Re-Insurance

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The cost of insurance is no laughing matter so Living North has attempted to provide a remedy by compiling some cost-effective tips to help take the sting out of the whole process
‘A tiny glimmer of hope lies in the news that car insurance premiums are starting to come back down. Granted the falls don’t yet make up for what has been a steep hike over the last few years, and the car insurance market itself remains a minefield’

Motorists have a lot to moan about: spiraling petrol prices, road tax, pot holes and MOT failures caused by faulty dashboard lights. Insurance is yet another niggling (yet necessary) nuisance to add to an already depressing list. In recent years premiums have ballooned, a trend blamed on American-style compensation culture. A substantial increase in claims relating to smaller injuries like whiplash, costs of which add an estimated £90 to every motor premium, has seen insurers pump up their prices in a bid to stay profitable. Strange really considering the NHS spends around £8m a year treating genuine whiplash, while insurers are paying out a staggering £2 billion in compensation. It’s led to the Association of British Insurers call for anyone making a whiplash claim to be assessed by independently-appointed experts to help curb the flow.

A tiny glimmer of hope lies in the news that car insurance premiums are starting to come back down. Granted the falls don’t yet make up for what has been a steep hike over the last fews years, and the car insurance market itself remains a minefield, we attempt to improve visibility and offer some helpful advice to keep on top of the cost.

Choose Wisely
Before you rush out to order the new Porsche 911 GT3, a quick check on it’s insurance rating could save you significant money. You can do this at thatcham.org. It’s not something I imagine Steve McQueen ever concerned himself with but it pays to be forewarned. Insurers group vehicles into 50 different categories based on numerous factors such as engine size and the likely cost of repairs, as you’d expect, newer and faster cars attract pricier policies.

Don’t Go the Extra Mile
If you commute on a busy motorway each day you’re statistically more likely to be involved in a road traffic accident than say someone who only drives on local roads at the weekend.  Lower mileage normally means lower cost, most comparison sites have mileage calculators to help you work out how many miles you drive each year which is important because if the figures aren’t accurate you could find your policy is invalid should you need to claim.

Don’t Go the Extra Mile
Insurethebox are a black box insurance company that offer a new approach to car insurance that is proving welcome relief for younger drivers and those with lower annual milage figures. The concept is simple, a telematics device (slightly bigger than a mobile phone) is fitted to the car, recording how you drive and how many miles you cover in the car. When you take out a policy with insurethebox you state the number of miles you expect to drive in a year and the box monitors exactly how many you clock up. Should you need additional miles you can buy ‘Top Ups’ in bundles of 250, 500, 1,000 or 2,000 miles. Amazingly the box also records how you drive and feeds this information into a personalised web page. Here you can earn ‘bonus miles’ by improving your driving. For more details visit insurethebox.com

Points Mean Prices
Drive with care. Insurance companies are likely to add a loading onto a premium if a driver has points on their licence so don’t do a Chris Huhne – stay within the rules of the road. If you have a serious motoring offence to your name you could find it hard to get cover at all.

Take Excessive Action
Excess is the total amount you will pay towards a claim, but make sure you read the small print before setting up a policy. Excess is made up of voluntary and compulsory amounts. The voluntary amount is the pre-set the figure you agree to pay towards a claim, while the compulsory amount is the pre-set amount the insurers insist you pay. For example, if your voluntary excess is £150 and your compulsory amount is £150, you will pay the first £300 towards a claim. While you have no control over the compulsory amount, selecting an increased voluntary amount will normally be reflected by a lower premium.

Refraining From Claiming 
Drivers who don’t claim are rewarded with a no-claims discount (NCD). This can be valuable, knocking over 50% off a premium once you’ve gone five consecutive claim-free years. Once you’ve achieved the holy grail of five years bonus, you can pay extra to protect the hard-earned NCD, meaning in the event that you do need to claim, you won’t lose the bonus. If you have a minor accident, it can workout cheaper to pay for the repairs yourself and not risk your NCD at all.

Take Cover
There are three types of motor insurance: comprehensive, third party and third party fire and theft. All motorists must have at least third party cover in place as a basic legal requirement when driving on a UK road. It covers the policy holder for injury and damage to another person or their property. Third party fire and theft includes cover for your car in the event of loss or damage as a result of fire or a theft. Fully comprehensive cover allows you to claim for damage to your own vehicle if you are involved in an accident. Consider the value of the vehicle in relation to the excess when selecting cover. For example, if you are insuring a younger driver for a car worth £750, a third party fire and theft policy is probably more cost-effective as you’ll pay a far lower annual premium. Taking out comprehensive cover on a low value vehicle is often pointless as, in the event of a claim, you’re likely to have spent more paying the premium and excess than if you paid for the repairs in full yourself.

Compare Costs
Online aggregator websites like Money Supermarket, Compare the Market, Confused and and Go Compare can offer discounted car insurance as online applications are cheaper to process. Not all insurers prices are checked by these sites however, Aviva and Direct Line are two examples of national companies who don’t use them, along with smaller local insurers who may be able to offer you a better price. It pays to shop around before renewing with your existing insurer.

Skills to Pay the Bills
Courses like the Pass Plus can reduce premiums by up to 35 percent, most driving schools offer it and, though it’s not free, younger drivers and newly qualified drivers should consider it. Similarly, the Institute of Advanced Motorists, iam.org.uk, run driving courses to boost driving skills to try and help reduce the statistical likelihood of an accident. Like the Pass Plus, these courses will cover various aspects of motoring such as night and motorway driving.

Published in: December 2013

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