A sharp rise in personal injury claims means that drivers will have to pay even more for car insurance this year.
Average premiums had actually fallen slightly between June and December 2008, but experts believe these will be more than wiped this year as claims continue to soar.
Data from the Association of British Insurers shows that personal injury claims and the associated costs increased by 22%, or £1 billion, to £6 billion last year, and that figure is expected to rise even further this year.
This has an extraordinary impact on driver’s insurance premiums – whiplash claims alone account for some £65 of every single policy.
To put this into context, the total cost to each policyholder for damage caused by uninsured drivers is ‘just’ £30 - less than half that amount.
Get yourself a cheaper quote
With the average premium standing at around £500, it’s important you do all you can to try and keep your insurance costs down to a manageable level. We list the best tips below.
Never simply renew: If your current policy is about to expire, avoid the temptation to renew without out shopping around, as insurers tend to reserve their best rates for new customers.
They charge existing customers higher rates and hope that inertia will keep you in the net. As a rule, loyalty is seldom rewarded in the world of insurance, so always shop around.
Shop online: Insurers offer hefty discounts of up to 20% when you buy your cover online. Just make sure you fill out your application form carefully, as small errors can be costly to fix. For example, many insurers charge an ‘amendment fee’ of up to £25 just to correct a spelling mistake in your name or address on the policy.
Add a partner: Younger drivers can dramatically reduce their premiums by adding an older driver to their policy. According to moneysupermarket.com, doing so can save you over £280.
Live a life of excess: You can further reduce your premiums by increasing your voluntary excess. Provided you can afford it, moneysupermarket.com estimates you will save an average of £55 by increasing it from £100 to £500.
Pay up front: When you buy insurance, you will be given the option to pay for the year’s cover up front, or by monthly instalments. While the latter may be tempting, it’s also far more expensive, as most insurers will charge you an obscene rate of interest on the outstanding debt (often above 20%).
If you can’t afford to pay for your cover up front, you can always put the policy on a credit card that charges no interest on new purchases for a year, such as the Capital One Platinum credit card, and pay that debt off monthly.
