Last year, average home insurance costs rose 7% and car insurance premiums went up by 9%. But clever consumers can still reduce insurance costs with a little bit of know-how Beat the price hikes with these 10 easy ways to (really) save money on your insurance:
1) Don’t just accept your renewal quote
Insurance companies don’t reward you for your loyalty with lower prices. In fact, they bank on you being busy to go elsewhere. As a result in most cases, you can reduce insurance costs simply by switching to a different company every year.
2) Shop around
Shop around for the best value deal or use an experienced insurance broker to do the hard work for you. Every insurer calculates risk differently, so it really does pay to compare policies from as many insurers as possible. If you don’t have the time to make those calls, use an independent broker to do the leg-work for you as the savings can be substantial.
3) Pay annually
Paying your insurance every month adds interest to your premium that can quickly mount up. Pay the full amount in one go if you can to get the best price.
4) Embrace technology
There’s a host of new technology out there that can help you to save money on your by choosing an insurance product that uses telematics. Also known as ‘pay as you drive’ this is a bit of kit installed in your car that records the way you drive, when and where. Safe driving at less risky times of day is rewarded with lower premiums. But beware, it can also record you speeding or driving erratically. And that can increase your premiums too.
There’s a similar use of technology to reduce the costs of buildings and contents insurance too. If your home is kitted out with smart devices, that let you monitor what’s happening when you’re away from the property, you could bag yourself some savings. The idea is that a connected home can alert you to things like a leak or an intruder. That means you can take action to limit the damage sooner, which can mean lower claims. And that means lower premiums.
5) Build a strong credit rating
Insurers look at your credit rating when they prepare your quote. If you have a low score, it’s likely that your premiums will be higher. That means it’s worth doing what you can to improve your credit rating. Remember that you don’t have to have had a debt or missed payments to have a low score. Your credit rating is based on your record of paying things like a mortgage or credit card. If you’ve never held a credit card or mortgage, there’s less evidence that you can manage payment well. That means you’ll automatically have a lower score.
Insurers look at your credit rating when they prepare your quote. If you have a low score, it’s likely that your premiums will be higher. That means it’s worth doing what you can to improve your credit rating. Remember that you don’t have to have had a debt or missed payments to have a low score. Your credit rating is based on your record of paying things like a mortgage or credit card. If you’ve never held a credit card or mortgage, there’s less evidence that you can manage payment well. That means you’ll automatically have a lower score.
6) Opt for limited mileage
Opt for limited mileage on your car insurance. If you drive less than the average 10,000 miles a year, tell your insurer. Capped mileage options, where you confirm you’ll only drive a limited number of miles, can effectively reduce insurance costs. That’s because if you drive less, you have less risk of being in an accident and making a claim. Beware though. Really low mileage may indicate you’re a riskier driver (as you have less experience on the road) and actually increase premiums. And if you go over the mileage limits you set, you could invalidate your insurance too.
7) Third party insurance is not always the cheapest option
If you’re keen to cut costs on your car insurance, you could be forgiven for thinking that a third-party policy will be cheaper than a fully comprehensive one. But that’s not always the case. That’s because some insurance companies consider opting for third-party cover only a riskier action. And if you’re considered a risk taker, your insurance premiums are increased.
8) Keep your car in a garage
A car safely locked in a garage will be cheaper to insure because there is less risk of it being stolen. The same is not always true of a car on a driveway compared to a car parked in the street though. That’s because insurance companies will look at data of where cars have been stolen from in your area. If more cars have been stolen from driveways than from the street, it will make it more expensive to insure your car to be parked on your driveway than in the street outside your house.
9) Remember that increasing your excess may cost you big in the long run
The Times reports that increasing your excess may only reduce insurance costs by a few pounds or make no difference. But if you do need to make a claim, you’ll be faced with a much bigger bill. Ask your insurance broker to check how much you stand to save by increasing the excess. And carefully consider if this saving is really worth it.
10) Don’t forget your EHIC
If you’re travelling to Europe, don’t forget to take your European Health Insurance Card (EHIC). It’s not an alternative to travel insurance as it won’t cover private medical costs or repatriation to the UK. But it could still save you money. That’s because many travel insurance companies will waive your excess if you have one of these cards.
For great value insurance tailored to your needs
Do you want to save money on your insurance without compromising on your cover? Let the experts at Park Insurance shop around to find you the best price on quality insurance. We’re an independent, family-run business with preferred broker status with some of the UK’s biggest insurance companies. That means we’re not tied to any one company but can use our buying power to negotiate extra good value deals on your behalf. Call us on 0117 955 6835 or get a quote.