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Motor Insurance
1.Shop around
The difference in price between various companies can
be significant. What one company may consider a high
risk factor another company may not view as so
important. Insurance companies arrive at a price for
your car
insurance by adding or discounting money after each
answer you give to the questions they ask you. Each
company has its own rules as to what they consider
should increase or decrease your premium. By shopping
around you get a better list of prices to compare.
2.Buy a lower group car
One of the important factors that insurance companies
take into account is of course your vehicle. There are
thousands of different cars on the road so companies
divide them up into groups. Most companies will adopt
the ABI (Association of British Insurers) group rating.
This splits up vehicles into 20 different groups.
Generally speaking the higher the group rating for your
vehicle, the higher your premium will be. Some
companies may also combine your driving experience with
the vehicle group to get a better idea of how high the
risk is. This is one of the reasons why young drivers
should consider buying a lower group car if they want
to lower their insurance cost.
3.Consider Third Party
Only cover
A Third Party Only insurance policy is the minimum
amount of cover legally required - it is also the
cheapest. Generally speaking you should consider opting
for this type of policy if your vehicle is of low
value. In the unfortunate event of having an accident,
any damage to a third party vehicle will be covered but
any damage to your vehicle is not. However, if your
vehicle is of little value then you may not be too
concerned. It may not be worth paying extra for a Fully
Comprehensive policy in these circumstances.
4.Maintain a good credit
rating
More and more insurance companies are adopting credit
scoring techniques as part of the overall calculation
of your car insurance premium. By keeping a good credit
history you may avoid any additional premium that
companies add to your price for having a bad credit
score.
5.Buy on the web
Many insurance providers now offer some good discounts
for buying the policy over the internet. The theory is
that by purchasing your insurance over the web, you are
saving the company money by not requiring telesales
agent time and incurring free-phone costs. This saving
is passed on to you in the form of a discount for
buying online. If you have got prices by telephone then
check your quote again on their website, you may be
surprised at how much cheaper it is.
6.Have a higher
voluntary excess
During the quotation process you will be asked how much
voluntary excess you want to have. Insurance companies
will generally include a compulsory excess amount on
the policy but give you the opportunity to increase
this if you wish. The more the voluntary excess the
lower your premium should be. However, in the event of
a claim, you will have to pay a higher amount yourself,
up to the total amount of excess on your policy.
7.Reduce your annual mileage
How many miles you do a year is a common question that
can affect your car insurance premium. The more miles
you do the more your premium is likely to be. Quotation
systems and telephone agents will often suggest an
amount of miles for you. Try and work out how many
miles you will genuinely do. It may be less than the
amount suggested. Of course, you should always give an
honest answer to this and other questions.
8.Keep a clean driving
record
This may be easier said than done. However, by having
few or preferably no driving convictions, you can avoid
being penalised by increases in your car insurance
premium. Getting caught with a speeding fine is often
not the only financial penalty you incur. Insurance
companies take very seriously all driving convictions
and it is usually an important part of their rating
process. You can expect an increase in the cost of your
insurance if you do get caught with a driving
conviction, so it pays to be a safe driver.
9.Keep claim free
This ties in neatly with number 8 above. The biggest
factor affecting the cost of your car insurance premium
is how many No Claims Bonus Years you have. Full No
Claims Bonus is generally considered by most companies
to be five years or more, this can give you huge
discounts, in some cases up to 75%. By being a safe
driver and avoiding potential claims, you can
continually benefit by building up your number of claim
free years. Every additional No Claims Bonus year you
get, the lower your car insurance cost should be. Some
companies give you the option of paying a bit more on
your premium to protect your No Claims Bonus.
10.Be realistic about the value of your car
Most of us have an inflated view as to what our car is
worth. When asked the value of your vehicle during the
insurance quotation process, people will often state an
amount that is unrealistic and above the real value of
the car. People do this as they believe that this is
what they will get back from the insurance company in
the event of a claim. The reality is that the company
will only pay out what the car is worth at the time of
the claim and not what you stated for the quote. In
fact, by giving a high and unrealistic value, you can
increase your car insurance premium as this is often a
factor affecting your final price.
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