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Fast times make for high car insurance costs

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Shopping around for car insurance is more important than ever. There can be hundreds of pounds between the cheapest and most expensive premiums quoted. Direct insurers and brokers can ask drivers up to 70 questions before quoting and, specifically, your answer to the question about convictions could have a big effect on what you pay.

In the latest Road Safety Bill proposed by the Government, motorists caught speeding at 45mph in a 30mph areas could have six points added to their license. As well as being dangerous, speeding could cost you dear when it comes to your car insurance with most insurers upping their premiums if you have any convictions.

According to the second annual Drivers' Attitudes Survey conducted on behalf of Tesco Car Insurance, nearly one in five drivers (19%) has at least three points on their licence compared to one in seven (15%) in 2003, with over a third (36%) experiencing higher insurance premiums as a result.

Direct Line, for example, would increase the premium of a 30-year-old woman driving a Fiesta by £60 if she had six points for speeding on her license. But the increase could be much more if the driver is younger or driving a much faster car. The Post Office would increase a premium by between 10-20% if you had points for speeding.

Smile for the camera - your insurance just got more expensive!

According to the AA, some insurers ignore a first speeding offence but if you get caught twice expect an increase in your premium by anything from 10-64%. Two offences in the same year will cause your premium to rise even more and if you add a CD10 conviction for driving without due care and attention (for example, crossing a red traffic light) your insurance bill could almost double or you may find it difficult to obtain cover at all.

"After a driving ban you will find it difficult to find an insurer to take you on," says AA spokesperson Ian Crowder, "and if you do, it will cost you a lot more. If you're convicted of death by dangerous driving you will probably have to go to a specialist insurer who deals with impaired driving records."

The increase in the cost of your premium will last for several years. Whilst points stay on your licence for three years, you are legally obliged to declare them to your insurer for five years. A drink driving conviction remains on your license for 10 years.

Do not even think about not telling your insurer of any driving convictions you collect. If your insurer subsequently discovers your offence, it may apply a significant penalty. And if you are involved in an accident that is related in some way to a previously undeclared offence, you could find your insurance invalidated.

Age, gender, location, profession and marital status are all other factors that affect your car insurance premium.

"Many insurers operate an upper age limit for quotations, which means that, even if you want to carry on driving, you may run into problems finding affordable cover," says Age Concern's David Hoyle. Unlike many insurers, Age Concern has no upper age limit for policyholders. Some insurers also refuse to cover young drivers. But of those that do some will offer discounts of up to 30% for young drivers who complete the Pass Plus series of supervised driving sessions, after they pass their test.

Statistically women have fewer accidents than men and generally can get cheaper insurance as a result. Specialist women's insurers such as Sheilas' Wheels, Diamond and Girlmotor claim to offer women a good deal but often do not beat the premiums quoted by mainstream insurers.

Your job also influences your car insurance premium with doctors, bank managers and accountants reckoned to be a good bet. Footballers, journalists and anyone working in the alcohol or gaming industries pay the most. Whatever your driving history, job or gender, it pays to shop around for cover; especially if buying online as most insurers offer a discount if you sign up on the internet. Norwich Union offers the most at 20%, the RAC and AA 15% and Lloyds TSB, Virgin, Churchill, Admiral, Elephant and eSure all offer a 10% discount if you buy online.

24 March 2006 © Moneyextra.com

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