Car insurance prices have reached record highs, with the average premium costing around £1,000, a 58% increase from a year ago in the U.K. To help combat rising costs, accident compensation experts Claims.co.uk have compiled six expert tips to lower car insurance premiums and outlined five reasons for the current price hikes.
Six expert tips to deal with rising costs
- Reducing mileage: Lowering annual mileage can decrease insurance costs. Consider pay-as-you-go insurance for low mileage drivers but make sure to provide accurate information to avoid issues with claims.
- Multi-car policy: Opting for a multi-car policy with certain providers can lead to savings for drivers with multiple vehicles, depending on individual circumstances and driving records.
- Improved security: Enhancing car security by installing approved alarms or parking in secure locations like driveways can lower insurance premiums, based on the insurer’s policies.
- No-claims discounts: Building a no-claims discount by refraining from making claims can reduce insurance costs. Consider covering minor damages yourself to maintain this discount over time.
- Avoid add-ons: Evaluate the necessity of add-ons like breakdown cover and legal protection. Purchasing these as separate policies may be more cost-effective than bundling them with car insurance.
- Car maintenance: Regular maintenance checks, such as monitoring tire pressure, vehicle lights, and fluid levels, can prevent accidents and subsequent insurance claims, ultimately saving money in the long term.
Five reasons why car insurance prices have risen
- Inflation: Inflation is a primary factor behind increasing insurance premiums, with economic fluctuations impacting claim settlements and overall costs.
- The energy crisis: Escalating energy bills have driven up repair costs for vehicles, contributing to higher insurance premiums.
- Rising costs of materials and labor: Repair expenses and labor costs have surged, leading to heightened insurance prices as reported by the Association of British Insurers (ABI).
- Supply chain delays: Disruptions in the supply chain have prolonged repair times, necessitating more courtesy cars and raising overall insurance expenses.
- Ban on loyalty premiums: The ban on loyalty premiums has eliminated price discrepancies between new and existing customers, resulting in higher upfront insurance costs.
A spokesperson from Claims.co.uk emphasized, “The U.K. recession in late 2023 has impacted various aspects of life, including the surge in car insurance premiums. By following these expert tips, drivers can potentially mitigate insurance costs. However, switching providers mid-contract may incur a cancellation fee, although some companies offer refunds for unused coverage. It’s crucial to weigh these options against potentially losing accumulated no-claims discounts for the year.”