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How to Get the Best Deal on Motor Insurance

Commentary from Paul Walsh, MD of Peopl Insurance

  • Shop around and Switch

Shop around every year and switch if you can secure a better deal by doing so. You could save over 15% on your premium a year by shopping around for car insurance.

Recent Central Bank research shows that only one in four people switch their car or home insurer when renewing their policy. This means three out of four people are losing out on substantial savings. This is why it is so important to shop around for your car insurance each year – and to never automatically renew. You should ultimately be switching car insurer every two to three years.

A survey conducted by People in early 2023 found that more than one in two Irish motorists have seen their motor insurance bill increase over the last year. We believe the recent high inflation could be one reason many consumers are facing pricier car insurance premiums. It is well documented that soaring inflation has led to shortages of labour and car parts worldwide and that this in turn has driven up the cost of car repairs.

However, while outside factors undoubtedly have a role to play in the increase experienced by some drivers, not shopping around at renewal will always mean that people pay over the odds for their premium. Loyalty to just one insurer doesn’t pay.

  • Review Your Milage

It may be surprising to many readers that car insurers still place such a high value on insuring motorists with low mileage. The less they drive, the less the risk of accidents. Many of us make the key mistake of over-estimating our milage or rounding up to the nearest thousand. A common error seen by the team at Peopl Insurance is with drivers estimating milage at ‘around 10,000 a year’. The difference in policy cost between 9,999 miles per year and 10,000 miles a year can be as much as 10pc with some insurers, so check before you quote. Remember, most Irish cars show the distance driven in kilometers, yet insurers ask for miles.

  • Accept an Excess – But Only if It’s Worth It

An excess is the first part of a claim you must pay yourself. Accepting an excess on your policy can be a good way of reducing your premium. However, be careful about increasing your excess in return for a discount though. Only consider a higher excess if the savings will be substantial. Doubling your excess from €250 to €500 might only save you €10 on your car insurance – but the higher excess would leave you substantially out of pocket should you then make a claim.

  • Take Any Children off Your Policy if They Are No Longer Driving Your Car

Having children as named drivers on your policy will usually push up the cost of your insurance so in the event that any of your children previously drove your car, but no longer do so, be sure to take them off the policy. Forgetting to take a younger driver off a policy means motorists can pay well over the odds.

  • Add Your Spouse or Partner to the Policy

If you’re married or living with someone, adding your spouse or partner as named driver can make your premium cheaper, depending on their driving record and experience.

  • Have Your Right Occupation Down

If you have changed jobs or roles over the course of the year, you might find that ticking a new box in the occupation dropdown menu could have a positive (or negative) effect on your premium. Don’t be tempted to lie about your occupation in order to lower your premium though as doing so will invalidate your policy.

  • Get All the Discounts You’re Entitled To

Make sure you’re availing of all the car insurance discounts you’re entitled to as this could knock hundreds off your car insurance bill. The most valuable car insurance discount you have is your no claims bonus (NCB) as it could cut your car insurance bill by between 50% and 75%, depending on how long you’ve had your NCB for. So, check that you’re getting the full NCB discount that you’re entitled to.

Another handy discount is the multi-car discount, which is typically around 10pc and is available to a family or household that has two or more cars insured together. With the multi-car discount, the car insurance on the second or subsequent car will be cheaper than the first. This discount doesn’t usually kick in automatically so, you need to ask your insurer or broker if you’re eligible for it. Shop around as some insurers have more generous multi-car discounts than others.

Be sure to claim any loyalty discounts that you’re entitled to as you could be able to knock up to 15% off the cost of your car insurance if you have another insurance policy (such as home insurance) with the same insurer.

You might get a discount if you have no penalty points on your licence – so be sure to highlight any penalty-point free record that you have when shopping around for cover. Be aware too that insurers can start to load your car insurance premium if you have a certain amount of penalty points on your licence so don’t fall into bad driving habits and be sure to obey the rules of the road so that you stay penalty-point free.

Always check what discounts are offered by an insurer as you rarely automatically get a discount; you usually have to ask for it.

If you’re a credit union member, check if you can get a better car insurance deal at your local credit union.

  • Pay in Full Upfront

If you can afford to, pay your premium in full upfront rather than paying in monthly instalments. Your insurance could easily be 30% – or more than €100 – more expensive, if you pay your premium in monthly instalments instead of upfront.

  • Choose Your Car Carefully

Be careful which car you choose to buy. The model and engine size of the car you buy will have a significant impact on the cost of your premium.  If you can, it would be worth your while getting quotes for different models of cars before you buy one or replace an existing one. This will allow you to gauge which models are less expensive to insure.

Avoid purchasing a car that is over ten-years-old as these are generally more expensive to insure.

How to Switch Motor Insurance

The best time to switch insurance companies is when you are renewing your annual insurance policy, or changing your car.

Armed with your renewal quote, you should then start shopping around for cover. Have the details of your policy – as well as your driver’s licence – to hand. These documents will have details which insurers or brokers will ask you for when you’re shopping around for cover.

If you’ve had any claims in the past 5 years, you’ll need to supply the details of these. (These details will be in your current policy). You’ll also need to divulge details of any penalty points you have – including when you got them, when they’re due to expire and why you got them.

Get a few quotes from direct insurers and from a couple of brokers. One you have secured a lower quote than what your insurer is currently quoting, go back to your insurer and see if they’ll match it. It can be time consuming going to various insurers directly for quotes so going through a broker or two will save you time – as ultimately a broker will trawl the market for you.

If your insurer won’t match the price you have obtained when shopping around, switch. You will need to complete an application form to do so. You’ll also need to send your new insurer a copy of your driving licence and existing no claims bonus (NCB) letter. You can get your NCB letter from your existing insurer and indeed, you may already have it. Some insurance companies will ask for a copy of the Vehicle Licensing Certificate (VLC) to prove you own the vehicle as well as the car’s National Car Test (NCT) certificate to prove roadworthiness.

If currently paying your insurance by direct debit, contact your insurer in writing to cancel the direct debit and send a copy of the letter to your bank. You may also be able to cancel a direct debit through online banking. If you intend to continue paying by direct debit, you will need to set up a direct debit arrangement with your new insurer.

It is possible to switch insurance companies before your policy comes up for renewal – though your insurer will usually charge you a penalty fee for this. So before switching mid-policy, check what the policy fee would be if you do so and then decide if it is worth switching during the policy.

If you are switching to a new insurer mid-policy rather than when your policy is up for renewal, you will need to notify your existing insurance company in writing that you are cancelling your policy.