Motor insurance is one of the must-have insurances for all individuals and businesses. The statistics on car accidents make it clear that it’s an insurance policy that you must have to avoid the financial burden of a car accident. But with the ever-increasing costs of living, running a business, and insurance, reducing your insurance premiums without sacrificing cover is a must.

How are motor insurance premiums calculated?

The insurers have rating metrics that they use to determine the cost of a motor vehicle insurance policy.
These factors include:

• The vehicle itself – the year, make and model – certain vehicles are more expensive to repair, others are riskier with performance engines
• The value of the vehicle – how much they would have to pay to replace the vehicle if it were written off
• The garaging address – the overnight address plays a role in determining the insurance premium as your postcode could have higher claim statistics (thefts, storms)
• The driver – The driver’s age and driving history also weigh heavily in calculating insurance premiums – young drivers are particularly costly

All of the above are the main factors that the insurers use in calculating the cost of your insurance.

Reviewing your vehicle value

On a Commercial Motor Vehicle policy where you are insuring your truck, rigid vehicle, or prime mover for example, you will note that you have to select an amount that you insure your vehicle for. This amount is usually close to the market value of your vehicle. However, if you have not reviewed your vehicle value on your policy in quite some time, it’s best that you do some research to determine if the amount your vehicle is insured for reflects the true value of your vehicle. You will note on your insurance policy that your vehicle could be insured for $XXX, “OR Market value – whichever is the lesser“. What this means is that even though you have elected $XXXX to insure your vehicle, if you were to write your vehicle off, the insurer will only pay up to the market value if the figure of $XXX is higher than the market value. As there would be no rebate if you insured your vehicle for higher than the market value, it’s important to review this figure annually. You can reduce your insurance premiums by ensuring that your vehicle value decreases on your policy to match depreciation.

NSW Stamp Duty Exemption

In NSW, if you are a small business turning over less than $2,000,000 you may be eligible for the NSW Stamp Duty Exemption. If eligible, this can be applied to your Commercial Motor Vehicle Insurance. This can reduce your premiums by close to 10%

To see if you are eligible for the NSW Stamp Duty Exemption, please refer to

Revenue NSW website:

• Revenue NSW “Small Business Exemption” heading in Frequently Asked Questions – http://revenue.nsw.gov.au/info/legislation/budget/201706/faq
• Insurance Duty- http://www.revenue.nsw.gov.au/taxes/insurance/factsheet/overview

Increasing your excesses

An excess is an amount you have to pay if you make a claim on your insurance policy. It’s a way of you sharing a small portion of the costs with the insurer. On most Commercial Motor policies the standard excess is usually $600. For larger higher value vehicles, you could see that your excess is 1% of the sum insured. Increasing your excess could reduce your premiums.

Adjusting your radius limit

The radius at which your vehicle is insured under your policy can have a big bearing on your insurance premium. If your radius is greater than the radius that you intend to travel, you should consider reducing this as it can lower your insurance premiums.

Reviewing your drivers

Specifically noting that you have under 25-year-olds driving your vehicles attracts a larger premium. If you have had staff members that were under 25 driving your vehicle but are no longer doing so, you should update your insurance policy to remove them as this will lower your insurance premium.

Reviewing your accessories that are listed

It’s extremely important to note all of your vehicle accessories under your policy to ensure that if your vehicle was written off, you would be financially reimbursed adequately. Adding accessories to your policy is likely to increase your insurance premium. A solution on how to keep your insurance premiums low is by reviewing your commercial motor insurance policy coverage. Most commercial motor insurance policies offer automatic additional accessories to your policy up to a certain value ($5,000 is standard). If your insurer offers this cover, you won’t need to list accessories that are automatically covered.

Paying your insurance premium annually, and not monthly

An easy way to lower your insurance premiums is not to opt for monthly instalments. Monthly Instalments tend to add around 10% extra to your motor vehicle insurance. However, the convenience of monthly instalments may be worth the additional cost to alleviate your cash flow.

Shopping around

One of the easiest ways to reduce your Commercial Motor vehicle Insurance is to engage Morgan Insurance Brokers. Morgan Insurance Broker has access to a large panel of approved insurers for your Motor Vehicle Insurance. We can approach close to 10 providers on your behalf to ensure that the premium you are receiving is the most competitive for your circumstances. View our fleet insurance brokers page for more information.

We do the hard work for you. We also understand that there is no need to be paying overs for insurance when it’s simply not required.