Insurance cover protects policy owners and bystanders from accidental damage and loss. Cover is expensive, yet the stakes are too high to carry on without it. Strangely, though you invest substantial sums in comprehensive insurance cover, your hope is that it’s never used. This unique reality sets apart insurance spending from the other things you buy. How often do you pay for a sandwich that never gets eaten? When was the last time you brought home a new gadget, but never flipped it on? While you can’t eliminate insurance spending demands, there’s no reason to pay too much for cover.
As seldom as you actually refer to your insurance cover, it’s easy to lose track of what you spend to insure your car, house, valuables, life, and health. With insurance renewal dates approaching, it’s often easier to stick with the status quo, never bothering to evaluating the cost of cover. As a result, many UK policy holders simply renew automatically, causing them to overpay for insurance.
If there’s money to be saved, why not dig a little deeper? Better rates may be available, without cumbersome contracts or conditions.
Are Insurance Practices Unfair?
The Financial Conduct Authority is looking at insurance practices that may be unfair to buyers. It appears the competitive marketplace bends over backwards to lure new customers with cheap introductory rates, before raising the price substantially in years 2 and 3 of policy ownership. The practice penalises loyal customers, who end up paying far more for cover than new policy buyers do.
One example of unfair treatment, referred to as “price walking” pushes policy prices higher each year a customer’s on board, ultimately resulting in a more profitable relationship for the insurance provider, at the expense of loyal customers, who don’t always realise they’re being duped.
The insurance industry has also drawn criticism for a lack of transparency in their dealings with customers. In one case, it was illustrated insurance companies bury important language deep in their renewal contracts, concealing it from renewal customers. The move is seen as a sign they’re not being as honest with their loyal clients as they could be.
Shop Around or Risk Overpaying
UK consumers are not shy about comparison shopping. Cost-conscious buyers study various online and brick-and-mortar alternatives, before following through with a retail purchase. Devoted money-savers willingly clip coupons for savings at the supermarket. And thrifty Britons will squeeze all the available life from consumer goods, before investing in replacements. With such a strong track record against financial waste, UK insurance buyers are surprisingly complacent about paying low rates.
With questionable practices unfolding among insurance carriers and heavy competition within the industry, shopping your cover is the best way to ensure affordable rates. Fortunately for UK buyers, there are several resources available to streamline the process. In much the same way you price shop retail goods, it is now possible to compare and buy car cover online, using web tools that gather information from various providers, for your review.
Reduce Your Rates
When you apply for car insurance, the information you provide has a big impact on the price you’ll pay for cover. Insurance companies use complicated calculations to establish risk levels and price their policies, but there are things you can do to reduce insurance bills.
During their evaluation process, insurance providers consider factors such as your marital status, home postcode, employment status, and other variables. Where you park your car at night can even have an impact on your policy price (turns out the driveway might be the least expensive place to park).
Your employment status can alter the cost of insurance, which may be a result of the different ways companies classify jobs. While remaining truthful, you may be able to reduce your rate by presenting your vocation in a different way. In one example, a manager paid less for his insurance, after also revealing he works for a charity.
If you don’t commute to work each day, you can leave off that type of cover, in order to reduce your car insurance payments. And if you’re an infrequent driver, it may be possible to install a “black box” system, which tracks your driving and results in cheap insurance, for qualified motorists. Advanced training behind the wheel is also recognized by some insurance companies, extending discounts to those who’ve completed approved courses.
Insurance payments are a costly, yet necessary part of UK household budgets. If you’re paying too much, or haven’t reviewed your cover recently, a proactive approach can help you save money – particularly on car insurance. For reduced rates, shop options from multiple providers before signing-up, and consider all the moves you can make to reduce your rates.