Why you should check your car insurance amount covered at renewal time

When it comes to car insurance, something we always forget about is what to do at renewal time. Most of the time, it’s as simple as the click of a button to confirm you’re happy with your current premium and you’re wanting to continue your policy as is. However, it is really important to dig a little deeper and check you details on your policy at renewal. Specifically, among others, to check your amount covered when renewing.

What is car insurance amount covered?

Amount covered refers to the amount that your vehicle is currently insured for. This means that if you were to make a claim, the amount covered amount is the maximum that an insurer will pay for your vehicle. This includes if it is a total loss, or for the cost to repair the vehicle is more than the amount covered. So, why is this important to check?

Reasons why you should check your car insurance amount covered

Less use

Your amount covered can be changed or altered based on how much you drive. This is because the condition of your vehicle will change as it ages and you put more kilometres on the clock. If you’ve noticed that you’re driving significantly less over the past year, it’s probably a good idea to check how this impacts your amount covered. 

Market vs. Agreed Value

In line with using your car less, another thing you should check is whether you chose Market or Agreed value when you initially took out your policy. If you chose Agreed value cover, this could be drastically different from what your car is worth now. This is especially important as we head into an interesting period for car values in Australia this year.

Learn more about Comprehensive Car Insurance

What does this mean for me?

It’s important for you to make sure you are comfortable with the price that your vehicle is insured for. In the event that something were to happen to your car, whereby your vehicle was seriously damaged or written off, we know that it’s important to you that you’re able to replace your vehicle. Whether you’re aiming for a like-for-like situation, or you’re aiming to upgrade if the worst happened, research shows that prices for most used cars have risen in 2021 and it’s expected that these will remain above market levels in previous years while new car shortages continue for the near term.’²

The last thing you’d need on your plate after having lost your means for transport, is that you’re not able to purchase another car. So, whilst many used car values may rise and remain firm, we recommend that when your renewal comes through, you consult with your Insurer to check, and if necessary, adjust the amount covered of your vehicle,’³ even if it means your premium could be a little higher.

Find out more about your car insurance amount covered

Read more:

• What should I check when renewing my car insurance?
• What is the future of electric cars in Australia?
  
• How to do a car insurance health check

^{1 Glass's Information Services, 2021
2 Glass's Information Services, 2021
3 Glass's Information Services, 2021}

AAI Limited Trading as GIO. Insured issued by AAI Limited ABN 48 005 297 807 trading as GIO. Registered office, Level 23, 80 Ann Street, Brisbane QLD 4000. Any advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it. Please read the relevant Product Disclosure Statement before you make any decision regarding this product. The Target Market Determination is also available.  Information outlines current environment factors as at December 2021, and may not be indicative of future market influences.