How much do you pay for car insurance?

Far too much is the quick answer – mainly because most people are just too lazy to put in some legwork to save themselves some money.

The main culprits are those people who simply renew their policy with the same insurer year after year without checking around to see if there is a better deal.

You can compare motor insurance premiums as well as policy features and benefits easily by using our service.

You will find out what you can pay rather than what you are being charged because car insurance is a competitive market and insurers are falling over themselves to get your business.

So how do car insurers work out their premiums?

Basically, underwriting a motor insurance policy is a risk assessment. The insurer takes three main factors in to account:

1. Your claims history as a driver
2. The type of car you drive and the car’s value
3. The risk address – this is the place where the car is parked overnight and not necessarily your home

The insurer’s aim is to charge enough in premiums from their pool of customers so they can pay out for any claims made by drivers they insure – and don’t forget you are also shelling out for their administration costs, plush offices and profits as well.

If you are a youngster with a poor claims history driving a sports car and living in an area with a high crime rate, your risk is high, so your premium will reflect this.

If you are middle-aged with a maximum no claims discount, drive a standard family car and live in a low crime country area, your premium will be much reduced compared with our other driver.

You can reduce the cost of your car insurance in several ways:

• By taking out lesser cover that is cheaper – like third party fire and theft rather than fully comprehensive insurance or paying for a couple of week’s cover on a friend or relative’s car instead of adding a courtesy car in to your policy
• By paying a voluntary excess that reduces the insurers risk and allows the premium to be adjusted downwards
• By comparing products and premiums with a price comparison service
• By changing your car to a less powerful and less expensive model
• By upping the security on your car by adding an alarm, immobiliser or a GPS unit so the car can be tracked if stolen
• By reducing your annual mileage – the fewer miles you travel the less you present yourself as a risk to the insurer.

In the long-term, just paying more attention and becoming a safer driver who makes no claims will earn you a big no claims discount that will considerably reduce your insurance costs.

So if you think you are paying too much for car insurance, don’t just send that renewal form back next time – take some action to bring the costs down because if you don’t help yourself, no one else will.