7 Apr 2022

Cost of Car Insurance Rises

The cost of car insurance premiums has risen, with an average increase of £60 in comparison to more than a year ago.

Drivers pay £673 a year on average for their insurance, according to a study by Which?, a rise in comparison to the £613 figure of 2021.

New regulations brought in by the Financial Conduct Authority had been designed to make insurance policy pricing fairer by confronting the issue of loyalty penalties, whereby insurers were charging current customers more than new ones. The downside to this has seen the benefit of shopping around stifled.

The Association of British Insurers (ABI) claimed the rising costs can be attributed to the increase in costs associated with repairs following claims being made.

Regardless, the need to kept costs down on your policy has never been greater. But how can you do this? Which? delved into the topic:

Find the best deal

There are hundreds of insurance policies available to those seeking a new car premium. Using comparison sites is a good way to source the best deal but remember to check the companies that don’t advertise on these sites too as a deal could be found elsewhere.

If you find a better premium with a different provider, contact your current insurer and tell them what you’ve found; they may be able to improve their terms to keep you on board.

Can you pay annually?

There is often a saving from paying insurance in one go upon confirming the policy, as opposed to spreading the cost over 12 monthly payments. However, it is important to consider if this is affordable at the time as drivers often spread the bill to avoid the shock of one large payment.

Make your excess realistic

With insurance policies, there will be the option to set an excess amount. The higher the excess – the amount paid by the driver if they make a claim through insurance following an accident – the lower the premium. But if the excess is set too high, it may make it financially difficult in the event of needing to make a claim. There are savings to be found but expectations must be balanced with realism too.

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