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Cutting Insurance costs in a rising market

Irish News of the World

Sunday March 8th, 2009

Diarmuid MacShane

Cutting Insurance costs in a rising market

After a number of years of falling insurance costs, we’ve been told during the past couple of weeks that our main insurance companies need to hike up their premiums in 2009.

Axa, Hibernian Aviva and Quinn Direct have all said recently that they’ll be adding their own extra costs to our already under pressure wallets. They’re telling us that it’s because claims have increased and that they need to cover increased risks – yet for car insurance, 2008 was the safest year ever on our roads.

It’s more likely that the real reason the these insurers want to dip into our pockets even more is because they’re losing bucket loads of money on the stock market – causing their corporate profits to fall. And like the Anglo Irish Bank disaster, it’s left to the Irish consumers, yet again, to pick up the tab.

The Chief Executive of the Consumers’ Association of Ireland, Dermott Jewell, recently told us that we should resist and outrageous or unacceptable insurance price rises.

This week, I’ll give you a few top tips on how to get yourself the best value in all kinds of insurance. Following these tips, you may not just be able to resist any price rises, but you could even save yourself a few quid.

The standard advice you’ll hear everywhere when it comes to getting cheaper insurance is to shop around. The Financial Regulator regularly publishes insurance comparison surveys on www.ItsYourMoney.ie where the result is always “shop around”.

Don’t get me wrong – shopping around for insurance can sometimes be very worthwhile – particularly in the Irish market which is fairly competitive at the moment. In December, they told us shopping around for home and buildings insurance could save you up to €400, while last month you could have saved €300 on life insurance. Finally, NoNonsense.ie told us in January that shopping around for car insurance could save you up to €200.

And don’t just limit yourself to dealing directly with insurance companies assuming that brokers might make things more expensive. A recent study conducted by the Irish Brokers Association found that thousands of Irish consumers who deal direct with insurance companies could save themselves up to €1000 on their insurance costs.

According to Ciaran Phelan, Director of Financial Services at the Irish Brokers Association, “With many families now spending in excess of €4,000-€5,000 per annum on a variety of insurance cover, the study found that a review and re-price of their policies could result in considerable cost savings”.

All fine and good, but what else can you do to save money on your insurance costs.

In some cases, staying with the same company might actually save you money on your insurance. When you’re renewing, ask them for a discount just because you’re staying with them, and not shopping around. In this competitive market, it’s cheaper for them to keep a customer than get a new one, so there might be a discount in it for you if you’re willing to stay.

Many insurance companies will now give you discounts on different policies if you have more than one with them – say you and your partner both have car insurance with the same company. In some cases this discount can be from 5-10%.

Always keep an eye out for special offers like those that offer you free home or travel insurance if you have health and car insurance with the same company. Quinn Direct is currently offering this deal until 2010. That could save you up to €200. Hibernian Aviva have offered similar deals where you could get up to €400 cash back depending on the policies you have with them.

Do you have breakdown assist included in your car insurance policy but are you also a member of the AA? Cancel one or other of those – you could save up to €140 per year.

Speaking of extras, do you know what extras are included in your different insurance policies now? Trying to get our business, many companies have added in these extras to attract our business, but they ultimately cost us. Check what extras are included and you could save up to €50 by dumping them.

We all know the property market is suffering badly now, so with cheaper costs for labour and materials, it could be worthwhile getting your rebuild cost for your hose re-estimated in case it could reduce your home and buildings insurance premium.

A slightly controversial topic on the ValueIreland.com website in the past has been my suggestion that there are many kinds of insurance that you don’t actually need at all, depending on your circumstances. If you examine the risk that you’re insuring against (losing your mobile for example) and the cost of replacement versus the cost of insurance, is it all really worth while? If you look at all your areas of non-essential insurance, it might make more sense for you to cancel your policy and save your premiums instead. If you need the money when the risky thing comes to pass, they you’re covered. If it doesn’t, then you’ve a nice bundle of cash to spend elsewhere.

In a previous article I spoke about how people were holding on to their cars longer now that we’re in a recession. Are you driving a driving an older car now? Do you really mind if it gets a little nick here and there? Sometimes, we get to a point where it’s just not worth getting those little bangs fixed up. If that’s the case, you could save yourself up to €200 on your car insurance by changing from a fully comprehensive to a third party, fire and theft policy instead.

One final tip to save you a few euros is to wherever possible pay your full insurance premium up front rather than in installments. Paying by installments is really just getting a loan from the insurance company for the year that you repay each month. The interest that insurance companies will charge you for this loan will range from 5-15% so you could save yourself between €10 and €50.

For more information on saving money on all types of insurance, please check out here.

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