Car Insurance - Should We Be Paying Less?
It’s one of those payments every motorist accepts they have to make, but always wishes it was lower – car insurance ... Even with years of avoiding any mishaps on the road, drivers still find the price of an insurance policy is still rising.
In 2012 the Government responded to insurers plea for help in reducing the amount of false whiplash claims. Insurers reported these false claims were adding on average £90 to every driver’s insurance premium. The Government took notice and helped, within 3 years 23,000 less claims were made. This reduction translates to savings of £520 million for car insurance companies. Insurers promised to pass savings on to motorists, yet Confused.com claim insurance costs have increased by almost 20% in the last 12 months, leading to allegations of profiteering.
These allegations are strongly denied, Rob Cummings ABI’s general insurance manager, explains that savings of £1.1 billion were initially passed on to drivers, yet this figure is double what was saved. Because of this insurers are now trying to recoup the difference.
Even if insurers are not reducing their premiums, there are many things you can do yourself to save some money. So here are Rivervale Car Leasing’s top tips to keep your car insurance low!
- Always compare quotes. Many insurers will automatically renew your insurance policy for you unless you tell them otherwise, this is often not a competitive price. When you receive your renewal notice make sure you shop around using for the best price.
- Check your job title. If your job fits into many categories check them all when you compare. A ‘Music Teacher’ for example may pay more for their policy than a ‘Teacher’.
- Pay in one instalment. If you can, it is always better to pay for an insurance policy in one payment. Interest is added to the cost of your insurance when you spread the cost using a monthly direct debit, so you will pay more for the exact same product.
- Protect your no claims. If you have managed to accumulate several years no claims bonus then it is best to protect them. This will increase the cost of your policy slightly, but a no claims bonus can reduce the cost of your policy by up to 90% with some insurers.
- Check who is on your policy. Limit the amount of additional drivers to only those who regularly driving the vehicle. Be wary of adding new drivers as it will increase how much you pay. Insurers are now also cracking down on parents who put themselves down as the main driver on a child’s policy to reduce the cost in what is called ‘fronting’.
- Consider a ‘black box’. Insurers will install a telematics device to your vehicle to monitor driving. It will assess whether you are on the road at the busiest times as well as how safely you drive. For new drivers this is a way of significantly reducing costs by proving you can drive safely before building up years of no claims.
- Choose your vehicle wisely. Sporty or premium vehicles will have a higher insurance cost, as will those will many modifications. Insurance bands for vehicles are arranged by number, the higher the number the higher the cost. Our pick of low insurance cost vehicles include; Vauxhall Corsa, Nissan Micra, Ford Fiesta, Peugeot 108, Volkswagen Polo and the Fiat Panda. You can find the insurance group listed on the vehicle detail pages (below the slideshow) .
- Check the details of your policy carefully. Make sure the mileage claimed is accurate, if you are travelling fewer miles than on your policy you will most likely be paying more. Check which usage you have selected, if you do not use your car to travel to work or for business purposes let your insurer know and your premium may reduce. Check the extras on your policy such as windscreen cover, legal cover and a hire car, you will pay extra for these so make sure you do want them!
- Security. Most new cars now come with and alarm, immobiliser and tracking device, make sure your insurer is aware if your vehicle has these. The better the security the better the chances of reducing your car insurance bill. If your vehicle doesn’t have these safety features it may be wise to invest. If you have a garage, clear out all the boxes and use it for your car! Insurers view a vehicle locked in a garage as more secure than one parked on the road overnight so may charge a lower premium.
- Voluntary excess. Check how much the voluntary excess is set to on your policy. If you can, increase the voluntary excess to reduce your costs. If you have a non-fault claim this excess can normally be claimed back.
Do you think insurers should be doing more to reduce costs for motorists?
The comments above do not necessarily reflect Rivervale's views unless clearly stated.
30 August 2016
Written by Natalie Faughy