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.

How Much Is Car Insurance?

The answer’s simple – as expensive as you want to make it because you are the one of the key factors in deciding the cost of the premium for the insurance company.

Your attitude towards your car

If you have modest means but need to put a car on the road, you probably look for a bargain and insure the car for third party only, the cheapest form of insurance.

This is because you know the car is worth nothing and if you have an accident or it’s stolen, you are better off putting your cash in to a replacement rather than sending good money after bad.

Basic insurance cover keeps you legal and means you can tax and MoT the car, and as long as you can get from A to B for the least cash possible, that’s fine with you.

Other drivers with shiny, expensive cars like to keep their vehicles in pristine condition and have no intention of scrapping them if they have an accident because the cost of repairs is far outweighed by the value of the car.

These drivers tend to go for comprehensive cover with lots of bells and whistles, because they don’t want any hassle if they have an accident, they just want the insurance company to send them a courtesy car and send their car back when it’s repaired.

The way you drive your car

If you have lots of penalty points on your licence and a long claims history with car insurance companies, your car insurance premium is going to be loaded because the insurer perceives you as more of a risk than a more careful driver with a maximum no claims discount and no penalty points.

How you shop for insurance

Another reason why drivers tend to pay too much for their insurance is complacency when renewal time comes round every year.

Too many accept the quote from their existing insurer without investigating whether they can find a better deal elsewhere, like an insurance comparison site like ours.

All you need to do is key in a few basic details about yourself, your car and your driving history and we’ll come up with some car insurance options for you to compare – including the policy features and benefits.
Insurance companies are in a competitive market and some may offer incentives to switch to their company.

You don’t have to be what you drive

You don’t have to accept what a car insurance company puts in front of you. You can bite back by changing your attitude towards insurance and not just sit back and take what’s offered.
Look at ways to reduce your insurance costs.

Question the add-ons on your policy

Do you really need a courtesy car – would it be cheaper to pay an extra premium on a relative’s car for a couple of weeks?

What about a voluntary excess? This reduces the insurer’s risk and drives the cost of your policy down.

All these little savings add up in to a reasonable slice off your insurance.

How Being Married Equals Lower Car Insurance Costs

The thinking in the insurance industry is that if you are married you are likely to be more responsible than you were when you were single.

This means married people are considered less of a risk – and from that follows the car insurer’s conclusion that you deserve a lower premium.

Somehow, this all goes wrong when you live with someone.

If you and a partner live together as a normal, loving couple with all the benefits of marriage without the actual status, then you are still single, so you are insured as a single driver in a higher risk category.

Stop a minute before you rush out and buy a ring and propose – yes single and married people do have a cost differential on their car insurance premiums, but sometimes it’s only a few pounds and not a drastic reduction.

If you get married, be sure to call both your insurance companies if you and your partner are drivers and ask for a requote on your policy. Not all insurance companies will alter your premium, but it’s worth the try.
You and your spouse have other car insurance benefits once you are married:

• If you have a maximum no claims discount and decide to stop driving, you can switch the bonus to your spouse so they can benefit.
• If you have business use on your policy and cannot drive the car, then your spouse can have the cover as well
• You may also benefit from increased death and injury cover with some insurers

Don’t forget if you do marry, this could change your risk address as well, which is a change in circumstances you should notify your insurance company about.

The ‘risk address’ is the place where your car is parked overnight for most of the year. If you marry, it may well be that if you have not lived with your partner that one of you is changing your risk address.

The postcode of this address is one of the main factors in calculating your premium, because the crime rate for theft and vandalism in that area weigh high on the factors an insurance company considers when working out what you should pay.

Often when you marry, as a couple you will have two cars. You need to consider arranging the cheapest insurance for both of you – whether this is through one company or separate policies.

You can compare car insurance premiums, policy features and benefits by using a car insurance comparison service.

Wedded bliss doesn’t always reduce your insurance premium.

If you or your new partner had poor driving histories prior to the day you tied the knot, the fact you are married will not bring down your insurance costs overnight.

However, if you both start driving more responsibly and don’t add any more penalty points to your licences or claims, over time you will build a better driving history and a no claims discount that could help cut the costs of your car insurance.

How much does car insurance cost?

Car insurance prices vary from person to person and from provider to provider. This is one reason for the huge growth in comparison websites. Providing a user with the ability to search multiple insurance companies has given the customer the ability to make an informed decision.

That said, it is also useful to understand what factors are used to assess the risk and therefore determine the cost of car insurance.

What decides car insurance costs?

There are several factors used by insurance companies in determining your car insurance premiums. It should also be said that each insurer has its own formula and applies these factors in different ways. Hence you will often get a higher quote from a one insurance company against another.

These factors include:

• Your age, gender and location;
• Your driving history;
• The replacement cost of the car;
• How much driving you do each year;
• If the car is parked off road or in a garage;
• Whether the car has security devices fitted;
• If the car has been modified.

How can I influence these factors and reduce costs?

There are certain things that you can do to reduce your car insurance premiums. These include:

• Having an alarm or immobiliser fitted;
• If possible, parking the car off road or in a garage;
• Providing the correct replacement value of the car – This will reduce each year so make sure this is reflected when you get your quotes.

Summary

There are several factors that are used to decide what your insurance premium is. Some you will have influence over, others you will not. By trying to reduce the risk your pose to an insurer, the less you will pay for your insurance.

Five Easy Ways to Save Money on Your Car Insurance

Car insurance is a major expense for many drivers, and reports show that we can expect costs to get worse before they get better. A survey by Sainsbury’s Bank indicates that the average cost of car insurance for UK drivers is now £514.38 – a rise of 5.8% on 2007, and the first time the average has broken the £500 since the measure was first recorded in 2005.

However, there are things to do to help keep your car premiums low. Here’s five tips to help you on your way:

1. Be a woman.

Admittedly, this one’s probably out of your hands – but if you do happen to be of the feminine persuasion, you can expect to pay much less for your car insurance. The Sainsbury’s survey also indicated that men pay £540.49 on average, compared with £470.47 for women. Similar circumstances that will probably drive down your premiums include being older than 25, but below retirement age. If you fall into any of these categories, look for specialist insurance providers that might be able to give you a better deal.

2. Buy online.

Several of the larger insurance providers offer considerable discounts for ordering your insurance online – often as much as 10% (or, speaking from the averages, a cool £50). Given that a great many people choose to look online for their insurance package anyway, you could save money by doing almost nothing.

3. Cut out the middleman.

There’s a glut of price comparison services on the internet these days and, while it’s technically possible to get a bargain by comparing a multitude of different providers at once, it’s important to remember that these middlemen have to make their money from somewhere – and that somewhere is you. By going direct, you can usually save yourself a packet. It’s a little more work, but it’s often worth it.

4. Look for bonuses.

While some policies may cost more, you might find that the additional features you get may make it worthwhile. Take no claims bonuses, for example – if your policy allows you to carry over a no claims bonus from a previous insurer, you may save considerably more money in the next year of your policy (should you decide to stick with the provider and, obviously, don’t make a claim). However, these often work off a ‘what if?’ sense of logic, requiring you to gamble a fixed discount today in order to save more in the future.

5. Switch providers.

There’s nothing to say you have to stick with your current provider if you can find a better deal elsewhere. In fact, given that most introductory offers designed to reel in new customers expire after a year, you could well be better off making a move to a new provider; not only do you avoid a price jump as your own introductory offers run out, but you can likely profit from new offers by switching services. Of course, you might lose accumulated bonuses (including no claims discounts, for example), but it’s entirely possible that you’ll still come out on top.

Getting a good deal on your car insurance

Getting a good deal on your car insurance is about getting the cover you want for the lowest premiums available. It is about value for money, therefore, rather than a quest for the cheapest cover on the market. The latter could simply result in your arranging cover that is inadequate for your needs and fails to deliver what you had expected of it when the worst comes to the worst and a claim needs to be made.

Getting a good deal on your car insurance, therefore, is about knowing what cover you need and the considerations that will affect the price of the premiums you pay.

One of your first decisions, therefore, is likely to concern the level of insurance cover. The three general levels of cover available in the UK are the familiar: third party only; third party, fire and theft; and comprehensive cover. Since each level requires the insurer to take on a progressively wider range of risks, the premium for doing so also increases. Comprehensive cover, thus, costs more than cover against third party claims only (and cover against third party claims, of course, is the minimum level of cover required by law).

Any insurance is about assessing risk and in the case of motor insurance it is a case of assessing the risk of your causing or being involved in an accident which causes loss, damage or injury to you, any passengers in your car and third parties. In order to asses this risk, insurers have developed profiles of groups according to their level of risk and will therefore want to know your own sex, age, occupation and where you live. Similarly, if you have been involved in accidents in the past, the insurance company is likely to make the assessment that your chances of having an accident in the future are higher than normal. One way of increasing the chances of your getting a good deal on your car insurance, therefore, is to drive carefully to avoid such incidents as far as possible.

The opportunity for getting a good deal – paying less for the same level of cover – is also likely to increase if the car you choose to drive is in a low insurance category. These categories represent insurers’ broad ranking of cars according to their value, cost of repair, and performance. The “lower” the category, the less you should expect to pay for the insurance. By the same token, however, modifications to a car that are designed to enhance its performance or increase its overall value are likely to attract loadings that increase the cost of the insurance premiums.

Getting a good deal on your car insurance can also be a question of being prepared to assume more of the risk yourself. Most motor policies will have a “compulsory excess” – the first part of any claim that the policy holder him or herself must pay – but it is also generally possible to accept a further, “voluntary excess”, increasing the total amount of the excess.

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