Get in gear on car insurance

Financial worries or just looking for better value for money? Consumer champion Fergus Muirhead can help Price of premiums varies vastly so it pays to shop around before renewing your policy

Q

SO MUCH for your recent article about car insurance premiums plummeting. I’ve just received my renewal notice and it went up from £249 to £295. I can get the same cover from another insurer for £194. Why is my existing company seemingly bucking the trend, and why such a big difference between the two insurers? Robert Lee

A

TWO weeks ago, I wrote a piece on these pages suggesting that the average car insurance premium had fallen by £55 in the past three months. The problem with an average figure is that some renewal notices will be above the average and others will be below it, and it looks like you have been unlucky with your renewal where for some reason the premium has increased rather than fallen. Insurance premiums are based on a range of factors. The type of car that you drive, where you live, the job that you do, your driving history, your age and where the car is kept overnight are all factors that could affect the amount that you pay. It’s likely that your existing insurer has had some negative claims experiences in one or more of these areas over the past 12 months and that’s why you have seen your renewal premium increase a fair bit this year.

The good news is that there are lots of other insurers out there looking for your business, and that you have already found another quote that is £100 less expensive than the renewal quote from your existing insurer.

It does pay to shop around these days, and to check the market to make sure that the renewal figures you get from your existing insurers remain competitive. There are plenty of comparison websites out there that allow you to get quotes from lots of different companies when it comes to renewal and you should always check these out before automatically renewing your existing policy

A word of warning before you start to do this. Some insurance policies renew automatically as soon as the old policy expires so you need to make sure that you start to look around in plenty of time so that you don’t discover that the more expensive policy has been automatically renewed at the same time as you have paid for a new, cheaper, policy.

And you also need to make sure that you are comparing apples with apples. Some of these comparison

websites aren’t the easiest to navigate your way round, and will have different elements of the policies you are trying to compare in different places, so make sure you check out all of the important points of the new policy before you sign on the dotted line.

Most insurance policies will have an excess, for example. This is the amount of money that you will have to pay when a claim is settled. There could be a compulsory excess as well as a voluntary excess and you can usually reduce the premium you have to pay by agreeing to increase the voluntary excess, meaning that you will have to pay a larger amount if you make a claim. You need to remember to check these excesses and make sure that they are the same in all of the quotes you are comparing.

There are also likely to be different excesses that apply if you make a claim for a damaged windscreen, and that might be a different figure to the amount you have to pay if you claim for a replacement windscreen.

You may have cover if you break down while you’re on the road, but not if your car won’t start when it’s sitting in your drive in the morning. You might be looking at a quote from one company that covers a breakdown in the UK while another company’s quote looks more expensive but it might cover breakdown all over Europe.

So be careful, make sure the cover that you are comparing is the same in every aspect of the policy.

And always give your insurers accurate information. Insurers share details with each other these days and most of them have access to your previous driving and insurance history. There’s no point in you telling them you have five years’ no claims discount if you really only have two. They will find out and it will increase your premium later on.