Cutting The Cost Of Car Insurance Without Cutting Corners.
No-one enjoys buying car insurance but it's one of those things we have to do to comply with the law.
In fact the law only requires that we carry 'Third Party' insurance but anyone with a car that's worth a bit of money is going to want to make sure they are covered if it gets damaged which is why we have Comprehensive cover.
There was a time when Comprehensive cost roughly double that of Third Party but not any more. In fact in many cases this has reversed and Comprehensive is cheaper than Third Party. The reasons for this are complex and fall outside the purpose of this article but basically the insurers have found that people with cheap cars and basic insurance tend to have a higher claims ratio possibly caused by taking less care due to the low value of their vehicle etc. This could be regarded as a social stereotype but statistics play a major part in calculating insurance premiums. Insurers have also developed networks of repairers who operate at fixed costs and have streamlined the whole repair process thereby reducing the claim cost difference between the two covers.
But regardless of this we have seen premiums increase by large amounts in recent years mainly driven by increasing numbers of injury claims (both genuine and fake) and increasing legal costs. Therefore, it is now even more important to find ways of reducing your premiums as much as possible. But you need to be careful you are not compromising your cover. You could, of course, simply go to one of the many comparison websites and simply choose the lowest premium. But are you sure you fully understand what you are buying? Could you buy better cover for the same premium by simply changing your risk profile without reducing your benefits?
There are many ways of buying insurance - the internet, over the phone, the high street broker etc but whichever way you choose to do it you must be sure you understand the product you are purchasing. If you buy off a website you must read ALL the terms and conditions. Many websites are 'assumption based' This means that instead of you answering a load of questions they will assume the answers and you tick a box to confirm it. Make sure you read and understand everything first! Many people just want the quickest and cheapest quote but this can lead to disaster because the insurer can refuse cover if a claim is made and they find you have made a false declaration because you have not read everything properly.
But if you buy over the telephone or 'face to face' you should have someone to explain it all to you and assist you with making the best decision. It might take a bit longer but at least you have the assurance of being properly covered. This is not to say that buying from a website is bad of course, it's just that you don't have anyone to check it through for you. So if you are at all unsure speak to someone personally for advice.
So how do you get the best terms whilst maintaining a good level of cover?
It's obvious that a new sporty car is going to cost more to insure than an older family saloon. But there are other considerations like the cost of the repairs, how easy they are to damage, attraction to thieves etc. Check quotes before you buy the car. Could you go for a model that doesn't have a body kit for example? 2 cars may be the same mechanically but the one with the sideskirts and bigger wheels etc may cost more to insure because it is likely to be driven more 'enthusiastically' and attract the wrong kind of attention!. Avoid unofficial imports and left-hand drive cars or cars that have been written off before or cars that have been modified.
Who drives your car?
Oddly, adding drivers can actually reduce your premium. If you are married or living with a partner and they have a licence try adding them to the policy. The insurer sees a steady couple driving the car as a better risk. But if you have drivers aged under 25 see if you can take them off to save money. Avoid 'any driver' and name them instead. Avoid adding anyone who has had claims or convictions or have a risky occupation.
Do you drive anyone else's car?
If you are a named driver on another policy mention it as this can sometimes qualify for extra discount especially if you don't have much no-claim bonus of your own.
Some occupations attract a higher premium because of the way they are presented. For example a 'delivery driver' will often cost more than a 'van driver' because your insurers think you may use your car for work. It is vital that you tell the truth at all times but how you present it can make a difference to the premium. If you are retired then make sure it's shown as retired and not unemployed etc and if you are not working check that commuting cover is taken off as it could be cheaper. Make sure any part time occupations are declared as well. Sadly, some occupations will always cost more like scrap dealers, nightclub doormen etc and the only way to avoid this it to get another job!
This is often done on 'good will'. This means you declare how many miles you are likely to do but it's rare this is checked out by an insurer but all the same always be as accurate as possible because it could be checked. But lower mileage is not always better. Someone who does 1000 miles a year can pay more than someone doing 6000 because lack of regular driving in different conditions can make them a worse risk. If you use your car for work then calculate the split between private and business use.
This is the amount that you agree to pay towards your own damage. Think about the maximum that you could afford to find in the event of a claim and ask for this. A £300 excess will normally be quite a bit cheaper than a £100 excess but there is no point going too high. You may find little benefit in asking for a £500 excess etc. Also make sure you know what the TOTAL excess is. Some insurers will have a compulsory excess on top that is not always made clear so you can get a bit of a shock when you come to claim!
Your cars value.
This actually has very little bearing on your premium for the average motorist because the insurer looks at the age of the car and discounts accordingly. But again a very low value can sometimes attract a higher premium oddly enough. There is usually no benefit in stating the value of your car at under £3000 so make this the minimum.
It stands to reason that a car parked on the road is more likely to attract a claim than a car that is garaged or on the drive. So if you can park your car off the road and on your own property do so.
We can't always help where we live but some areas of the same town can vary greatly in premium so if you are thinking of moving get a quote first to avoid any nasty surprises. Most insurers now narrow down high risk areas to individual streets for example and some even refuse cover for some streets altogether.
I have already mentioned how Comprehensive cover can be similar or even lower in price to Third Party. If your car is not worth a great deal then it is still worth comparing the price of both Comprehensive and Third Party but remember not to lower the value of your car too much. If your car is not worth a lot then keep the value at a minimum of £3000 and look at comprehensive with a high excess. You may find this is cheaper than Third Party even if you don't intend to claim for your own car anyway.
Some insurers will try and add extras which can bump up the price considerably. These can include Protected Bonus, Legal expenses and Breakdown Cover. All are worthy extra protection but think about what you actually need and whether you can buy them elsewhere for less or even delete them altogether. (I would, however, strongly recommend that you have some form of Legal Protection cover should you have an accident that is not your fault).
Also check what, if any, administration charges your insurer makes. A premium that appears low at the start can soon become very expensive with charges if you make any changes to your policy.
Black Boxes. Some insurers are now offering schemes where a tracking device is fitted to your car and you are charged per mile or by how, where and when you drive your car. If you don't mind the thought of being logged then this could save you money but this type if insuramce is still in its infancy. Plus check any charges for taking the box out if you cancel the policy etc.
Paying for your premium.
Instalments can be attractive and some insurers will quote you a premium in monthly instalments because it looks better. Take time to add up these instalments are see how much extra you are paying. Can you afford to pay it off in one go? Also check any charges for paying with your card.
Know your insurer.
When you get your best quote do some checking online to see how good their reputation is. How easy are they to get hold of? Are the phone calls free or low rate? It's OK getting a low quote but in the event of a problem you could spend more than you have saved trying to get issues resolved.
I hope that the above helps you to keep your premiums low without compromising on cover and remember always tell the truth but give some thought to how you present yourself to an insurer.