#MyCar2015 - Running for cover: Save a fortune on insurance
Sinead Ryan gives you the low down on getting the best quote
Renewal quote in? Picking yourself off the floor? Sometimes it’s hard to reconcile higher premium increases especially when you haven’t had a crash, picked up extra penalty points or found your car nicked during the year. No – it’s just that your company has decided, for one reason or another, that they simply don’t want your business any more.
It’s certainly hard to understand they might not but this can be precisely the reason you find yourself priced out of the market for exactly the same car with the same driver, as last year. Increases in premiums are expected to rise by 15pc during this year – far higher than the level of inflation for other insurance products. Between different companies premiums can increase by hundreds of euro for exactly the same car.
All insurers work on a pooled ‘book’ system, just like a bookie at the races. Too many bets on one nag and it shortens the odds. Likewise, an insurer who has too many, say, older male drivers, may try to re-balance their business to incorporate more young females, for example. The older man who has been a loyal customer for years finds his premium goes up, while his daughter’s has dropped. It doesn’t seem fair, and sometimes it isn’t, but it does place the onus on the customer not to just sign the renewal notice without shopping around.
In addition, the cost of claims and amounts being awarded in court damages are on the rise, a situation which the Injuries Board was meant to address, but it hasn’t seen much reduction in premiums. In the UK they work largely from set award amounts depending on specific injuries and it gives the market certainty.
Brian McNelis, Director of General Services at the Irish Brokers’ Association says, “Increases are largely due to insurers trying to recoup some of the losses they’ve experienced due to increases in the volume and the costs of claims coupled with fierce competition across the market”.
Certainly companies like RSA and Setanta have had their share of financial difficulty while taxpayers are still paying for the fallout from the demise of Quinn Insurance, which liability has placed a 2pc yearly premium on every single policy, including car insurance until 2037.
Lots of other factors can affect the cost of motor insurance says Geraldine Herbert from www.wheelsforwomen.ie.
“Shopping around is the key to reducing your policy, even if you don’t go with a new provider you can use it as a bargaining tool for your current one.”
Regarding penalty points – two will rarely have an impact but obviously anymore will. Location makes a difference in terms of risk, ie city versus rural areas but what will help reduce this is where you park at night. The safer your car is tucked away the happier your insurance company will be and in some cases can save you 5pc on your car insurance”.
Your occupation can cause hikes in premiums also. If your insurer feels you are using the car to carry products, or in the course of work they may seek to charge you more.
“The main thing is not to be apathetic in your approach”, adds McNelis.
“Motor insurance premiums fall due for renewable on a yearly basis –it is your opportunity to shop around and move to another provider if there’s one on the market, or get a broker who will automatically do this for their clients.
“People often believe they may face penalties if they do not stick with the same provider – this is simply untrue. Loyalty will get you nowhere –and will probably cost you in the long run,” he said.
Top tips for the best price
1. Excess: It can be worth agreeing an excess to reduce your overall premium. But there is no point taking it if it's so big that should you need to make a claim you have to shell out a significant amount of cash before you can.
2. Plan ahead: You can actually impact the amount your premiums are going to cost you for certain insurance products. For example, the variation in cost for some cars and certain engines is huge. So take this into account before you purchase a car.
3. Discounts: Increased competition across the board when it comes to insurance products mean that providers are often willing to provide consumer discounts e.g. bundling your motor policy with your house insurance.
4. Don't over-insure: You will only get back the actual value of the car, as the insurer deems it to be worth. It won't matter that you have a leather pack, sat nav, or a top audio system.
5. Protection: Spending a little extra cash to protect your no-claims bonus is the single best way of cutting costs. It's called 'step back' and allows one or more small claims to be made without hitting your next year's premium.