be driven safely until the damage is repaired, selecting this option ensures that your car insurer will cover the cost of a hire car while your car is off the road. This extra offers peace of mind and important financial protection.
The hire car will usually need to be a similar make and model to your regular drive. However, keep in mind that while some policies will cover hire car costs for the entire time your car is being repaired, others will only cover hire costs for a fixed period, such as 14 or 20 days. The maximum daily hire cost covered by your policy can also vary, so check the fine print.
Hire car following theft
In a similar fashion to the above option, this benefit covers the cost of a hire car if your vehicle is stolen. This cover feature is commonly included as standard on many policies, but is also offered as an extra-cost option by some insurers.
As above, you’ll be covered for the cost of hiring a similar make and model to your regular car. However, time limits and cost limits may apply, so check the PDS to make sure you’re aware of what is and isn’t included in cover.
Personal effects cover
While comprehensive car insurance covers damage to your vehicle, not all policies cover lost, stolen or damaged personal effects that are in your vehicle. For example, if your car is broken into and the thieves make off with your phone, your loss may not be covered by your insurer.
However, by adding this option to your policy, you can enjoy cover for the personal effects you carry in your car. Just make sure to check any limits or individual item sub-limits that may apply.
Chipped and cracked windscreens are a common and annoying problem. Although they can be quickly and easily repaired, the important safety qualities of windscreen glass means the job can only be done by specialist auto glass repairers – and this means windscreen repairs can be quite expensive.
If you select windscreen cover, your insurer will pay to have chipped, cracked and broken windscreens repaired or replaced. While you may sometimes be required to pay an excess for such claims, other insurers will offer to reduce or even waive their excess for all windscreen claims. In other cases, your first windscreen claim in any policy period may be excess-free, but any subsequent claims will come with the normal policy excess attached.
Finally, it’s also worth checking whether making a windscreen claim will affect your no-claims discount – it will affect your discount with some insurers but may not have any impact with others.
Engine troubles, mechanical and electrical failures, flat tyres and even running out of fuel are frustrating incidents that every driver hopes to avoid. Not only can they be extremely inconvenient and leave you stranded in the middle of nowhere (or even in the middle of a busy intersection), but they can also leave you facing expensive bills for repairs and towing costs.
And under normal circumstances, your standard comprehensive car insurance policy won’t cover the cost of either:
- Any structural, mechanical, electrical or electronic failure or breakdown
- Incidents that occur due to general wear and tear
However, an increasing number of insurers allow you to purchase optional roadside assistance cover for an extra premium. This ensures that you’ll be covered for expenses and services such as:
- Towing your car to a repairer
- Replacing or jump-starting a flat battery
- Performing minor repairs related to the breakdown of your vehicle
- Changing a flat tyre
- Delivering emergency fuel if you have run out
- Replacing lost keys or helping you access keys locked in the car (spare key delivery or attendance at the scene by a locksmith)
The exact roadside assistance services covered varies between insurers, so check the PDS for full details.
Do you always lose your car keys? Or are you worried about the cost of replacing your keys if they’re stolen by thieves?
If so, many insurers can provide cover for the replacement of your keys and remote locking devices if they are lost or stolen. Re-coding costs are often also covered. This feature is included as standard on some policies, but only available as an extra-cost option on others.
Just make sure to check the limit that applies to this benefit. Some policies will restrict cover to $300, while others may provide up to $1,000 protection or more.
Adjust your excess
The excess is the amount you agree to contribute towards the cost of a claim. The standard or basic excess that applies generally ranges from $200 up to around $700, but many insurers allow you to adjust your car insurance excess to suit your needs.
This option allows you to tailor a policy to suit your needs by:
- Choosing a higher excess. This will lower your car insurance premium, but will mean you’ll have greater out-of-pocket costs if you ever need to make a claim.
- Choosing a lower excess. This will mean you have to pay a higher premium to purchase cover, but your out-of-pocket costs will be reduced when you claim.
Of course, you can also choose to accept the standard excess quoted by your insurer if you decide it’s the right fit for you.
Ready to compare car insurance?
Optional extras to help you reduce your premium
Your insurer may also provide a number of other policy options that can help reduce your car insurance premium. Just like choosing a higher excess, the following options can help you save on the cost of cover:
If you’re looking for an easy way to save money on the cost of car insurance, you might want to look for an insurer that allows you to restrict cover under your policy to drivers above a specific age. In most cases, you have the option to restrict cover to drivers over the age of 25, but some providers may allow you to restrict cover to people over 30 or even 40 years of age.
Why does this lower your premium? Young drivers are inexperienced and can sometimes be irresponsible, and statistics show that younger drivers are much more likely to be involved in an accident (and therefore more likely to make a car insurance claim) than their older counterparts. So by only purchasing cover for people above the age of 25, you can enjoy significant savings.
Of course, you’ll need to be sure that no-one under this age limit will be driving your car during the period of insurance. If an incident occurs with a young driver behind the wheel, any resulting claims will be refused.
Another option that can help you reduce your car insurance premium is to only pay for the number of kilometres you plan to drive. Commonly known as ‘pay as you drive’ car insurance, this type of policy is well worth considering for anyone who doesn’t drive their car all that frequently or over long distances.
Restricted-kilometre car insurance allows you to only pay for car insurance to cover the distance you travel, which means you can tailor a policy to suit your needs. The less you drive, the cheaper your cover will be.
You can ‘top up’ your level of kilometres if you look like reaching your limit before the policy period ends. However, if you need to make a claim and you have covered more kilometres than you specified when you purchased a policy, you’ll usually need to pay an additional excess.
No-claims discount protection
A no-claims discount or no-claims bonus is a common feature of comprehensive car insurance policies. How it works is simple: for every year you are claim-free on your policy, you receive an additional discount. In other words, the longer you go without making a car insurance claim, the cheaper your cover will be.
However, if you ever need to make a claim, your years of hard work to be a safe driver will all fall by the wayside as will you lose your no-claims discount.
Although rather than going back to square one, some insurers offer optional no-claims discount protection. If you buy this extra cover, you can make a car insurance claim without affecting the discount you’re eligible to receive.
How much do car insurance extras cost?
The cost of car insurance optional extras depends on the option you select, the insurer you choose and the standard cost of cover. Some options, such as restricting drivers or choosing a higher excess, can actually reduce your premium. Others, like adding roadside assistance or personal effects cover, will see the cost of cover increase.
The best way to calculate the effect these extras will have on your wallet is to get a quote. See how much your car insurance premium varies with and without those options included, and use that information to decide whether they offer value for money.
Are car insurance extras worth it?
The answer to this question really depends on your personal preferences. If you want complete peace of mind and a higher level of protection than a standard policy can offer, then explore the idea of adding extra-cost options to your policy. And if you want to save money by restricting drivers or kilometres, or choosing one of the other cost-cutting options, they’re certainly worth considering if they suit your needs.
However, if you’re looking for cheap car insurance that only covers the essentials, extra-cost options most likely won’t be the best choice for you. While there are many factors that contribute to the total cost of car insurance, tacking additional cover onto standard cover is an easy way to drive premiums up. It’s also worth remembering that some options, such as roadside assistance and cover to fix chipped or cracked windscreens, may be available cheaper elsewhere.
Whatever you decide, remember to compare car insurance quotes across a range of providers and to read the PDS closely to make sure you know exactly what’s included in cover.