Shake up your insurance and save hundreds
New Year is the perfect time to shake up your finances for the better. In the first of a four-part series on revamping your finances, Louise McBride shows how easy it can be to trim your insurance bill
OVER the next few months, a raft of bills is likely to flood through your letterbox -- among them your home and car insurance renewals.
While home insurance could set you back a few hundred euro a year, your car insurance bill could climb much higher than that -- in some cases, up to or over the €1,000 mark. Some simple steps, however, could knock hundreds or even thousands of euro a year off your insurance.
Get your discounts
You could be paying twice as much for your home insurance as you need to if you're not claiming all the discounts you're eligible for.
Let's say, for example, you've got a house insurance policy with AXA that costs €400 a year. If you've got an alarm, smoke detectors, are over 50, have not made a house insurance claim for the last three years, and have your motor insurance with AXA, the discounts you're entitled to could knock 55 per cent off your bill -- reducing it to €180.
Get an alarm
Allianz and AXA offer a 10 per cent discount off your home insurance if you have an alarm; Quinn Direct offers an eight per cent discount, while FBD offers five per cent.
If you have an alarm that is certified and approved by the National Standards Authority of Ireland and is linked to a central monitoring station, you could qualify for a discount of up to 28 per cent from Zurich Insurance. If you have smoke detectors or are a member of Neighbourhood Watch, Allianz and AXA will knock five per cent off your home insurance bill. Quinn Direct offers a similar discount if you have two or more smoke detectors.
Perhaps the biggest discounts available, however, are for those who are over 50; depending on how old you are, the age discount could be as high as 30 per cent with Zurich. Quinn Direct offers a 13 per cent discount if you're over 50; with FBD, the discount is 12 per cent; with Allianz and AXA, 10 per cent. If you're over 60, you can get a 15 per cent discount off your home insurance with Allianz and FBD.
Stick with the
You might also be entitled to a discount off your home insurance if you have another insurance policy with your home insurer or opt for a higher excess (the first part of a claim that you pay yourself).
For example, AXA offers a 15 per cent discount off your home insurance if you also have your motor policy with the insurer.
Not all insurers offer discounts on home insurance policies with higher excesses -- among those that don't are AXA, FBD and Quinn Direct. Among those that do are Allianz and Zurich. With Allianz, you usually pay the first €250 of any house insurance claim yourself.
However, if you increase this excess to €500, you'll qualify for a five per cent discount -- 10 per cent if you increase the excess to €750. Remember, though, the discount you get for a higher excess could be only a fraction of what you would pay if you have to make a serious claim. There's little point in saving €30 on a €300 home insurance policy by opting for a higher excess if you later have to make a claim and have to cough up €750 (instead of €250) of your own money.
It could also be worth your while checking the age of your house. If your house was built between 1985 and 2010, Zurich offers a discount of up to 25 per cent -- as well as a 10 per cent discount for first-time buyers.
If you have home insurance with AXA or Zurich, you could be entitled to a no-claims discount of up to 15 per cent, while FBD and Quinn Direct offer a discount of up to 20 per cent.
Don't expect your insurer to automatically pass on any discounts you qualify for -- if you haven't told the company that you have a house alarm and smoke detectors, this won't be noted in your policy -- or be reflected in your quote.
ON CAR INSURANCE
Don't make a claim
Perhaps the best way to keep your car insurance bill down is to drive carefully and avoid having to make a claim.
If you're in a serious accident, it may be impossible to avoid claiming -- but if you're in a minor accident, it could be worth your while covering the cost of any damage yourself to ensure you hold on to your no-claims discount. The no-claims discounts offered by some insurers could halve your car insurance bill.
With FBD, for example, if you have not made a claim under your car insurance policy for five years, you're entitled to a 50 per cent no-claims discount; however, you're not entitled to any discount if you made a claim over the last year. Zurich offers a no-claims discount of 55 per cent if you have not made a claim on your motor insurance policy for more than five years. Quinn Direct offers a no-claims discount of up to 70 per cent.
If you are a named driver on another motor policy, you may not be entitled to a no-claims discount -- even though you've never made a claim. Some insurers, however, offer discounts to named drivers as long as they have never made a claim. For example, Quinn Direct offers a named driver discount of up to 60 per cent.
Like home insurance, you can also bring down the cost of your car insurance by opting for a higher excess. With Allianz, the excess on standard motor insurance policies is €250. But by increasing the excess to €500, you'll qualify for a seven per cent discount. With FBD, you can knock five per cent off the cost of your motor insurance by opting for an excess of €500. An excess of €2,000 will entitle you to a 15 per cent discount from FBD, though an excess of this size may be unwise, particularly if you are an inexperienced driver or have a bad driving record. Hibernian Aviva offers a three per cent discount if you increase your excess from €300 to €600.
Other things you're not aware of which could entitle you to a discount include the annual tax saver commuter ticket for bus or rail travel -- Allianz will knock 20 per cent off the cost of your car insurance if you have this ticket. If you own a hybrid car, Allianz may give you a cheaper quote than it would for a standard car.
If your car is alarmed, Allianz will usually knock five per cent off your quote.
Hibernian offers a loyalty discount of eight per cent if you have continuously insured your car with it for at least three years. However, to qualify for this discount, you must have not made any claim on your motor policy in the last three years.
Hibernian also offers a five per cent discount if you keep your annual mileage below 8,000km.
As always, it's important to shop around the many different insurers as quotes can vary widely.
For example, let's say you're a 32-year-old male social worker from Lucan in Co Dublin, who drives a 1.4 litre 2006 VWPolo five-door hatchback. The value of your car is €10,000 and you drive about 5,000km a year -- purely for domestic use. You've a five-year no-claims-discount, no penalty points, and a full licence for the last 10 years. Your car is alarmed, and you want insurance for yourself and your spouse.
Quinn Direct quoted €376 for comprehensive car insurance, according to a survey by the Sunday Independent, while Allianz quoted €611. AXA quoted €541; Zurich, €506; and Hibernian Aviva, €448. FBD quoted €358 through nononsense.ie, but this policy included an excess of €500.
You could also knock a few hundred euro off your car insurance bill if you downgrade from a comprehensive policy to third-party, fire and theft. Comprehensive insurance usually covers the loss of or damage to your own car, any people injured during an accident (including those in your own car), and any damage you cause to another car.
Third-party, fire and theft insurance covers you only for any damage you cause to another car, and anyone in that car (as well as covering you for fire and theft). However, third-party fire and theft insurance could be more than 20 per cent cheaper than comprehensive insurance. Quinn Direct, for example, quoted the social worker above €376 for a comprehensive policy -- but €287 for third-party, fire and theft.