Charlie Weston: How to save a fortune on your car insurance
Few drivers will have escaped the premium-rising blitz being imposed by the insurance industry.
This has left many drivers furious.
Despite a clean licence, no penalty points and no claims, hikes of €300 in premiums have become commonplace.
Some of the State’s two million drivers are being hit with higher hikes, especially if they have a claim on their policy, are a young driver, or have penalty points.
There have even been claims that the average cost of premiums could hit €1,000.
AIG, the world’s biggest insurer, said Ireland should consider banning such claims to avoid the average cost of premiums hitting €1,000.
There is a complex range of reasons for these premiums increases.
* Loss-making in the insurance sector due to under-pricing in the past;
* Investment losses being made by insurers;
* The need for higher reserves;
* Rising claims costs;
* Fraudulent and exaggerated claims;
* New regulatory rules and changes to the courts system.
However, the good news is that there are at least eight motor insurers active in the market, while credit unions are now involved in reselling motor cover at good rates for members.
Not all insurers are making losses at the moment. Aviva is managing to buck the trend.
All this means that shopping around for car cover is more important than ever.
Here are some ways to fight back against the savage premium rate rises and save money:
If you are claims-free, it makes sense to regularly switch insurer.
Compare rates from different insurance companies by ringing them or going online.
It is worthwhile using a broker. It won’t cost you any more than going directly to the insurer as the broker is paid by the company.
You may be entitled to a discount if you have more than one type of insurance policy with the same company.
Ask also if there are other discounts you might be able to get.
Don’t over insure
Other tips to keep the costs down include being conservative with the car’s value.
This is important as you can only claim what the vehicle is deemed to be worth by the insurance company's assessor.
People often overvalue their car. Check car sales adverts to get a good market indicator of your motor’s value.
Alternatively, the Revenue Commissioners website has a valuation tool for each model and year of manufacture, put in place for vehicle registration tax purposes.
Check the excess
And be careful about excesses. This is the amount you have to pay before you can make a claim. Lately, insurers are imposing higher and higher excesses.
This reduces the risks for them, but means you end up not claiming for small accidents. Excesses of €500 are not uncommon, but when they get to that level, they rather negate the value of having insurance.
Get a discount by using telematics
Telematics is a way of monitoring the location, movements, status and behaviour of a vehicle. You can do it through a smartphone.
Insurer AIG offers discounts of up to 20pc on motor cover for using an app that monitors driving style.
AIG says it aims to reward better driving behaviour with potential savings of up to 25pc on car insurance premiums.
Customers who use the app will be given a 20pc discount on their premium immediately and further discounts of up to 5pc will be applied to the premium after three months’ use, subject to the scores achieved.
Someone who drives smoothly and anticipates traffic flows should achieve a good score.
AIG says XLNTdriver is the first driving app on the market with an auto start/stop functionality, which means that users do not have to stop and start the app each time they wish to make a journey.
Men, get insured with Its4women
Online insurer Its4women markets its motor insurance at females but the law means it cannot refuse to cover men.
Because most of its customers are women, who are safer drivers and have fewer claims, it tends to be more competitive than motor cover sold equally to both sexes.
A recent European Union gender directive, which became the law in this country, means men and women can’t be discriminated against in terms of the price of insurance.
Dublin student Shane Spain was able to reduce the cost of his cover from €810 to €500 by opting for Its4Women.
Take out two-year cover
The cost of motor premiums are predicted to keep rising this year.
To ensure you pay the same this year as next, you could opt for two-year cover which is offered on motor insurance by Blue Insurance.
This means that the premium you pay this year will be the same again next year.
And if you have an accident in the two-year period, your premium will not rise.
The motor insurance product is underwritten by UK business Zenith Insurance.
Just the job
The job categories that insurers use to price your cover can be broad and many motorists could save money by describing their occupation differently.
For example, describing yourself as a housewife or a house-husband instead of being unemployed can help reduce your premium.
It’s worth experimenting to see if a different job title affects your premium, but you should never lie about your job. Don’t say you’re a butcher if you’re a baker. This is considered fraud and you could be prosecuted.
Avoid modifying your car, unless you are increasing its safety. Even a small modification to your car, such as new alloys, can cause your premiums to shoot up.
Any changes should be discussed with your insurer first.
However, any modification that increases safety - such as installing an alarm, or immobiliser - can help you cut costs.
Choose your car wisely. The more expensive your car and the bigger its engine, the more you are likely to pay.
You may also have to pay more if your car is imported or if there are more theft claims on your model of car. Check with your insurer before you buy a car, so you can estimate insurance costs.
Pay for your cover annually if you can afford to do this.
Paying for cover on a monthly basis is the same as taking a high-interest loan from your provider, with the interest as high as 20pc imposed on top of the premium for paying by instalments.
Park somewhere else
You may be able to save money if you let your insurer know that you will park your car in a locked garage.
Insurers often prefer this to the car being parked on the street or in your driveway.
Some areas will have higher claim rates and you will pay more if you live in a city than in a rural area.