Personal Finance

Tuesday 22 July 2014

How to put a dent in your annual car insurance bill

Charlie Weston

Published 23/01/2014|02:30

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Dented car. Photo: Thinkstock

THE high cost of motor insurance is something that the majority of families in Ireland have to contend with.

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Census 2011 told us that car ownership among households continued its upward trend, with 1.36m homes having at least one car in 2011. This was an increase of 186,000 from 2006.

And, for the first time, more third-level students drove to college than used any other mode of travel. A total of 28pc of students drove to college in their own car, compared with 22pc five years previously.

The problem is that motor insurance is not a discretionary spend. If you drive a car, you are legally obliged to have insurance.

But there are ways to cut the cost of cover, says David Curley, a motor manager at CoverInAClick.ie.

Only pay for what you require. If your car is a banger, there's little point in having comprehensive insurance.

Most people don't claim for minor damage to avoid impacting on their no-claims bonus, so go for the larger excess (say €500) and get the benefit of the reduced premium.

If you want to teach your teenager to drive, work out the alternative costs you might face.

Adding them to your or your spouse's cover, or arranging separate cover for them, may work out cheaper. Don't just assume that one will be cheaper than the other.

Check out the change in premiums before buying a different car – particularly if you're young.

The premiums for two apparently similar cars can vary considerably. Insurance rates are nigh on impossible to predict, Mr Curley says. There are insurance companies that specialise in insuring young drivers that are only available through the broker channel, he adds.

If you're at the position where you're buying a car, consider engine size. This will invariably affect your insurance premiums.

Try adding a driver to your policy. For example, in a lot of cases the insured and spouse/partner rate is lower than the insured only.

Additional security features can make a difference. So make sure you tell your broker if you have an alarm, immobilizer or if your car is kept in a garage – it all adds up.

Ask your insurance company if you are eligible for a discount if you have more than one policy with the company. You may find the more policies you have, the more money you save.

The occupation you go under may have a significant effect on your premiums. Most of us could truthfully describe our job role in a number of different ways – administrator, clerk, manager. You must still be wholly honest, but ask an expert about this and you could end up knocking money off your premium.

Also make sure the value of your car is correct – don't overvalue it as this will push up your premiums, according to CoverInAClick.ie.

Don't undervalue it either, you will run into difficulty in the event of a claim. Ask your provider about specific thresholds. For example, the cost of insurance might jump at values of more than €20,000, so you might be better off insuring your car for €19,900.

If you have a fire or theft claim, the insurance will only pay what the insurer considers to be the market value of the car, no matter what you have insured it for.

Irish Independent

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