Cut your general insurance costs
Insurance costs eat into household budgets, but there are ways to slash them, says Charlie Weston
Published 14/01/2010 | 05:00
MANY Irish households spend as much as €4,000 a year on a large variety of insurance premiums.
It can be a huge part of the cost of running a home.
However, many families are over paying for policies that they could get for considerably less than they are paying their current providers, according to the Irish Brokers' Association (IBA).
Chief executive of the IBA Ciaran Phelan says: "A thorough review of your protection policies could result in considerable savings."
And who does not want to make savings these days?
It is imperative that families carry out a budget review, especially at times of the year like now that are monetarily demanding.
Nearly half of Irish households deal directly with their insurance company under the misconception that this is the cheapest option, Mr Phelan maintains.
However, evidence suggests that dealing directly with an insurer is very rarely cheaper than going through a broker, he adds.
"Huge savings can be made due to a variation in premiums and cover across all classes of insurance," Mr Phelan added.
However, in order to make an accurate comparison of price , customers need to ring up to 25 insurance companies which is very time- consuming and often off- putting.
The easy option, then, would be to seek the assistance of a qualified independent broker to do this research on their behalf.
The Irish Independent's 'Your Money' challenged the IBA to come up with price-busting premiums on a range of insurance products. (See graphic)
The IBA looked at the following principal classes of insurance:
Many consumers choose mortgage protection and term assurance to replace their income in the event of their untimely death.
A 40-year-old couple looking for €200,000 to €300,000 worth of cover could typically spend up to €1,000 per annum.
Mr Phelan insists that savings of 10pc to 20pc are realistically achievable because people are living longer and are less inclinded to die than previously.
This makes them less inclinded to claim on a mortgage protection or term assurance policy.
That should amount to saving of at least €150 a year.
This is insurance that provides an income of up to 75pc of your current earnings in the event of a prolonged illness or disability.
This type of insurance is often overlooked as it can be expensive and choices can be limited.
It is imperative to get the right advice as cost and the right cover vary considerably if the cover is not provided by the employer.
While competition is still limited in this market, there are still savings to be made.
Consumers are generally more active in reviewing the cost of this class of insurance and rightly so, with rising insurance premiums and the typical family shelling out €800 to €1,100 on two cars, Mr Phelan points out.
Savings of over €200 per annum are easily attainable following a simple re-price of the market, he added.
Consumers are either under-valuing their home or over-valuing them, the IBA boss said.
One of the common misconceptions is that you need to insure your home at its current value. Consumers should be insuring their homes at the rebuilding cost which is considerably less.
Both of these values appear to be falling at present, which could result in a premium saving.
Other forgotten insurances that we have include: travel , serious illness, payment protection, insurance on loans, etc.
Again with the right advice and guidance, significant savings can be made here.