Nine critical rules have been introduced to help millions of drivers cut their premiums with huge car insurance increases – in some cases two or three times what they paid the previous year. According to the Association of British Insurers, the average price of comprehensive car insurance in the first quarter of 2024 increased by around 33 per cent (£157) compared to the same period in 2023.
The ABI said the typical price paid in the first quarter of 2024 was £635, but many reported much larger increases. A member of BirminghamLive’s Cost of Living group said car insurance was increasing by £300 a year, while the cheapest quote they could find on comparison sites was £1,300. The latter found the annual cost had increased by £500 and some others had seen their premiums double.
There was one instance where a new driver could not find a fee of less than £200 a month, while a driver who had been damage-free for 25 years was offered almost £1,000. Another was quoted a renewal price of £1,400 compared to the £400 they paid last year; this was a staggering increase of more than threefold (350 percent). So what is the reason for all this and what can be done about it?
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Michael Foote, founder of comparison site Quotegoat.com, explained: “The only trips we were allowed to take during the pandemic were essential ones, leading to a significant drop in the number of cars on the road and a subsequent drop in car insurance costs. But as the world slowly returns to normal, road traffic has increased , which increased the risk of accidents and, as a result, increased insurance costs.
“This, combined with higher energy costs, rising paint prices and increased expenses on providing insurance such as the provision of replacement vehicles, has created the perfect price storm. Many drivers are now faced with exorbitant insurance premiums, creating stress without exploring alternative options and reducing mileage, coverage It is very important not to automatically renew your car insurance without re-evaluating factors such as level and excess.
He shared nine basic rules to reduce the price of your car insurance.
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Use price comparison websites: The price of insurance can vary significantly as each insurance provider will use its own algorithm to evaluate risk. Use comparison sites to compare prices from different insurance companies and use your findings to negotiate with your current provider to lower your price.
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Consider third-party coverage: Full coverage insurance offers the most protection, but you’ll pay a premium for it. Consider whether third-party or third-party fire and theft insurance would work for you.
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Maintain a good credit score: Insurers may take your credit score into account when calculating your premium, so it’s important to maintain a good credit score.
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Prefer a higher redundancy: Choosing to pay a higher voluntary excess can reduce the cost of your insurance if you need to make a claim, but be realistic about the amount you can pay upfront if you need to make a claim.
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Drive less: Insurance providers often offer lower premiums to drivers who drive fewer miles. Consider walking or cycling regularly to reduce your annual mileage; You also save on fuel costs.
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Increase security: Installing an approved alarm, immobilizer or tracking device in your car can reduce the risk of theft; This means your provider will consider insuring your car less risky.
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Annual payment: If you can afford it, paying your premium annually instead of monthly can save you money right now since insurance companies often charge interest on monthly payments. (This will change soon).
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Package your insurance policies: If you need home insurance, consider getting it from the same insurance company as your car insurance provider to get a discount.
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Avoid changes: Modifying your car may increase your premium, so it’s worth investigating the potential cost impact on your insurance
The ABI says insurers continue to absorb rising costs and the average amount of claims paid rose by 8 per cent to a record level of £4,800 in the first quarter of this year. ABI said claims inflation had not yet stabilized, with costs for repairs, replacement vehicles and theft rising.
Earlier in April, Treasury Committee member Dame Angela Eagle told a hearing on insurance: “My constituents, and many people who have written to the committee, feel that insurance is becoming more and more of a rip-off. As prices rise, it becomes harder to make a claim; when people make a claim “They often have to wait too long or are not treated fairly. This is especially true for compulsory insurance, such as driving insurance.”
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