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Wednesday 7 December 2016

Consumer Champion: Has your car insurance premium just gone up? Here's how to get it down

Here's how to get down your insurance costs
Here's how to get down your insurance costs
Insurance policy
Woman using mobile phone

Anyone who has, like me, recently received their motor insurance renewal may be picking themselves up off the floor.

Predictions of 15 to 20pc premium increases are not evenly spread out. Younger drivers in particular are seeing quotes for €3,000 to €4,000 where they might have paid €2,500 a few years ago.

Despite the EU gender directive which bans different pricing for men and women, the insurance industry's response in many instances is to increase everyone's premium because they know claims for young men are still higher than for women.

Other reasons for hikes include heavy losses being carried at major insurers including FBD and RSA, not to mention the "Quinn levy" of 2pc added to all policies.

There has also been a rise in traffic volumes with the economic upswing, which means more crashes (51,083 more during 2013). Some 75pc of all journeys are still by car, and most accidents occur near home, not on dual carriageways or motorways.

The €1bn taken in annually in motor tax isn't ring-fenced for maintenance of our road network, but swiped for all kinds of government expenditure, leading to a deterioration in the quality of roads - which also causes accidents.

Another concern is the rise in the number of claims and amount of payouts. In 2003, the Personal Injuries Assessment Board (PIAB) was set up to mediate with insurers and claimants and avoid costly court cases.

It worked, for a while, but people have drifted back to litigation in the hope of higher payouts.

One lawyer claimed that using the PIAB was akin to "cutting your own hair". Hmmm. So everyone's premiums go up as a result.

All this means that it's no longer enough to simply shop around with the usual suspects to get a better quote.

Jonathan Hehir, who runs Coverinaclick.ie, says much of his business is now being covered by UK providers.

Certainly there are more unfamiliar insurers on the market, and I found myself going from A to Z when I received a very high renewal from Aviva and switched to Zenith. Never heard of them? Neither had I, but they saved me €80.

A decent broker will offer a range of options and you can design your own policy to include things such as roadside assist, a change in excess and no claims bonus protection.

Blue Insurance has recently offered a novel two-year product that at least locks in your rate, but what else can you do to keep costs down?

Simon Moynihan of Bonkers.ie says you should treat your renewal letter as a guide and play one insurer off the other.

"Sometimes just questioning the quote can lead to a reduction, and if you get a high quote it's not personal - the insurer may just not like you, or your car, this time around".

This week's table shows a range of quotes for three sample motorists.

Insurance company actuaries are just like posh bookies and need to balance off the type of driver and car on their books. A "high vehicle grouping" - for example, bangers with big engines - are not desirable, even though they're worth very little.

Neither are young drivers. If a company has too many, it must charge all the safe middle-aged people more to compensate.

Another insurer may have an entirely different grouping of risk, but you won't know until you ask.

If you have, say, an alarm, immobiliser, garage, you can ask for a discount. Bundling policies home, car, health) can be cheaper too. Adding a second driver, bizarrely, can also drop your premium.

Comprehensive cover is worth it unless your car is worth little. Oh, and avoid penalty points - insurers hate them.

 

Time insurers joined 21st Century

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The Law Reform Commission (LRC) has hit out at bad practices by insurance companies that use smallprint and archaic rules from centuries ago to avoid paying out on claims.

One of these is non-disclosure, which is supposed to apply when you deliberately avoid telling your insurance company about, say, penalty points or a serious illness but will be used to repudiate a claim even when it has nothing to do with the event being claimed for.

For example, not having a burglar alarm on your house can void your home insurance, even if your claim is for fire damage. On an illness policy, a minor procedure a few years ago may stop a claim for cancer now.

Many policies carry catch-all questions asking for disclosure of anything the customer believes to be a "material fact", leaving clients in impossible situations.

The LRC recommends banning such binding conditions, allowing remedies for innocent errors by consumers and altering the concept of "insurable interest", or who can take out a policy on whom.

At present, you must have a financial interest in a policy, but many people are paying mortgages for others (parents sometimes do for adult children) and can't take out life insurance to cover this. The LRC moves will be met with some hostility from the industry, but hopefully it will persevere and bring contracts into the 21st Century.

 

Will new provider iD ring some changes in mobile phone market?

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It's great to see competition in the mobile phone market, where massive players such as Vodafone, 3 and Meteor are hoovering up the space.

Last year's merger of Carphone Warehouse and Dixons has seen a new operator, iD, being launched.

Some 65pc of customers here are pre-pay and open to switching, with 30pc likely to in the next year. iD is chasing 6pc of the market, to put it on a par with Tesco Mobile.

Let's see what the prices and network are like when they launch. My advice to them? Keep it simple.

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