For the first time since 2011, the cost of comprehensive car insurance has gone up. This increase will affect most drivers, even the ones that haven’t been involved in any accidents or made any changes to their policy.
According to the latest Confused.com insurance price index, produced in association with consultancy firm Towers Watson, the average premiums have increased.
Steve Sanders, finance director at the comparison website, commented: “Our latest figures suggest that these price drops are now levelling out, with premiums actually rising over the last quarter to now stand at £582. Although this is just a marginal quarterly increase of £3, this is the first time premiums have increased since June 2011.”
However, if your insurance renewal has landed on your doormat and it’s higher than last year, you don’t need to accept it.
Here is a guide to the simple steps you can take to cut the cost of your car insurance.
Take the time to learn the basics
Whether you’ve been insuring a car for years or looking to get cover for your very first motor, you should take the time to learn or refresh your existing knowledge about the types of car insurance that are available to you.
Firstly, there are three different types of cover: third party only (TPO), third party, fire and theft (TPFT) and comprehensive.
TPO provides the policyholder with the most basic, and legal minimum, of insurance cover. It is usually the cheapest as it only protects you against claims made by other people after an accident. If you have an accident that isn’t your fault you would need to pursue this with the other driver’s insurance provider.
TPFT offers the same level of assurance as its lesser sibling, plus the added protection of cover if your car is stolen or damaged due to a fire. Typically, this kind of insurance is slightly more expensive than TPO, but this may not always be the case.
Finally, the top level of insurance is comprehensive, which insures you against the same risks as TPFT plus cover for accidental damage to your own car, meaning even if a claim is your fault your insurance company will pay to repair or replace your vehicle.
Once you’ve got you’re head around the basics, you can decide which level of cover suits your needs. For example, if your car is very old or hardly ever used, TPO could be the most appropriate policy, whereas if you travel a lot in a new vehicle, comprehensive is likely to fulfil your requirements.
Just keep in mind that insurance companies quote you with a price based on the information you provide, which means TPO cover may not be the cheapest option for you.
Make your car more secure
Insurance companies look favourably on policyholders that make the effort to keep their car more secure. Storing your vehicle on a driveway or in a private garage could reduce your premiums, as will fitting an approved alarm or immobiliser.
Driving courses
Some insurance companies offer discounts for motorists that have completed advanced driving courses or have taken the Pass Plus. This will be especially relevant to young drivers or those that have just passed their test.
Keep your car simple
Choosing a car that is not expensive to repair and has excellent safety and security ratings will lead to cheaper car insurance premiums. Adding modifications, even something as simple as alloy wheels, can make the cost of cover skyrocket and can lead to insurance companies declining cover in some cases, especially for young drivers.
Accurate mileage
Try to avoid over-estimating your mileage, as this can lead to price increases because an insurance company believes the risk of an accident is higher the more time the car spends on the road. If you’re unsure about how many miles you travel, have a look at your last MOT as they note down the mileage.
Avoid adding extra drivers
In some cases, adding an extra driver can lead to discounted premiums, especially if the person is your partner or spouse. However, this won’t always be the case and it would be wise to get a quote with and without the additional driver.
Pay annually
Although a lump sum payment may seem hard to swallow, it will save you money as insurance companies charge interest to spread the cost over monthly instalments. However, sometimes firms run special offers where they waive the extra costs, so keep your eye out for deals.
Business cover
If you have business cover added to your policy, you may be paying more than you need to. You only need this cover if you travel to more than one destination for your job. For example, if you work for the council and need to travel to different sites, then you do need cover. However, if you work for a call centre and just commute there and back, you do not need it.
Shop around
As an existing customer, it is likely your insurance company is not offering you preferential rates. You should shop around every year to ensure you’re getting the best possible deal.
Posted by Perry Murray