12 Changes that can reduce your Car Insurance Premium

Have you ever been terrified by the cost of your car insurance? Have you attempted to get a quote from an insurer, but the price seems more than the car you are trying to insure? Do you ever have the feeling of being singled out by insurers for high premium? I may have some good news for you.

It is interesting to note that so many factors contribute to the rise of insurance rates. They are known to some people but not so clear to others. If you only wish that the prices will come down, that may not happen soon enough. The good news is that there are some things that you can change that will result in a reduction in the amount you will have to pay.

The twelve changes that may help to instantly and or progressively reduce car insurance premiums are below. The principles apply to many other services you may require in other areas of life.

1. Change your insurer or cause your insurer to change

I know it could be very challenging to change. It may seem convenient to stay as you are with your current insurer. You usually do not need to do extra work, but you may be paying more for your insurance as the company may not be offering you the best deal with your current circumstance, even though they might have done so in the past.

Things change rapidly, and you could potentially get a better deal from another insurer that could favour your present circumstance or something about you more than others. Insurance companies tend to react to information differently at different times. For instance, your profession could be high risk to some insurers based on assessment, at a particular time, or your age. Some other information may be interpreted differently at different times by different insurers. It is always worth putting in the extra effort as it usually pays a good dividend. This exercise will give you a good idea of the range of rates and confidence that you are not paying too much.

It can also help you negotiate with your current insurer as they would usually love to keep you. They may change to offer a competitive rate only because you have asked. You can change your insurer, or you can cause them to change in your favour.

Suggested actions:

Shop around directly or indirectly and do so ahead of time using comparison sites. They are available in so many countries around the world. Some examples are Gocompare and Moneysupermarket in the UK.

Take time to compare prices and features offered.

Call your insurer and negotiate based on the rates offered by other insurers.

2. Change your Attitude

Insurance is an arrangement to compensate when the unexpected happens. You can help reduce the risk of the unexpected by your attitude. It will reflect in your quotes as the information gathered about you will be used to determine how risky you are. It could help predict if you are likely to be a source of claim from the insurance company. Follow the traffic regulations and drive safe. Safe enough to avoid accidents by the errors or negligence of others as much as you can.

Drive carefully as this will help you earn more no-claim status, which reduces your rates every year. Try to avoid distractions. They are a lot of them today, from in-car entertainment to technological devices. They can shift your focus, thus causing the unexpected, which could be accident, fines and so on. Even if you are not at fault when involved in an accident, you still have to declare it and most times for up to five years after the incident, which could affect the number of companies willing to give you competitive rates or even insure you during that period. Protecting your no-claims bonus is not enough; if it is, you would not need to declare a no-fault accident, so it is better to be careful.

Suggested actions:

Drive safe and be focussed when driving.

Avoid distractions.

Watch out for other road users.

Test by adding some no claim bonus on a quote to see the difference in the rates. The potential savings could motivate you to maintain a positive attitude.

3. Change your car

Car insurance premiums changes with the type, year, cost and specifications of the car, among other things. If you are not aware of this, especially if you had chosen your car for reasons like colour, make, size, cost, among others, you may find out that they are many more cars that can meet your needs with reduced insurances rates. There are 50 car insurances groups, and every car belongs to one of 50 car insurances groups. The groups typically band cars based on the cost of insurance, from the cheapest to the most expensive to insure. The group starts from one, which is the cheapest and ends with group 50, which is the most expensive to insure. The more powerful, expensive, sophisticated and rarer your car, the higher the group it will be in, which means the more expensive it will be to insure.

Suggested actions:

Check the insurance group of your car. If you think you can change it, search for cars in the lower insurance group that could meet your needs.

Find websites that compare cars based on insurance groups among other specifications.

Test by adding a car (usually there are options you can tick to say ‘not bought yet’) in the low insurance group and see the difference in the rates as it could motivate you to change.

4. Change your risk level

Insurance is all about risks. You pass the responsibility to a company if the unexpected happens and they pay the bill. Insurance companies, however, allow their customers to signify their willingness to bear some of the risk. It is usually a function of how much you are willing to pay if the unexpected happens. It is termed differently in various countries, but the concept is the same. It is called Excess in the UK.

You can typically choose an excess amount when you take any car insurance, which is the amount of money you would have to pay before insurance picks up the bill in the event of a claim for an accident, theft, or other types of damage to the vehicle. Excess varies depending on the policy and company. Some even have a compulsory amount which typically ranges from £50 to £1,000.

The idea behind this is that, usually and in most cases, the lower the excess, the higher the annual premium for your car insurance. Conversely, the higher the excess, the lower the car insurance premium. You will only need to pay the excess if you make a claim. If you do not, you will not need to pay that money. If you are willing to take the risk you can reduce your premium by as much risk as you are willing to take, and you can see the premium drop as you increase your excess. You may benefit from the low premiums if you do not make a claim which may be a good idea for you, especially if you have no damages or minor damages that you can fix without the need to claim. If you do have to claim, you will need to pay the excess amount, and the insurance takes care of the rest.

Suggested actions:

Increase and or reduce the excess and see the difference in the rates until you are comfortable with both the rate and the excess.

5. Change the number of drivers

The number of drivers on a policy can affect the rate as well as other factors related to the named drivers. It might be cheaper to add a spouse or an adult to your policy than to be the only one on the policy. You may find that it will cost less to add a younger person to a policy of a parent than for the young adult to take a new policy.

Suggested actions:

Test to add a spouse or an adult to your policy as see the difference.

Test to add your young adults to your policy and see the difference compared to having a policy on their own.

6. Change your history

One of the obvious factors for determining car insurance premium is the record of the driver. A driver with a history of many accidents could make the insurance companies pay out a lot of money, while a driver with none would have a record of no claims. However, many have been amazed to find out that insurance companies may also consider their credit history. A good credit rating gives an impression of responsibility which often attracts competitive rates. If you can improve your credit rating, it could have a positive effect on your car insurance premium. For some, it might just be because they use wrong details, which means that if you cannot be consistently verified, you may not enjoy the benefit of being seen as responsible. Your details should match, and your records should be clean.

Suggested actions:

Be financially responsible and use your real address or information. If your details do not match or cannot be confirmed, you may be filtered from competitive rates, and you may never get to know.

Use the same details for your utilities and do not default in your payment.

7. Change the date

One of the best ways to save on your car insurance is to plan and request quotes ahead of your renewal date. If you choose a start date equal to the same day, the rates are usually higher than future dates. Most comparison sites allow up to twenty-eight days in the future. A farther dates usually means cheaper rates.

The idea behind this is simple. If you need the policy immediately, it may show you are desperate, high risk or in trouble. If you are willing to start twenty-eight days away, it may give the impression that you are organised, less risky and in control.

Suggested actions:

Request different quotes four weeks before your renewal or the anticipated commencement of your policy.

Request quotes at different times of the time day as some sites are only accessible at certain times.

8. Change how you make decisions

Several insurance covers is suited for different situations. In the UK, most insurers offer third party; third party, fire and theft; and comprehensive. Make sure you choose the most suitable to your circumstance, considering the cost and the value of what is insured. It may be difficult for you to know what will happen in the future, but you can make decisions based on facts available to you and reduce the amount you are giving away.

For instance, you have a car worth £800, and a comprehensive cover costs £600 per year. It may cost you less to get a third party cover or something similar, which could make more financial sense. In the event of a claim on a comprehensive cover, the insurance company would likely give you the total worth of the car, which you could have saved by getting a cheaper cover. It depends on so many other factors, which includes your claims history, and car specifications.

Suggested actions:

 Get a quote for all available insurance covers and compare the cost, then make decisions based on what you need.

9. Change your perspective

How do you see insurance? To some, it is an opportunity to get some quick and big money. They try to play the system to get some claims and thus free money. This perspective is not beneficial as it destroys the purpose of the insurance. It also affects many more people who are doing what is right. Some people insure their cars and organise an accident or fire or theft to get some money. It will lead to many negative implications, not just for themselves but for the area. It may become a high-risk area. Many get caught, and they do not get the financial gain they anticipated, putting themselves in a far worse situation.  Three men were jailed for life in Leicester as they set explosion in a shop in a bid to claim £300,000 insurance payout. It was sad to hear that five people died. The wrong perspective creates more problems. If everyone has the right perspective, not seeking selfish gain, then the dividends that accrue from it will benefit all. Many are upset because insurance companies make so much money, but they have to deal with so many fraudulent cases. If that could be brought under control, it will be of common good. It will even be much better if everyone can take responsibility for their actions; there will be no need for the compulsion.

Suggested actions:

Get the relevant cover for your car and avoid fraudulent claims.

10. Change from assumptions to facts

You may have found that sometimes, some insurance covers that will usually be expensive could turn out to be cheap depending on your circumstances and other factors. For instance, you may enter your details on a comparison site, requesting quotes for comprehensive, and third party car insurance cover. You may find out that the comprehensive cover is the cheapest, maybe from a particular company or based on some criteria that matched your current circumstance.

Don’t always assume, be flexible and try all options. The usually more expensive may work out cheaper for you, at least at that instance. There are also cases of bonuses that could be helpful that could mean a great deal for you, like breakdown cover, which you would have had to pay for anyway. If it includes more bonuses that you need, it could mean more savings for you.

Suggested actions:

Try all available options and make decisions based on facts.

11. Change your Location

You may have discovered that car insurance varies from one location to another. The difference may vary from country to country, but it has similar effects on insurance.  The same car insured by the same person in London gets a different rate when it is in Kent. In other words, the only difference is the address, and it changes the premium. You can by save by moving to the right place.

I appreciate that it may not be an easy one to move house because of car insurance, but you may plan to do so in future. It may be worth considering the impact on your car insurance. It could increase or decrease based on the new location. Generally, areas with a history of theft and crimes tend to reflect on the premium.  It makes it more expensive, but those with less criminal activities enjoys low rates as the insurers usually predict the future with the past.

Suggested actions:

Test by adding your new or desired location and see the difference in the rates.

12. Change how you pay

The way you pay for insurance matters as it could increase the total amount you have to pay. If you have a quote, you can decide to pay it all at once. If you do so, then you pay that exact amount. If you choose to pay it monthly, it becomes a loan that now has interest added to it. It has the flexibility of paying a little amount every month, but you have to pay more in the end. If you are looking at saving money, it may be worth paying it all at once if you can. Paying monthly is more expensive as you can give away about 20% on interest as it is borrowed money.

Suggested actions:

Test by opting to pay in full rather than monthly and see the difference.

Thank you for investing time to read this post. I hope you have found it valuable. I will be glad to hear from you. Please leave a comment below and share.

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