Staying with same insurer is a mistake
The best ways to keep down the cost of everyday home and motor insurance, writes John Cradden
Besides shopping around, you should also make sure your policy is not index-linked
IT IS reasonable to expect that both home and motor insurers will treat over-50s customers no differently to any other age category. But there are a few things worth bearing in mind when shopping for both motor and home insurance. In terms of motor insurance, drivers over the age of 50 are certainly a lower risk than those in their 20s, but industry sources say it is wrong to assume that over-50s drivers would be treated as a homogenous group.
"There is really no way of putting an age on this – it's completely dependent on the driver and on the insurer in question," says Dave Curley of online motor insurance brokers Coverinaclick.ie.
"Once people hit the 50 mark their claims history could look significantly different from their peers, so this will have a big impact on the cost of premiums. In addition, different insurers treat different customer profiles in different way – in the same way that some cater specifically for the younger end of the spectrum so, too, do some focus more on an old driver and as such offer these drivers deals and so on."
Among the firms and brokers that claim to offer discounted policies for "mature" drivers are Liberty Insurance and Its4women.ie.
Rachel Doyle of the Professional Insurance Brokers Association (PIBA) says: "There is no real differentiation between under or over 50. The biggest mistake is to fall into the habit of staying with the same insurer year after year."
A recent motor insurance survey by the National Consumer Agency showed that you could save up to €1,300 by shopping around.
Needless to say, this disparity in quotes was for a 20-year-old driver, but the savings for older drivers were still significant: a 50-year-old driver with two penalty points, comprehensive cover ranged from €298 with AIG to €464 with Aviva.
Ms Doyle adds that premiums for over-50s are more likely to be affected by the same factors that affect drivers of all ages, including occupation, endorsements, health, type of car, no claims bonus, license type and penalty points.
For instance, the NCA survey also showed that if you have more than two penalty points, this can make a big difference, even to older drivers.
There was a difference of €205 between the highest and lowest provider for a 50-year-old with six penalty points from Co Cork.
It's also worth noting that only three of the eight insurers offered a quote for this driver compared to the same driver with just two penalty points.
The survey also showed that motor insurance prices for men and women are now equal after the European Union banned price discrimination – something that all industry sources we spoke to confirmed.
On home insurance, according to the National Consumer Agency, you can get a discount if there is someone over-50 living in the house. But why is this?
"An over-50s discount has applied traditionally on the basis that there is a higher chance of the home being occupied for a greater portion of the day, which reduces the likelihood of a claim and, in the event of a claim, the cost or severity of it tends to be less because the issue giving rise to the claim tends to be detected earlier," says Ms Doyle.
Would you automatically be entitled to this? Ms Doyle says that when looking for a quote, the insurer will always ask for a date of birth, which "will automatically pull in the discount, so there's no need to specifically ask for it".
"There may also be a 'moral hazard' reason that a person over 50 would get a discount, that is it's assumed the older you get the more moral you become and the less likely you are to take risks, so moral hazard is mitigated," she adds.
The National Consumer Agency's most recent survey of home insurance found that you could potentially save over €300 on average by shopping around.
But besides shopping around, you should also make sure your policy is not index-linked. Index-linking ensures that the value of the insured sum keeps up with the pace of inflation but, with the economic downturn, you may actually now end up over-insuring your home and contents.
"Index-linking was used to keep the sums insured adequate in times of increasing inflation," says Jonathan Hehir of online home insurance broker Insuremyhouse.ie.
"This is no longer an issue, but we would advise that the sums insured are checked annually to take any new purchases into account."
The chartered surveyors institute provide a handy rebuild costs guide on their website www.scsi.ie.
Ms Doyle says PIBA would not necessarily recommend index-linking on contents "as these will usually depreciate and not rise in value".
Installing a good quality alarm, particularly if it is a monitored one, will qualify you for a home insurance discount, as will two smoke alarms.
Good locks on doors and windows, which usually means five-lever mortised deadlocks, multi-point locking doors and key or button operated window locks, will be looked on favourably by insurers.
"This won't achieve a further discount, but it ensures a wider range of insurers will quote as they all have different lock requirements," adds Ms Doyle.