It can be hard to tell if insurance will be useful or not just by advertisements and sales talk.
It helps to do some research and look around at different options. You can get as many price quotes as you like to help compare your options.
Not all insurance works the same. Find out more about how life insurance and health insurance work.
Step 1: Decide if you need insurance
To decide if you need insurance, start by looking at if it’s going to be worth it or not. If the item is old, not worth very much, not often used, or easily replaced, you may not need it.
For a list of important questions to ask yourself, see how insurance works.
Step 2: Get quotes and compare the cost and coverage
To choose the right insurance policy, you can get free quotes from lots of different insurers to get the best value for money. This will usually involve the insurer asking a range of questions about you, your circumstances, the things you want help to protect, and the kinds of ‘events’ you would like to be covered for.
You don’t have to take the insurance if you get a quote – you can get as many quotes as you like to compare your options.
If you are renewing your insurance, it’s a good time to get some quotes and see if you are getting the best value for money. You can get new quotes from other insurers, or ask your current insurer whether they can offer a better price.
Comparison websites can be useful as a starting point, but be wary as most of them won’t show you all the options.
People who live in areas that are at risk of natural disasters and extreme weather will likely have more expensive premiums than if they lived somewhere else. This may also mean living a long way from services that may be needed if they made a claim.
You might have to get many more quotes to find an insurer that will offer you affordable premiums. In some cases, people won’t be able to afford or won’t be able to be offered insurance.
To compare insurance policies, look at:
- Cost – how much the policy costs (the premium) for the same type of cover from different insurers
- Coverage – what is included in your insurance, including who or what is covered and in what situations
- Excess – the amount you pay to make a claim. There can be more than one excess that you need to pay in some situations
- Exclusions – items or events not covered by your insurance
- Extra options – many insurance policies have things that you can add on, usually for an added cost
The Product Disclosure Statement for the insurance you’re looking at will help to explain these things in more detail. You can find this on the insurer’s website or contact them to get a copy.
Give all the information to your insurer
It’s important to be honest when you’re answering the insurer’s questions. Your answers can affect whether or not an insurer will give you insurance. If it turns out later that you haven’t told them something that you should have, they may not pay out an insurance claim.
Step 3: Choose which insurance you want
Compare the quotes you get and think about which one will give you the best value for money, and the coverage you want. When you have made your decision, contact the insurance company and arrange your policy – this will include arrangements to start paying your premiums.
Insurance comes with a ‘cooling off period’ of at least 14 days, where you can tell your insurer if you change your mind and get a refund of any premiums you’ve paid (as long as you haven’t made a claim).
For car insurance, find more detailed guidance on choosing car insurance.
For home insurance, get more information from choosing home insurance.
Some insurance comes with offers like loyalty points or other bonuses. Be wary about the overall value these add to your purchase.
Step 4: Get help if you need it
Choosing an insurance policy can be tricky for everyone.
If you need more help, you can talk to a financial counsellor or legal service. There is no shame in getting help if you're having trouble.
Financial Rights Legal Centre’s Insurance Law Service
For free and independent legal advice about your insurance coverage or for support with a claim, call the Insurance Law Service on 1300 663 464.
Mob Strong Debt Help
A free, confidential and independent financial counselling and legal service for Aboriginal and Torres Strait Islander peoples, they can help you talk to your insurer and work through your options. You can call the free Mob Strong Debt Help line on 1800 808 488.
National Debt Helpline
The National Debt Helpline can give you free help from financial counsellors if you need more guidance on your options, or support with talking to your insurer. Call the free National Debt Helpline on 1800 007 007.