Reducing Costs – Easier Than You Think
TRYING to keep the cost of your car insurance down can seem like an uphill struggle, particularly when the cost of premiums are rocketing. The Office of Fair Trading (OFT) have already said they plan to probe the ever-increasing cost of insuring you car, but you can also take step to cut the cost of your cover.
The AA’s British Insurance Premium index is an excellent way to track the cost of premiums. It revealed that the cost of comprehensive cover was up by over 40% in the 12 months to March 2011.
One of the main reasons behind the increase, experts believe, is the current compensation culture in the UK which has led to excessive and unecessary personal claim applications. Let’s face it, you can’t turn the telly on during the day without someone asking you if you’ve been injured in an accident.
“Rising claims costs from personal injury claims, excessive legal costs, insurance fraud and uninsured driving, coupled with lower investment returns in recent years, have unfortunately led to rising motor insurance bills for many customers,” said Otto Thoresen, director general at the Association of British Insurance.
“In fact the motor insurance sector has not been profitable for the last 16 years because the amount paid out in claims and expenses has been greater than that received in premiums.”
But the Government have stepped in to help out cash-strapped motorist. Following on from the announcement of the OFT’s investigation, the coalition revealed that it was outlawing referral fees. This is money which is paid to insurers by third parties who supply them with details of people who have been the victims of accidents.
This move is designed to help reduce the cost of premiums for motorist, so it’s hoped the ban will be put in place as soon as possible to put some money back in your pocket.
However, things can move quite slowly when it comes to Government legislation, so don’t wait around for them to cut the cost of your car insurance quotes. There are many ways you can save money on cover for you motor.
Cheap car insurance, tips to save time and money:
Shop around at renewal time
When it comes time to renew your policy, your insurer will send you out a renewal quote that’s usually not very competitive. Basically, they are relying on your laziness, hoping you’ll just accept the renewal.
Yet, UK motorists waste an eye-watering £2.5billion every year by just letting their insurer automatically renew their policy.
When you get your renewal quote, compare a range of other insurers to see if you can get it cheaper quote somewhere else. Chances are you will find a better deal, so either take it or use it to bargain with current insurer to get your renewal quote down.
Shopping around has never been more profitable. Savvy motorists can save over £330 on average, that’s around £100 more than they were saving by comparing quotes last year – a jump of over 40%.
In some cases, it may be hard to find a cheaper deal elsewhere. In this instance, you should study the policy your insurer is quoting you for. You may find they have added in a few things you don’t really need to bump of the price.
Keep it safe
Insurers just love safety. If you have proper security features in your car, such as a wheel lock or immobiliser, you will pay less on your premium, provided they are approved by your insurer. If your car doesn’t come with security equipment, you should consider getting some fitted as a little investment will save you in the long run.
If you have a garage, make sure you have enough room in it to keep your car locked up for the night. This will see your insurance costs tumble.
Be better qualified
Young drivers will be well aware of the high cost insurers. They equally know there’s little they can do about until they are a bit older.
But one thing they can do is gain extra driving qualifications through courses such as PassPlus. Insurers will offer discounts for drivers with these qualifications, but it’s worth double checking with them before you take out a policy as other factors, such as when you passed your test can affect the discount. The PassPlus course usually costs around £150.
If you add a more experienced driver to your policy this could also cut the cost of your insurance.
Up the excess
In the event of a claim, you will have to pay some money up front. This is your voluntary excess and is set when you take out your insurance policy. A higher excess means you will pay a lower premium, but it will also mean you pay a lot more if you do have to make a claim.
Paying a higher excess can save you money on your insurance, but could cost you in the long run so try to get the balance right.
Steer clear of modifications
If you are looking to keep your insurance costs down, keep it simple. You may think that alloy wheels or a pricey stereo will add value to your car, but it will also bump up the cost of insurance. Making modifications can mean your car has more chance of being stolen, and in turn jack up your premium. Think carefully before making any changes to your car.
Pay up front
If you can, pay the whole cost of your premium up front. Making monthly payments will mean you pay interest and other charges, which will negate any savings you have made by shopping around.