Early last year (March 2007), Guardian Money reported that a number of popular motor insurers were planning to raise their premium rates. If you insured your car with Norwich Union, Admiral, Quinn or the AA, you were likely to see a premium increase in 2007, with the best deals predicted to be found at More Than, Zurich, Swiftcover or the RAC.
Whilst Norwich Union announced an average premium increase of 16% which was expected to materialize in 2007, figures from the AA’s insurance index reveal that the average premium hike last year was actually 5.9% for a comprehensive policy with online shoppers paying 33% less than the average.
The reason for the false alarm appears to be a combination of increased competition from online insurers such as Swiftcover and wider access to comparison shopping tools like Moneysupermarket and Gocompare.
Take back control of your car insurance costs in 2008
As the figures for 2007 show, increased competition and availability of more powerful shopping tools appear to have dampened the predicted premium rises last year. But an hour or two of savvy shopping coupled with an understanding of how insurers acquire and retain their customers can still save you money in 2008.
For example, if you’re like many drivers, your insurer probably expects you to renew your policy through sheer inertia, especially if they don’t raise your premium too steeply. A steady series of smaller premium increases at renewal time can go unnoticed whilst you remain unaware of better deals. Many policyholders assume that the great deal they got first time around means they’ll continue to get value for money with the same company.
In fact it’s common practice for insurers to offer attractive discounts to get you as a customer then increase your premiums when you renew, keeping the best deals to attract new business. With competition as high as ever, insurers are constantly trying to increase their market share with some using questionable methods to increase the chances of you renewing with them. One of these is to delay the issue of your renewal notice until a week or less before your renewal date, leaving you little time to do your homework and find better deals.
To counter this it's essential that you take back control of your car insurance premiums by shopping around at least two weeks before your renewal date and compare as much of the market as possible. Whilst this might sound like hard work, just spending an hour online using two or more of the price comparison sites like Confused and Tesco Compare can do much of the work for you. Alternatively, get a quote from your existing insurer’s website as a new customer and if it’s significantly lower than what you’re paying now, call them to negotiate a discount.
Call in the Specialists
Another way to lower your premiums at renewal time is to consider specialist cover. There are a number of brands that target customers in specific classes – young drivers, women drivers and drivers who own classic or modified cars are just a few examples. By targeting one specific market segment, these specialist insurers can focus on providing cover that these markets value, and put all their risk into one basket, which they can then reinsure. That allows them to offer lower prices on specialist insurance than the general insurers.
PLEASE NOTE: The guidance published in this article is for information only and does not constitute financial advice or a recommendation of any particular car insurance product or company. If you are in any doubt please consult an independent insurance adviser. A database of advisers in your area is available at www.unbiased.co.uk
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