With car insurance premiums still rising, is it worth switching?
More consumers switch motor insurance providers than any other type of service — but after a couple of years during which premiums have rocketed for what seems like a variety of reasons, you might reasonably wonder if switching insurers would make much difference this year.
The average cost of car insurance is estimated to have risen by over 70pc since 2013, with some premiums rising at a much higher rate.
So serious is the issue, the Oireachtas Finance Committee published a report into the motor insurance industry last November that accused insurers of engaging in cartel-like behaviour and encouraged more public transparency regarding claims data.
Insurers, on the other hand, have repeatedly blamed rising costs on the presence of uninsured drivers and the high claims payouts awarded by Irish courts.
But it also emerged recently that nearly 1,200 motorists were denied a quote for insurance by three or more insurers in 2015, by far the highest number of refusals on record.
However, broker Jonathan Hehir of Cover in a Click believes that there is a “real possibility” premium rises have peaked, particularly if the re-forming of the Motor Insurance Advisory Board goes ahead (as recommended by the Oireachtas committee) along with legislation or regulation for greater transparency on the cost of claims and the setting up of a register of legal fees collected on personal injury cases.
He also hopes that Irish judges will respond to the anger at the number of significant awards in personal injury cases arising from motor accidents. “Irish Judges may now toughen up after all the criticism this year, and a clampdown on fraudulent claims should impact the cost of cover.”
But while premiums are continuing to rise across the board, is it still worth your while switching?
“It’s more important than ever as insurers are constantly changing their underwriting, so while one insurer may offer you the best deal this year, they could be one of the more expensive next year,” said Hehir.
Having said that, if you are an older, more mature driver with no recent claims or points, you are not as likely to have been hit for premium increases as drivers in other categories over the past three years.
“When a market hardens as it has done, insurers become more conservative and all want the middle-aged, conservative drivers. These have been less impacted by the rising premiums.
“Those outside this group, i.e younger drivers, those without full bonuses or with penalty points, or those with higher performance cars, need to re-price the whole market each year as premium differences could amount to hundreds if not thousands of euro.”
Hehir tells of a 22-year-old driver with 4 years’ experience and 5 penalty points who was being quoted a renewal of €3,250. “We placed it for €1,375.”
“Different insurers have different views on each risk. Some view a person with penalty points as high risk, while others believe that they will have learnt their lesson.”
Ever since Aviva and Allianz announced in 2015 that they wouldn’t insure new customers on cars over 15 years old, many drivers of older cars have reported extortionate rises in premiums.
The three factors that have the biggest influence on the quotes you get are: (a) the number of years you have been claim-free and the type of licence you have, (b) your age and (c) the type and age of the vehicle.
So if you have: recently passed your test, have accumulated five years NCB (no claims bonus), want to add or remove a named driver, or plan to change your car, these are all good reasons to seek out a better deal.
If you and your spouse have your own cars, adding each other as named drivers on your policies will discount premiums on both cars.
“If you’re thinking of changing your car, contact your insurer with details of each model before you make your final decision as there could be a surprisingly large, and apparently illogical, difference in the premiums,” said Hehir.
Other tips include keeping your car safely parked on a driveway or in a garage if you have one, and fitting an alarm. Using the same provider for your house insurance should also result in a discount.
You could choose to take a higher excess. The first part of every claim you pay can range from €250 to €750. The higher the excess, the lower your premium. Of course, if you end up causing minor damage to your car, you’ll have to pay for this yourself.
If you have moved home recently, you might find that your policy will be cheaper depending on where you have moved to.
Companies are happier to allow their agents to discount premiums if you decide to haggle. So a good way to reduce your premium with your current insurer is to shop around, get a cheaper quote and ask them to match it. But if they don’t, then switch.
How to switch ... Car insurance
Get a quote online from a broker like chill.ie, quoteme.ie or coverinaclick. ie, which compares a range of companies. Alternatively, use a broker you know. The amount of detail you are asked to input for a quote can vary a lot, so always check the final price. For this, you might need to call them up.
Call your own company and see can it better the best quote you get. If not, then it’s time to switch.
Although insuring online is easy and convenient, you can also insure over the phone. To switch, you’ll need to complete an application, send on a copy of your driving licence and existing No Claims Bonus letter (which must be given to you by your existing insurer) and payment details.
Potential saving: €1,300 (based on difference in lowest and highest quotes for a 28-year-old nurse in Rathfarnham in a 1.2 VW Polo with full NCB, spouse as named driver)
Total time: 20 mins