It’s been a hot topic in the news of late that car insurance premiums appear to be on the rise again. Although as it’s through no fault of the everyday responsible driver who insures their vehicle, why has this increase occurred? According to the AA’s latest British Insurance Premium Index, premiums have increased around 3.7% in the last quarter with an overall increase of 16.3% over the last 12 months.¹ The main reasons behind this increase appear to be two-fold:

• Insurance premium tax (Government tax) has increased twice in the last year with the government raising the tax overall from 6.5% to 10%. With a further increase just announced up to 12% from June 2017. These costs are unavoidable to insurers and must be passed on to consumers.
• Whiplash claims are still a major problem for insurers, with a very high percentage accounting for minor injury claims. Cash payments are being made for these on a regular basis and insurers are unable to prove if claims are genuine, the costs have become unsustainable and impact upon all driver premiums

So what can you do to keep your premiums at a reasonable level?

Although the increases have to be passed on to consumers, there are steps motorists can take to try and keep their premiums at acceptable levels. Consider the following tips when reviewing your car insurance at your next renewal:

• Have you considered the value of your car and what it’s worth now? If you’ve had your car a few years, remember that its value can impact upon your premium. Be sure to check the market to ensure your cars cover is correctly estimated for its value.
• Annual mileage – has the use of your car changed recently? Perhaps you’ve retired or started working from home? Be sure to tell your broker if this is the case, the fewer miles you do, the lower the risk and possible savings for you.
• Occupation – Have you changed jobs or stopped working altogether? Different occupations can be more or less of a risk. Likewise if you’re retired then let your broker know.
• Named drivers – is there anyone listed on your policy that doesn’t really need to be? Having unnecessary additional drivers on your policy can affect the price so be sure to review this annually.
• Use your garage – most of us have a garage but generally fill it with junk. For the sake of saving money, get it cleared out and start utilising it for its intended purpose. Put your car in it! The attraction for thieves is vastly reduced if they have to break into a locked garage first, and this is recognised by insurers.
• Before buying any new car, look into possible premium changes. Newer cars can demand higher premiums and additionally sporty models even more so; it pays to research costs ahead of any purchase.
• Check the information held on record with your broker is as up to date as possible, you could be paying for cover you don’t need.

Hopefully these tips might help you save the difference against any industry increases, but be sure not to compromise on your cover levels. When it comes to a claim you still want to make sure that you are covered for the right eventualities. So whilst you can make savings, ensure that all information is factually correct.

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