Saving on Car Insurance

Vehicle Insurance is obviously not an ‘optional extra’. Apart from the fact that you will be exposing yourself to huge liability claims if you drive without insurance it is also illegal to drive anywhere on a public road in the UK without your vehicle being properly insured. Since you cannot avoid having to pay for insurance it would make a lot of sense to do everything in your power to make sure that your premiums are as low as possible.
The worst way to achieve insurance savings is to ‘underinsure’ your vehicle by taking out inadequate cover.

Another common ‘saving’ that can turn out to be very costly is to accept a ‘lowball’ quote from an obscure company that might not be able to honour the insurance contract that they have with you. The best ways to save, on the other hand, all have to do with doing a bit of homework to ensure that you are assessed as ‘low risk’ by insurance companies. This will of course translate into significant savings on premiums.

Before we look at specific examples of how you can improve your risk profile, it is worth mentioning that you should always ‘shop around’ a bit before accepting an insurance quote. This may seem like a lot of hard work, but there are currently many services around that will submit your profile to a large number of insurers in exchange for a ‘finder’s fee’ (paid by the insurer, not you). Making use of such a service can be a very effective way of slashing your insurance costs.

There are some aspects of premium pricing that will be very difficult to change, short of growing older and changing your car! This is because younger drivers face higher premiums as do very powerful ‘supercars’. The story does not end there however. There are several kinds of discounts available to those who are perceived to be lower risk drivers. Be sure to mention the following when you apply for a quote:

• The length of your ‘no claims bonus’ – If you did not make a claim in the recent past insurers will automatically place you in a lower risk category.
• The ways in which you will use your car – ‘Social use’ (i.e. not using the car to drive to work) will normally lead to lower premiums.
• Membership of professional organisations – Some insurers will offer you a discount if you are a member of a respected professional organisation.
• Your age – Some insurers will lower their premiums once a driver reach age 55, only to raise it again when he/she reach an advanced age. You should therefore be sure to make the best of your ‘golden premium years’!
• Safety features – The installation of advanced safety features could lead to lower premiums.

Some other ways to lower your insurance costs are the following:

Apply for combined cover. Insuring more than one vehicle with an insurance company could lead to lower average premiums on both (or all) of the insured vehicles.

Elect to pay a higher excess. If you offer to pay a higher level of excess in case of a claim it means that you assume more risk yourself, leading to a lower monthly premium.

Choose the right level of cover. For a new vehicle it makes perfect sense to take out comprehensive insurance as replacement costs will be very high. If you drive an older car it might be worth it to just take out insurance for ‘Third Party, Fire and Theft’.

Summary:

• It is illegal to drive without insurance in the UK. Insurance premiums are therefore an unavoidable expense.
• It pays to ‘shop around’ for the best insurance quote.
• If you can somehow prove that you are a ‘low risk’ customer your premiums will be lowered.
• Some other ways in which savings can be made are applying for combined cover and electing to pay a higher excess.