How to drive down the cost of your car insurance
Published 02/03/2012 | 06:00
If you think that the easiest and most effective way to reduce your car insurance premiums is to switch provider, you'd be right.
New research has confirmed that consumers are more likely to switch their motor insurance than any other type of financial product or service.
According to a survey commissioned by the National Consumer Agency, car insurance recorded the highest level of switching in the past year, with 13pc of consumers reporting that they had changed provider.
The average amount saved for car insurance was €102, but the NCA has repeatedly shown in previous surveys that, in some cases, it is possible to save more than €1,000 just by making a few phone calls.
But there are a few other tricks besides switching that can each magically reduce premiums if you are ready to take the time and effort to give them a try.
Discounts for using public transport
Some car insurance companies, such as brokers Chill Insurance, now offer discounts of up to 20pc to policy holders who use public transport to get to work. You'll have to prove it by showing you have a travel pass or a tax-saver commuter ticket.
Saving: Up to 20pc off
Downgrading your cover
"You could consider reducing your cover to third party, fire and theft if your car happens to be over 10 years old, but you should take expert advice before doing this," says Jessie O' Connor, motor insurance expert with broker Getcover.ie.
Many drivers have considered this over the past two years, according to a recent survey of AA members in Ireland, but just 5pc of drivers went through with it, as most members thought the price gap between the two levels of cover was much narrower than they anticipated.
Raising your excess
If you have been claims-free for a number of years, you could consider raising your excess as a way to reduce your premium.
Selecting a higher excess means that you will have to pay a higher contribution in the event of a claim, so think carefully about this. You might be saving a few euro on your premium but may be left with a hefty sum to pay if you are unfortunate enough to claim.
"There is always an excess," said a spokeswoman for the Professional Insurance Brokers Association ( PIBA). "The higher you increase the excess, the lower your premium but the question that arises is, is the level of cover still adequate?"
Check out if there are any deals for buying car insurance and home insurance from the same provider. Many offer multi-insurance discounts. AA members, for example, can get a discount of up to 14pc on their car insurance with AA Ireland.
You should also check if your premium would be lower if you added your spouse or partner to your policy, as is often the case.
Saving: Up to 15pc off
Review your job descriptions
The occupation you list with your insurance firm can make a big difference to your premium.
For instance, journalists are generally regarded as a higher-risk occupation because it is assumed they do a lot of mileage per year. However, some firms may have a lower-risk classification for journalists who primarily work from home.
John Farrell, commercial director of AA Ireland, also recommends telling your insurer if your annual mileage reduces as a result of changing your job, or moving home.
Insurance company AXA and brokers 123.ie and Onedirect.ie are among a number of providers who offer 10pc discounts if you book your insurance online.
Saving: 10pc off
Ensure your car's value is not over-rated
Many of us probably believe our cars are worth more than what the market says they are worth, so it makes sense to obtain an accurate value.
"Don't overvalue it as this will push up your premiums, but don't undervalue it either as you will run into difficulty in the event of a claim," says O'Connor of Getcover.ie.
O'Connor also recommends asking your provider about specific thresholds. "For example, the cost of insurance might jump at values over €20,000, so you might be better of insuring your car for €19,900."
Also worth noting is that if you have a fire or theft claim, the insurer will only pay what they consider to be the market value of the car.
Discounts for extra driving tuition or assessments
Aviva offer lower premiums if you complete their Ignition driving course, but if you have passed your test within the last five years, you can also do a free, one-hour safe driving assessment. Passing the assessment could save you as much as 40pc off you car insurance. They also offer discounts for those with advanced driving qualifications.
First Ireland, a broker, has introduced a new driving tuition programme called DRIVEsafe (see panel) that aims to offer cheaper insurance for learner drivers.
Saving: Up to 40 pc
Should you protect your NCB?
Depending on who you talk to, step-back bonus protection is either an unnecessary add-on or something that could save you hundreds if you need to claim.
Adding step-back bonus protection to your policy means that, in the event that you have to make a claim, you will not lose all of your no-claims bonus. You may just lose a year or two, although check with your insurer to see how exactly it works with them.