With record high fuel prices leaving UK households feeling the cost of living pressures, many motorists are looking for ways to lower their insurance costs.
The cost of auto insurance is now at its highest level since the last quarter of 2020. Meanwhile, home insurance prices are also rising. Still, there are ways to save hundreds on your annual insurance bills.
Here we share some top tips from consumer group Which? that can save you hundreds on auto and home insurance.
Do not renew automatically and save €49
Drivers who auto-renew their car insurance pay £49 more per year than those who switch. MoneySuperMarket found that millions of motorists are overpaying for their auto insurance at a time when premiums are rising.
Switch providers and save up to €120
If the contract expires or is approaching the end of a contract, customers should consider switching providers to save. Research by Compare the Market analyzed both the average premiums and the cheapest premiums quoted to drivers, and found that the cheapest quotes rose by £42 in the first quarter of the year to an average of £568. It concluded that this means that drivers can save up to £120 by shopping around to find a better deal. The savings increase dramatically for drivers under 25, who could save an average of £257 on their premium.
Use price comparison websites – and check the insurers that aren’t on them
There is usually a huge difference between the cheapest and most expensive insurance policies. Before you sign up for a new policy, which one? suggests that consumers research the best deals available by using price comparison websites to compare different products and ensure they pick the best one for their individual circumstances. It is worth noting that some insurers are not listed on all comparison sites. For example, Direct Line insurance is only readily available and NFU Mutual does not sell online at all.
Be realistic about the deductible you set
Consumers should ensure that they set the correct deductible on their policy. Setting a high deductible can lower the premium, but setting too high can make claiming unnecessary or too expensive. For example, a customer who makes a claim under his car insurance must pay both the compulsory and the voluntary deductible. So if their compulsory deductible is £250 and voluntary £500, they have to pay £750.
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Sometimes it can save consumers money if they choose not to file a claim through insurance and pay for repairs out of pocket (although they still need to notify their insurer of the incident). This is because when making a claim, there may be a deductible, reduction of no-claim discounts and premium increases.
Improve your home security for cheaper insurance
Customers are more likely to get low-cost home insurance if a provider considers them a “low-risk customer.” Before looking for an insurance policy, which one? suggests that customers improve their home security by adding deadlocks to exterior doors and locks on accessible windows, as most insurers have a minimum level of security before accepting new customers. Households may be able to get even better deals by going the extra mile and installing a burglar alarm or a five-handle mortise lock.
The consumer group asked burglar alarm owners who also have home insurance whether they had saved money on their premiums by taking out insurance, and 43% agreed.
Choose the correct job title
Job titles can affect the cost of auto insurance. When looking for the best policy, consumers should check for a choice of labels when entering their profession, e.g. describing themselves as a “writer” rather than “journalist” as this can sometimes affect their premium . However, drivers should ensure that the profession they list is an accurate description of their circumstances. Misrepresentation may result in insurers canceling the policy or refusing to pay claims. Customers should contact the insurer directly if they are unsure how to answer certain questions.
Negotiate to save £50 on your car insurance
For those who prefer to stick with their current provider, Which? recommends haggling to get a better deal. Customers can use inexpensive home insurance policies they’ve found elsewhere to leverage their provider. The consumer group found that customers who negotiate pay less than those who don’t, and in a recent survey those who negotiated reported an average discount of £50.
Rethink add-ons and save £50
Car insurance add-ons can run as much as £50 or more on some premiums. Common add-ons may include legal expenses insurance, personal accident coverage, roadside assistance, and key coverage.
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Motorists may already have these included with a packaged bank account, while key coverage may be included in some home insurance policies. Drivers should think about what they do and don’t need and check the policies they already have to find out what they are covered for.
Consider getting a black box – younger drivers can save over £1,000
Black box insurance, also known as telematics, calculates premiums based on the way motorists drive. Insurers can monitor how well and often drivers drive to give a more accurate price and reward drivers by lowering their premiums. Some insurers also offer policies that track the driver’s mileage.
A Compare the Market report found that telematics quotes are cheaper than standard auto insurance for 78% of drivers between the ages of 17 and 20 and 69% of those between the ages of 21 and 24. The price comparison site found that the average telematics quote for a 17-20 driver was £1,811, a saving of £1,137 on the cheapest standard car insurance.
It pays to compare quotes from these providers with quotes from more traditional car insurance policies. If a driver only needs to drive a car for a short period of time, they should consider getting temporary auto insurance, or a policy with a monthly recurring contract that can be canceled at no significant cost.
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Don’t pay home insurance when you rent a home
Landlords have to deal with home insurance, so tenants only need to take out home insurance to protect their belongings. While specialist short-term and single-room policies are available, which ones? suggests renters compare the premiums and coverage levels of renters policies to more traditional content coverage. Leaseholders can also take out building insurance through their service costs, so they do not have to take out separate insurance.
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