Posted on November - 30 - 2010
How to beat higher car insurance renewal quotes
WITH car insurance premiums having soared this year, you may find your renewal higher than you might expect when it lands on your doormat.
According to the AA British Insurance Premium Index, which tracks trends in the industry, the average cost of a policy rose by 11 per cent for the quarter ending June 30. This is the biggest increase the motoring organisation has seen since it began tracking the market 16 years ago.
Why are premiums rising?
There are a number of reasons why insurance premiums have gone up this year, as AA Director Simon Douglas explains: “Although the number of accidents on Britain’s roads has thankfully been falling, the cost of repairing cars has been rising at a rate of between 7 and 10 per cent.
“Added to that, the number and value of personal injury claims being made following car accidents have been rising. Many people who may not have bothered to make a claim for minor or even non-existent injuries in past accidents are being encouraged to do so by unscrupulous accident injury claim lawyers.”
He added: “Ultimately, all of this fuels the cost of insurance, as the Index dramatically illustrates”
What can I do?
- Shop around: Often, insurers offer their best prices to new customers, to draw in as many new drivers as possible. What this means is that it doesn’t necessarily pay to stay loyal to one broker. You should at least do your homework by visiting on of the price-comparison websites – Compare The Market and MoneySupermarket are good places to start. Always remember that it won’t be a comprehensive view of the market though, as some insurers (like Direct Line) aren’t on price-comparison sites.
- Use your car less: When you apply for insurance you are asked for an estimate of your annual mileage – the more miles you cover, the more the insurer perceives you are at risk. It makes sense then to avoid using your car where possible. Car-sharing with someone you work with could half your work-related mileage.
- Add your dad: Adding a more experienced driver to your policy could lower the cost of your premium, especially if you are a new driver. This person should only ever be a ‘named driver’ though, because if you are the main driver and you claim that they are, you might find the insurer refusing to pay out in the event of a claim. This practice is known as fronting and is illegal.
- Up your excess: Increasing the excess you pay in the event of a claim can lower your premiums considerably. Volunteering to pay higher excess than you do currently is a way to reduce the premium, but only if you can genuinely afford that amount in the event of an accident.
- Trade down: Cheaper cars with smaller engines tend to attract smaller premiums, so you might consider trading down to a more economical car. This might also save you money on fuel and parts, in the long-run.
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