With insurance being a big expense for most people, it pays to know some of the insider tips for saving money — getting cheaper insurance whilst keeping the best cover for your situation. Here we’ve collected the first 10 ways that can help cut your outgoings:
1.Voluntary Excess
Most policies have a standard excess – the bit you have to pay if you make a claim. By increasing this you will reduce your premium, but get less money if you make a successful claim. You probably wouldn’t claim for a £200 repair, so you probably shouldn’t pay for cover that will pay out for that level of claim too.
2.No Claims Bonus
Get it, protect it and shop it round. You earn no claims bonus (NCB) by not making claims and it generally goes year to year. Different policies offer different discounts for the same level of NCB. Make sure you get documented evidence of NCB if switching providers and trying to transfer your NCB, you may run into problems if you have a claim and can’t prove you really had 5 years NCB when you started. And whilst it will actually add a few quid onto the cost – it’s worth paying for protected no claims bonus if the policy offers it – it’s basically insurance for your NCB so if someone bashes you, you won’t lose your bonus advantage (and when you consider NCB discounts can take 50% off the price…)
3.Check the Extras
Loads of policies these days come with extra bonuses like breakdown cover, legal assistance and so on. You might already have this kind of cover elsewhere (and sometimes obscure too – even some bank accounts come with insurance cover options for things like travel, albeit not brilliant sometimes). You might be able to take a few out and knock the price down. Or, if you’re a cabbie, you may want to include extras on your taxi insurance policy — liability and GAP cover spring to mind and may be cheaper when bought together.
4.Shop Around
It might seem obvious, but often we don’t bother. It can be a pain to go through loads of websites to get new quotes (unless you use Quotiva!) but it can be worth it. There’s a lot of discussion in the insurance world about the practice of discounting for new customers with what’s called “introductory discount” – it’s got so competitive that insurers are (for now) being forced to “buy” your business, making a loss initially in the hope that you’ll stay. That will end one day (it has to) but for now it works to your advantage.
5.When you decrease the risk of your business, tell the broker!
Some, not all, policies allow for “mid term adjustments” – that means they can change the price half way through if something about your risk changes. Whilst it’s obvious to most people that upgrading from a Punto to a Porsche will affect premiums, it’s sometimes less obvious that upgrading your security device might take another percentage point off. And if you have “special items” listed on your home insurance, make sure they’re up to date and you’re not still paying an extra premium for the Nikon D70 that’s since been replaced with the listed D200.
6.Don’t pay monthly if you can avoid it
If you pay monthly, you’ll have to pay a financing charge – the insurer’s getting their money and selling you a loan to cover the cost basically. The terms might not be that great, so you could pay a lot. If you want to pay monthly, then be smart and see if you can get a loan from somewhere else that costs less than the financing offered by the insurance company and use that instead.
7.Ask what difference security makes
Can you get an extra 10% off a £700 premium by investing in a £35 security device? If so – it’s a no brainer! Adding a hitch-lock or wheel clamp to your tourer can make a big difference to your caravan insurance premium.
8.Think like an insurer
An insurance company is basically making a bet that you’ll cost them less than they can collect from you. It might seem a bit mysterious, but basically they’re going to think about everything you tell them and make up a price. If they think you’re risky, you’re going to pay more.
So – think about all the stuff that makes you less risky – some of it might mean discounts. For example – if you’re insuring a classic car and you’re in a car club, you’re probably going to be less risky because you clearly take pride in your vehicle and aren’t going to go out of your way to put it in danger.
9.Combined cover
Some policies these days combine different types of cover together. Employers liability and public liability are often bundled together. High net worth policies give you a kind of blanket cover for your home, car, boat etc. Fleet cover is for multiple vehicles and so on — many motor trade insurance policies are combined. Sometimes these combined policies offer savings over paying for individual cover (but check the wording!)
10.Transfer Bonus
If you’re starting a new policy and don’t have any NCB, you can sometimes transfer bonus from a different type of policy for an introductory discount. For example, if you’ve got private car NCB but you’re going for some taxi insurance – ask about it.
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