Exhaust every new avenue chasing car insurance
With car insurance premiums continuing to rise, we report on ways you can reduce costs
Car insurance is one of the fastest rising costs for many families. Drivers are bewildered by excessive premium hikes when they haven't had a claim and don't understand the reasons for the hefty renewal notice dropping through their letterboxes. Premiums were up 12pc during 2014, according to the Central Statistics Office, while increases of up to 15pc are mooted for this year.
While you may be claims-free, others are not, and many companies have experienced poor results over the last few years, citing more cars on the road since the upswing in the economy, a higher incident of accidents and more people prepared to go to court as their first port of call. The State's Injuries Board was set up primarily to avoid this, but it hasn't worked, leading to an increased level of payouts in number and amount.
Difficulties at RSA, Quinn Insurance and Setanta all added to the uncertainty in the market and, indeed, Irish people will continue to be clobbered by the addition of 2pc - the so-called "Quinn Levy" on all non-life policies until 2037, including motor insurance, to pay for the fated insurer's debts.
The shock of receiving the renewal notice is often a good a catalyst as any to switch provider. There is no loyalty any more when it comes to motor insurance. There was a time when the 'no claims bonus' was dependent on staying with the same provider; those days are long past and your NCB travels with you, as you shop around.
The first mistake many people make is to assume that all insurance companies want their business. This is not the case. Like a high-class bookmaker, insurers run a 'book' per class of insured eg. young females, older males, high-powered sports vehicles, commercial vans etc. Each of these categories can have its own claims record and you, adding to one of them, may not be appreciated, so you get priced out of the market through no fault of your own.
Happily, for another company down the road, you may be just the profile of customer they're looking for to balance their 'book'.
See the table for a case in point: students on a learner permit are definitely one of the most expensive classes to insure. However the difference in premium for exactly the same cover is staggering €1,661 - between a cursory look at the cheapest to most expensive. Even safe, middle-aged drivers can save hundreds every year just by taking the time to shop around.
The company that loved you last year may simply not want you on their books this year. It's nothing personal. Switching, annually, is definitely worthwhile. Jonathan Hehir, managing director of www.coverinaclick.ie says the top three factors affecting price are (a) driving experience - your years claim-free and type of licence; (b) driver's age and (c) the type/age of the vehicle.
Customers can help themselves and keep costs low by regularly switching insurer. "Take the time to ring up to five providers, or get a broker to do the leg work," says Hehir. "Don't be afraid to move company as plenty are looking to get claim-free clients."
For some, there's an even bigger incentive to do so. If you've recently passed your test, are now five years claim-free or want to add or remove a named driver, you've moved home or have recently changed car, are all reasons to switch for a better deal.
Ways you can continue to keep costs low, apart from staying claim and penalty point free, include keeping your car safely parked - if you have a garage, use it. If you don't have an alarm, get one fitted. If you have a spouse, who also has their own car, get cross insured - it saves money rather than adds to the premium.
There are discounts depending on where you live, being over 50 in some cases and choosing a higher excess - the first amount of any claim you pay - although do this with due regard to the risk involved.
www.consumerhelp.ie for a guide to switching car insurance
www.iba.ie for a list of motor insurance brokers
How to switch your car insurance
* Be conservative with your car's value as you can only claim what it is deemed to be worth by the company's assessor.
* You must give notice in writing to your current provider to cancel and some may charge a penalty fee for doing so.
* Never cancel a policy without having a new one in place. Driving uninsured is an offence.
* If you have penalty points, disclose them to a prospective insurer.
* Always call a number of insurers or use a broker to shop around.
* If you are paying by direct debit, cancel it.
* Ask for a copy of your No Claims Discount Cert before you switch provider - they'll need evidence of it along with your current driving licence.
1 Compare rates from insurance providers or use a comparison website or broker. Ensure you are comparing like with like e.g. excess, step back discounts, roadside assistance etc.
2 Although you can switch at any time, your renewal date is the most convenient as you have a 14-day cooling off period from receipt of that notice.
3 Complete application for new insurer, informing them of start from a particular time on a particular day. Inform your old company to remove you one hour later.
4 Receive your new insurance disc and keep confirmation of insurance email/letter in your car in case you are challenged by gardai.