Insurance: How to slash your costs and beat the cost of living crisis.

For many Australians, managing insurance feels less like a safeguard and more like navigating a minefield. The fundamental truth is that insurance is not one-size-fits-all. As our lives change—from starting a family to becoming empty-nesters—so too should our coverage. This section will explore some areas where policyholders commonly overpay.

How to cut insurance costs.
Harness the power comparison websites.
Smart Strategies to Reduce Your Premiums.
Government Support for Cost of Living and Financial Health.
Hardship Options for Essential Insurance Payments.
Overinsured? Consolidate multiple super funds that may have life insurance imbedded.
How to consolidate your super funds.
Health Insurance, the power of the audit.
A Smart Guide to Insurance Cover.

How to Slash Your Insurance Costs and Beat the Cost of Living Crisis

In the current climate of rising costs, insurance premiums—for your car, home, or health—can be one of the largest and most painful expenses. However, saving hundreds on your insurance is possible with a strategic approach. The key is to compare rigorously and use the specific resources that various companies and the Australian Government has made available to help you.

Harness the Power of Comparison Websites

The single best way to reduce your insurance bill is to never automatically renew. Insurers often reserve their best prices for new customers, which is why comparing quotes annually is essential. These Australian comparison websites make the process simple:

iSelect: This site allows you to compare a wide range of products including Health Insurance, Car Insurance, and Home and Contents Insurance side-by-side. It is a one-stop-shop for many of your policy needs.
- iSelect
Canstar: Renowned for its expert ratings and awards, Canstar provides detailed comparisons across categories like Home Insurance, Car Insurance, and Life Insurance. They focus on helping you find not just the cheapest policy, but one that offers the best overall value and features.
- Canstar
Finder: Finder is another major comparison engine that helps you review and find better deals on everything from Car Insurance to Health Insurance, often highlighting exclusive offers and deals.
- Finder
PrivateHealth.gov.au: For health cover, the Australian Government provides its own comparison tool. This is a must-use resource as it lists every registered private health insurance product in the country, allowing you to easily find and compare covers based on your specific needs.
- Compare health insurance policies

Smart Strategies for Reducing Your Premium

When you are comparing policies, remember that the price isn’t the only thing that matters. You can actively lower your premium by adjusting your cover settings:

Increase Your Excess: For home and car insurance, increasing your voluntary excess (the amount you pay when you make a claim) will almost always lead to a significant drop in your annual premium. Just ensure you can comfortably afford the excess amount if you need to claim.
Bundle and Save: Many insurers offer discounts if you purchase multiple policies (e.g., car and home) from them. Always ask about multi-policy discounts.
Review Your Sum Insured (Home & Contents): Ensure your policy accurately reflects the replacement value of your contents or the rebuild cost of your home. Over-insuring means you’re paying for cover you’ll never use, while underinsurance is a dangerous mistake that can leave you exposed.
Pay Annually: Most insurers charge a fee or slightly higher premium if you choose to pay your premium monthly or fortnightly. If possible, pay for the whole year upfront to save on these administrative charges.
Drive Less, Pay Less (Car Insurance): If you are driving fewer kilometres, ask your insurer about a low-kilometre policy as this could substantially reduce your premium.

Australian Government Support for Cost of Living and Financial Health

Beyond direct comparison, the Australian Government provides resources to help you manage your money, which can indirectly lead to better insurance savings and overall financial security.

The Australian Securities and Investments Commission (ASIC) runs the official Moneysmart website, which is a fantastic resource for managing your budget, bills, and debt.

Moneysmart.gov.au This site offers practical tips to manage your money during the cost of living crisis, including advice on bill smoothing (paying large bills like insurance in smaller, regular amounts) and general budgeting to free up cash.
- Manage the cost of living

Crucially, Moneysmart also offers specific guidance on one of the biggest risks when cutting cover: Underinsurance. They have guides to help you calculate the correct cover you need to avoid financial disaster, ensuring you save money smartly without leaving yourself exposed.

For those in severe financial hardship, the government provides access to free financial counselling services. These professional services can help you manage overwhelming debt and budget for essential payments like insurance. You can find accredited services via the National Debt Helpline (referenced on the Moneysmart page).

Hardship Options for Essential Insurance Payments

If you are struggling to make essential insurance payments (such as for your car or home, which are often mandatory or highly advisable), it’s crucial to act before your policy is cancelled. Many insurers have dedicated hardship programs designed to assist customers facing financial difficulty.

What to do if you’re experiencing hardship:

Contact your insurer immediately: Don’t wait until you miss a payment. Explain your situation to them. Most insurers have specific financial hardship teams or processes.
Be prepared to provide details: They may ask for information about your income, expenses, and the reasons for your hardship (e.g., job loss, illness).
Discuss available options: Insurers may offer solutions such as:
- Payment plans: Spreading outstanding payments over a longer period.
- Reduced premiums: Temporarily adjusting your cover or excess to lower your premium.
- Payment deferrals: Postponing payments for a short period.
- Waiving late fees: Removing charges for missed payments.

The General Insurance Code of Practice (developed by the insurance industry) includes provisions for handling customers in financial hardship. While it’s not a government website, it reflects the industry’s commitment to supporting customers.

Where to find more information and support:

National Debt Helpline: If you’re overwhelmed, the National Debt Helpline offers free, confidential financial counselling. Counsellors can help you understand your options, negotiate with insurers, and create a budget.
- National Debt Helpline
Financial Counselling Australia: This is the peak body for financial counsellors, and their website can help you find a local service.
- Financial Counselling Australia

Remember, communication is key. Insurers generally prefer to work with you to keep your policy active rather than cancelling it, as this benefits both parties.

Stop the Super Drain: The Case for Consolidating Your Accounts

If you’ve ever changed jobs in Australia, chances are you have more than one superannuation account. While having options is generally good for consumers, in the world of super, multiple accounts can be a silent retirement savings killer. The primary culprit? Duplicate fees and unnecessary, embedded insurance policies.

Consolidating your super into a single, high-performing fund is one of the most straightforward and powerful financial moves you can make to boost your eventual retirement balance.

The Hidden Cost of Multiple Accounts The impact of holding multiple super accounts goes beyond juggling paperwork; it directly chips away at the power of compounding returns—the engine of your retirement savings.

1. The Duplicate Fee Trap

Every super fund charges administrative and account-keeping fees. These are typically charged as both a fixed dollar amount and a percentage of your balance.

Fixed Fees Multiply: If you have three super accounts, you are paying three separate sets of fixed administration fees. These mandatory deductions can easily chew up hundreds of dollars every year, money that is permanently removed from your investment base.
The Erosion Effect: While an extra $50 fixed fee per year might seem insignificant, the real damage is done over decades. That $50, if left in the fund and earning an average return, could compound into thousands of dollars by the time you retire. For a typical full-time worker, the cost of unnecessary multiple accounts can result in tens of thousands of dollars less in retirement savings.

2. The Insurance Leak: Paying for What You Don’t Need

Most super funds automatically provide members with Default Insurance Cover, usually including:

Life Cover (Death Benefit)
Total and Permanent Disability (TPD)

When you start a new job and a new super fund is created, you are automatically enrolled in a new insurance policy. If you have three super accounts, you could be unknowingly paying three separate premiums for what amounts to the same safety net.

Unnecessary Premiums: You are paying multiple premiums, but your actual payout in the event of death or disability may not be triple the cover—it is often capped or subject to complex claim rules. These duplicate premiums are deducted from your super balance, essentially reducing your savings for an unusable or unnecessarily complex benefit.
“Zombie Insurance” Protection: Recent legislation has attempted to address “zombie insurance” (policies on inactive accounts), but the best defence is to take control yourself. By consolidating, you ensure you are only paying a single premium for a policy whose coverage you have actively verified meets your actual needs.

How to Consolidate Your Super the Smart Way

The process of consolidating your super has been streamlined by the Australian Taxation Office (ATO) and your chosen super fund. It is easier than ever, but requires one critical check to ensure you don’t lose valuable benefits.

Step 1: Use the ATO to Find All Your Accounts
The easiest place to start is the myGov website.

Log into your myGov account and access the linked ATO services.
Navigate to the Super section. Here, you will see a list of all super accounts in your name, including any that have been classified as “lost” or inactive.

Step 2: Choose Your Keeper Fund
Select the one fund you want to keep. This choice should be based on three factors:

Fees: Compare the administration and investment fees of all your funds. Choose the one with the lowest overall cost.
Performance: Compare the long-term investment performance over a five-to-ten-year period.
Insurance Quality (The Critical Check): Before you combine, always check the insurance policy attached to the account you are closing. If you have a pre-existing medical condition, or if your old fund has a highly valuable policy (like a generous “Own Occupation” TPD definition), you must:
- Apply to transfer the cover to your chosen fund before consolidating.
- Receive written confirmation that the new fund has accepted the transferred cover.

Step 3: Initiate the Rollover
Once you’ve chosen your fund and confirmed your insurance status, you can initiate the transfer, usually in minutes:

Via MyGov: Use the “Transfer Super” function in your ATO online services. This is quick, secure, and will transfer the full balance of the closing accounts to your nominated fund.
Via Your Super Fund: Your chosen fund can often perform the consolidation on your behalf. Simply log into their online member portal and follow the “Consolidate Super” or “Find My Super” prompts.

Consolidating your multiple super accounts is a simple, proactive step that stops the continuous drain of unnecessary fees and insurance premiums, ensuring more of your money stays invested and growing for your future retirement.

Decoding the Insurance Maze: A Guide to Smart Choices in Insurance Cover

The Trap of Duplicate Insurance in Your Super Fund

The rise of job mobility means many Australians end up with multiple superannuation accounts. This can lead to paying multiple sets of fees and, critically, duplicate insurance premiums.

Most super funds automatically provide members with default Life Cover (Death), Total and Permanent Disability (TPD), and sometimes Income Protection insurance [1.1]. While convenient, holding this default cover across two or more funds means you are paying premiums that erode your retirement savings in each account.

Why Duplicate Super Insurance is Risky:

Eroding Retirement Savings: Premiums are deducted directly from your super balance, reducing your final retirement nest egg [1.1].
Income Protection Caps: For Income Protection, most policies include “offset clauses” and you generally cannot claim more than 70% of your pre-disability income across all policies combined. Paying two premiums often doesn’t mean a double payout [3.2].
Claim Complications: While you can generally claim on multiple Life/TPD policies, managing multiple claims and ensuring you meet all of each fund’s specific terms and conditions can be complex during a crisis [3.2].

Your Action Plan:

Consolidate Your Super: Use the Australian Taxation Office (ATO) online services via myGov to track down all your super accounts [3.3] and merge them into one primary fund.
Crucial Insurance Check: Before closing any old fund, check its insurance cover. If you have pre-existing conditions or a higher level of cover in the old fund, you may not be able to replicate it in the new fund. Always confirm your new fund’s cover is active before cancelling the old policy [3.1], [3.3].

Health Insurance, the power of the Audit

Overpaying for Unused Benefits in Health Insurance
Private health insurance premiums have consistently risen faster than inflation, making it essential to strip out any cover that no longer matches your life stage. Policyholders are often paying for inclusions they are certain to never use.

The Example: Pregnancy and Birth Cover

Hospital policies that cover Pregnancy and Birth are typically classified as a Gold or Silver Plus tier product. This is a costly inclusion. Once you are past the age of having children, or have definitively decided against expanding your family, maintaining this level of cover is financially wasteful.

According to advice from the government’s independent consumer website, you can negotiate with your health fund to exclude certain services (like pregnancy) in exchange for a lower premium [4.1].

Other Unnecessary Costs to Review:

Unused Feature	Who Might Be Overpaying?	Potential Saving Strategy
Low Hospital Excess	Healthy individuals who rarely enter the hospital.	Choose a higher excess (e.g., $500 or $750). This significantly reduces your annual premium, potentially saving you more over a few years than the one-off excess payment [4.1].
Assisted Reproductive Services	Older couples/singles, or those who have completed their family.	This is a mandatory component of Gold-tier policies. Downgrade your cover to Silver or Bronze (with no ‘Plus’ upgrades for these features) to remove it [4.1].
High-Limit Extras	People who only visit the dentist and optometrist once a year.	Check if the annual premium for your Extras cover is more than the total benefits you claim. If so, you may be better off downgrading or even dropping Extras entirely [4.4].