By Gary Sinclair
Across Ireland, families are experiencing car insurance premium increases that run way ahead of official inflation.
The annual cost of car insurance is extremely important; the more people that carry it protects the viability of the overall market.
But taking a look at the cost of my own car insurance from 2004, 2005, 2006, 2007, 2009 and 2010, I have actually seen very little difference in the overall cost of the annual premium. This is despite the fact I continue to drive the exact same car (same make and model) with the exact same engine size (1.4litre) which I usually trade in every 2 – 3 years.
What I am certain of is that without my annual ‘insurance outing’ where I really put insurers to the test and get the best price, I WOULD be paying a lot more!
For example, in 2012, when the cost of my car insurance shot up from €398 to €610, I could have chosen to accept the new premium. However, putting some time aside, I eventually got the premium down to a very reasonable €300. I did this by calling my insurer directly (they offered a reduction to €550), calling a broker (they got it down to €500), the competition (they quoted €450) and then, re-contacting my existing provider. When they were about to lose my business, they quoted €300. The only sting in the tail was that the broker charged non-refundable fee of €40 for comparing the market.
2017 has started off with some sticker shock; my existing provider quoted an annual premium of €590, up from €432, a rise of 37%!
So, it was back to my ‘insurance outing’. I beat the bushes for the best price. But this year, things do feel different. Insurers appear a lot less willing to negotiate; some quoted higher prices (€620) and were not willing to do a price match. But perseverance eventually paid off. I settled on one that quoted €480. I have used the company in the past and their excess and other ‘conditions’ were in line with my existing provider. Finally, I returned to my existing provider. Yes, they would reduce their price from €590 to about €560 but that was it. So, I bid farewell and moved on. Thank goodness for competition!
Rolling premium cost for over a decade
For me, my rolling annual car insurance premium for the last 13 years is €462 so 2017 represents a 4% increase on that. Not too shabby!
On home insurance, the picture is a lot more positive.
During the great recession, I managed to track the replacement cost of the home and manage the insurance cost in the process. But in general, I have seen my home insurance costs decrease significantly. I still live in the same home and now pay 34% less than I did in 2007. In fact, when I look at the rolling average of my insurance for the last 12 years, I pay 33% less. In fact, the worst year for home insurance costs was 2010, where I paid €468 (my 2017 premium is €238), that is a 49% discount.
When I compare my rolling average cost of both car and home insurance for the last 12 years, I pay 5% less in 2017 than I have done on average for the last 12 years and this cost is still 16% less than the average combined premiums in 2009 – 2011.The combined cost in 2017 is also 16% lower than the combined cost in 2007.
Hopefully, Government plans to challenge some claims culture issues will have a positive impact for policyholders everywhere, especially, when it comes to premium costs. But there is no doubt that consumers still have a vital role to play in keeping insurers in check. Shopping around for the best deal does work, it forces insurers to sharpen their pencils and keep costs down.
Three steps to better prices
So, when it comes to home and car insurance, there are a few things I do every year that seem to have paid off:
- Start early – do not leave your insurance outing to the last minute. Start as soon as the renewal notice arrives.
- Compare like-for-like. I stick to my guns on this point. I write down the primary insurance needs (level of cover, type of cover, excess limits and so forth) on a sheet of paper and use this to get the best quotes. If I want to add on any extra insurance items later (such as various types of no-claims protection on car insurance or additional items to be covered on home contents), I can do this separately.
- Give a final call to your existing provider. Sometimes my existing provider has come back and matched or beaten a competitor’s price. For 2017, although my existing provider did offer a discount of 5%, it was not enough. The competition was almost 20% cheaper. Overall though, I am paying 11% more for car insurance in 2017 than a year ago.
I am not sure if happy shopping is the right phrase but shopping-‘till-you-drop can pay dividends and put money back in your pocket when it comes to getting the best car and home insurance deals.