Driving down the cost of your insurance products

Shopping around for cheaper car, travel and health insurance may not be as exciting as a little retail therapy, but you could end up saving enough money to fund your next buying extravaganza. It's simple to buy cover on the Internet as policies are easily compared and buying online can save hundreds of pounds. Moneyextra offers some top tips on ways to avoid paying over the odds for your insurance policies.

Shop 'til you drop

The price of any insurance cover can vary enormously so don't accept the first insurance quote that comes your way. By obtaining several quotes you can compare prices and ensure you are getting cover that meets your exact requirements. If you are changing your policy, always ensure you are buying like-for-like or you may discover you do not have the same level of cover when you come to claim.

Restrict the number of drivers

Ensure that only people who drive regularly are named on your car insurance. Depending on their status, additional drivers normally leads to a higher premiums, so it can be cheaper to add someone to your car insurance separately on each occasion they need to use the car. While most insurers offer a discount for including a spouse to your policy, adding on a young inexperienced driver will cause your premiums to rise. The cost is calculated on the youngest driver and he or she will not be starting to build their own No Claims Discount.

Drive down your mileage

The fewer the miles your car covers the lower your premium will be. So if your personal circumstances change - you take a sabbatical or go on maternity leave for example - then let your insurer know of any reduction in mileage. If your mileage is still high then its worth considering car-sharing, which can reduce mileage significantly. Be honest about your annual mileage, as inaccuracy will jeopardise any claim.

Protect your no-claims discount

Paying to protect your no-claims discount may increase your car insurance premium by a few pounds but this fades into insignificance when you consider the potential loss of a 65% discount on a premium of several hundred pounds. Some car insurers even offer up to 70% no-claims that can then be built up by an additional 1% per year to a maximum of 75% if you stay claim-free and with the same insurer.

Cash in on your status

Statistics prove that women are safer drivers than men so reduce premiums by choosing an insurer for the female driver. Similarly, if you are over 50 check out specialist insurers that offer a better deal to older, more experienced drivers.

Increase your voluntary excess

Agreeing to pay more towards the cost of an accident repairs will bring down car insurance premiums, but it is worth bearing in mind that in the event of a claim, you will have to potentially stump up the full excess agreed.

02 March 2007 © Moneyextra.com

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