Car insurance shake-up

'Reporter: Bryan Seymour

It's all out war on car insurance, with a raft of new players entering the market. Australia Post, Aussie Home Loans, Coles, Woolworths, Mortgage Choice and Virgin Money are all promising to drive down your premiums.

For years, drivers thought they were shopping around for a car insurance quote from the many companies fighting for their business.

They were wrong.

In truth, 12 of the biggest brands were owned by just two companies; Suncorp (which owns brands like AAMI and GIO) and IAG (which owns brands like NRMA and SGIO). Together, they controlled 75% of Australia's $5.5b car insurance market.

Now, at last, the brakes are off as new players enter the market and competition increases.

Virgin Money is the latest company to take the risk of insuring drivers.

Virgin Money Managing Director, Matt Buxby: "Two large incumbents, 75% of the market and we think we can offer something really different for Australian customers."

Virgin Money's biggest selling point.

"Capped premiums for two years... certainty that the premium won't go up over that period if your circumstances don't change. As the value of your car goes down, why should your premium go up?"

Virgin is jumping on the car insurance bandwagon with Australia Post, Coles, Aussie Home Loans, Mortgage Choice and soon, Woolworths.

Today Tonight compared car insurance quotes from six insurers on a 2005 Toyota Camry sedan, parked in an average suburb and owned by a 39yo female driver.

- QBE - annual premium $1071

- AAMI - annual premium $938

- GIO - annual premium $905...

- Virgin Money - annual premium $888...

- Aussie Home Loans - annual premium $859

- Australia Post - annual premium $729 ($342 less than the most expensive, a 32% reduction).

Choice magazine's Christopher Zinn welcomes the increased competition.

"The best thing you can ask for as a consumer is real competition."

"We've looked at different kinds of insurers and how much you can save, and particularly for younger drivers, we've found you can save $1500."

"Generally with insurance, thankfully, you're not locked in by a contract so you can cancel it at any time and you can move somewhere else, you can move your business to a better provider," added Zinn.

As for Virgin, their car insurance business is the latest in a raft of new ventures set to shake up; next home and contents insurance, then retail banking.

And you could meet Virgin founder Sir Richard Branson.

Virgin is running a competition in which the winner gets to drive Sir Richard around Sydney for the day in his London cab PLUS youâ??ll get a free trip for you and a friend to join him at the Singapore Grand Prix.

Further links and information

'Driving Sir Richard' Virgin Money Car Insurance Competition

Choice - Car Insurance Comparison (Pay site)