It sounds crazy but you may be paying €1,000 over the odds for car insurance

With new insurance rules and motor premiums slowly falling, why it pays for you to shop around

New rules on car cover could lead to some people paying more than they have to. Since last week, new regulations require insurers to show last year’s premium on the renewal letters they send out to policy holders. But while these certainly highlight any hikes – they could also have unintended consequences when prices are falling, as they are now.

‘Insurance premiums are falling, albeit slowly for many people,’ pointed out Jonathan Hehir, managing director of Insuremycars.ie.

‘So if a motorist receives his or her renewal letter and sees that the premium they are being quoted today is €50 or even €100 lower than what they paid last year. It’s likely that many will believe that they are getting a good deal and let their cover renew with the same insurer.

‘Just because it’s lower on the renewal form does not mean it’s the lowest premium you could get – so it’s still worth shopping around.’

Drivers will pay hundreds of euros more than they need to for car cover – and up to €1,000 for multi-car families, according to Insuremycars.ie’s analysis for 2019, released this week.

It reveals a variation of anywhere from €100 – €400-plus in the cost of premiums for just one policy.

The motor insurance experts say that half of the 82 per cent of households in the country with one or more cars could be paying through the nose for car insurance with the overpayment multiplied by every car they have.

There are almost 700,000 households with two cars or more. If these drivers were to review their insurance and search for better rates a renewal for each household could be in line for savings of as much as €1,000, according to Mr Hehir.

The online brokers say that thinking there is a ‘Holy Grail’ to finding the one cheapest insurer is a fool’s errand.

This is because each insurer approaches driver ‘risk profiles’ differently, as shown by the figures, and there’s no way a consumer would be able to figure out the rationale behind it.

Mr Hehir explained: ‘Figuring out insurer’s pricing systems is nigh on impossible – some insurers favour older drivers, some favour couples, some diesel, some petrol, while others specialise in higher risk. The only way to ensure you’re getting a good deal would be to get quotes from up to 14 different insurers.’

Insuremycars.ie say that although the latest Consumer Price Index show car insurance costs down by 3.2 per cent over the last 12 months, for many motorists these reductions are not necessarily being felt across the board.

Mr Hehir continued: ‘Motor insurance is one of the most fragmented products out there when it comes to pricing and quotes can vary wildly from person to person, and insurer to insurer. That’s why it’s absolutely imperative that people don’t simply accept the renewal price given by their current insurer. At the very least, motorists should take note of the figures in the CPI report and remember that there are definite savings to be made, especially if they shop the market and speak to experts.

‘Showing loyalty to a specific insurer won’t equate to a reduction in your premium or securing the best deal.’

Insurers have come under fire recently for dual pricing – ie, saving their best deals for new customers. Insuremycars.ie claims brokers can combat the dual-pricing issue for drivers by using standardised software at each renewal, which searches the market for the cheapest new business premium.

Mr Hehir said: ‘At each renewal we put the policyholder’s details through our new business search engine to find the lowest car insurance premium for them for the coming year.

‘If the current insurer offers an inflated renewal price, then we will simply switch cover to an insurer that is offering better value. Our clients would typically be switched across insurers every two to three years.’