Car Insurance Renewal Myths Busted

I think we can all agree that there is nothing exciting or interesting about car insurance, right? Its a legal requirement, and considered by most to be a hassle or a chore, and what’s worse is that a number of people feel like they have no idea what they’re doing when it comes to it, which can really cause problems further down the line.

So while this might not be the most exciting topic to be blogging about, I thought I’d share some advice and information from my experience of working in the car insurance industry. I’m not sharing any industry secrets or naming/shaming any particular companies, I’m just hoping to clear up some of the myths or beliefs, and hopefully help a few people out! Here goes..

I’ve had another claim free year, why has my insurance gone up?

Its a common belief that every year you go without making a claim earns you a drop in your renewal price, and while this may often be the case, there are a number of factors that could mean you see an increase. This year especially, there have been a number of changes in industry factors that have been totally out of the companies control, namely the increase in Insurance Premium Tax (IPT) and changes in legislation on personal injury compensation, both of which have hit car insurance hard.

On top of this, insurance rates are calculated based on a whole tonne of information and statistics, so while you might have another year of driving with no accidents, things like your car being another year older, or if there’s been an increase in the number of accidents or claims in your postal region, are all things that are factored in during the underwriting process.

What about my no claims discount?

No claims discount (NCD) can of course reduce the cost of your insurance substantially, and within your first few years of earning NCD, you should be seeing a general reduction in your insurance quotes, but the further up the years you get, the discount percentage increases by smaller increments, until you eventually hit your insurance companies maximum, which in most cases is 9+ years. At this point, while you may feel like your insurance should be dropping every year – which is may do! – you’re already benefiting from the highest discount you can get, so you may find a bit of a plateau.

My insurance company will give me a discount if I tell them I’m going to cancel

Sure, a lot of insurance companies will be able to offer you a discount if you express unhappiness at your renewal price, but I urge you to think about the amount of discount they give. If they can knock £100 off the price the moment you question the price, why is it they can do that without second thought? You may find you’re only offered £10-15 off, and while this may seem a little stingy, what it actually suggests is that you were sent out a pretty accurate price in the first place, rather than an over-inflated price designed to make you feel like a winner when they half the cost.

I shouldn’t have to shop around to get the best price

One of the biggest reasons that people see their insurance prices go up and up and up is because they allow their insurance company to renew the policy time and time again without comparing the market. Most insurance companies do have a preferred customer, be that based on age or any other factors, and while you may think that you’re being a lovely loyal customer staying year after year, it is possible that you can get a much better deal elsewhere. This has actually become such an epidemic that the insurance regulator has mandated that insurance companies must now put a statement on their renewal quotes encouraging their customers to shop around, so don’t be insulted if you notice this!

On the back of this, insurance companies can vary massively in how they assess your details, so one company can quote you £300 while another quotes you £600 for exactly the same cover!

Do I really need to review my insurance every year?

YES. I urge you to check through all of your documents every year, as well as being sure to update your insurance company to any changes throughout the year. Even small changes, such as a different job, becoming a homeowner, going from living at home to living with a partner or getting married; these are all factored into the calculation of your insurance premium, and its so easy to forget about informing your insurance of these changes, but they can make a difference!

What should I do if I’m uncertain about anything on my policy?

If you ever have any questions about your car insurance, the first thing you should do is speak to YOUR insurance company. While friends and family may be keen to give you advice, if they’re insured with a different company, there could be a big difference in what their insurance covers to what yours does, so bear this in mind when seeking a second opinion.

I’m sorry to bombard you with quite a lot of information, but I really hope that I’ve been able to help a few people out with this post! If you have found this helpful, please let me know as I’d love to know if you’d be interested in seeing more posts like this!

This post is primarily based on facts, but any of opinions stated in this post are my own personal views and do not reflect the views or opinions of any insurance companies.
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5 Thing I Don’t Spend Money On

I’m always money-conscious. I check my online banking at least twice a day and my credit card statements almost as frequently. I check every transaction coming in and going out, and while this may seem anal to some, its what makes me great at keeping a budget.

Being good with money is something that I take pride it; its how I can afford to live my life the way I want to, and how I can save while still enjoying myself, and there are a few things that hardly ever appear on those regularly checked bank statements, which probably help me save a lot.

Alcohol

I’m not tee-total, but I rarely drink anymore. I’m not a night-out person, and on the rare occasion that I do go out, I’m such a lightweight that it doesn’t cost much anyway. It amazes me that some of the guys I work with drop £50-100 in a single night and I’ve never even spent a fraction of that.

Magazines

On occasion, normally at airports, I’ll treat myself to a magazine or two, but I can’t find a reason to justify £3-5 on something that I’ll probably skim read once, and maybe pick up one more time, before it gets dumped in the recycling bin.

Coffee

The perks of being a non-coffee drinker is that I don’t spend any money on a getting a caffeine fix. Also Starbucks hot chocolate is yuck..

Train tickets

Unless they’re a good price, whenever I need to get to London I walk straight past the train station and get on a coach instead. UK train prices are ridiculous, especially when it costs almost £40 to get to London when I can do it for £10 on a coach that takes about the same amount of time.

Subscriptions

Unless you’ve got that glorious ‘first box free’ followed by the desperate rush to cancel the card payment after the free trial is up, I pay for Netflix and that’s it. No Graze boxes, no beauty subscriptions or any of the other monthly direct debits that clog up your account.

They might seem like little things, but I think I probably save a fair amount of cash without spending money on these, and they’re all things that I quite happily live without, so all the better for my bank balance!

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My Money Saving Methods

I don’t know about anyone else, but money-conscious 24/7, and at this time of year, everyone feels the pressures of Christmas costs.

October-December is always a pricey time of year for me; half my family have birthdays in October and November, before even thinking about Christmas, but this year especially, with our Disney trip in January and saving for that a high priority, I’ve had to spread the cost, and save as much as I can, wherever I can, and I think I’ve done a pretty good job of it, so today I’m going to share some of my money saving methods!

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• Set saving targets, and stick to them.

Each month when I get paid, I put a fixed amount into my savings accounts. I have three: an ISA, which is for my future; money goes in and doesn’t come out until I need something like a mortgage deposit, and two flexible savings accounts: one for my business savings – again, money goes in and stays there – and my holiday savings, which is for just that, but also if I desperately need money, that’s where I take it from. I don’t even look at how much I get paid each month until my savings have been deducted.

• Look at earning cashback

There are loads of ways you can earn cashback these days, from choosing certain bank accounts and credit cards, to changing your shopping habits just ever so slightly. I use TopCashback, through which I earn a little bit back by shopping online as I always do, just going through their website first. After a certain amount of time, I can withdraw this money, either directly transferring it into my bank account, or turning it into vouchers for my favourite retailers. Lloyds bank also have spending rewards, where you can earn cashback just by paying using your Lloyds credit or debit card. Bearing in mind I haven’t made any big purchases (buying insurance and paying household bills through these sites can earn you loads!), I’m really impressed with what I’ve earnt just in the last few months!

• Make the most of loyalty schemes

That soft-spot you’ve got for a Costa? Yep, you can get something back from that! Your weekly food shop at Tesco could pay for a meal out, or even a day out! Buying all your Christmas presents from the Boots with their irresistible 3 for 2 offer? You could get a little extra something for yourself with the earnings from that! I have a purse full of loyalty cards, and I’m always sure to check up on how their doing for points, and what those points can get me in return; if I go to the cinema once a month, after a few months that’s a free ticket, and a happy bank account.

• Shop off-season

More often than not, the unworn items in my wardrobe are just that because I bought them in the after-season sale and now I have to wait until next year to wear them. I’m talking jumpers in July and bikinis in October; I currently have a Christmas top that I’ve bought in May that I’m just dying to finally bring out in a few weeks! It means I don’t feel guilty every time an ASOS order arrives!

My mum does this too: after Christmas she buys the Lindt chocolate bears once their cheap, and gives them to us for Easter instead of Lindt bunnies..

• Spend to save

Totally counter intuitive, I know, but sometimes paying a little extra for some things will save you in the long run. Paying £79 a year for Amazon Prime might seem steep, but that’s a whole year of movie and music streaming, as well as free next day delivery on an enormous range of items, and if you add up what you might be paying for delivery on those items, and another entertainment services, in the long run you are saving. For me, the discovery of ASOS Premier was a game-changer; £9.95 for a year of free next day delivery, plus exclusive discounts and early access to sales? I’ve already saved more than £20 in the 4 months I’ve had it!

• Re-evaluate where your money is going

Double check that you’re getting the best deals on things like your mobile phone contract, insurance, or utilities. Its so easy to become comfortable with it automatically disappearing from your bank account, but if you dig a little, you might find there are better options out there for you.

• Spread the cost

At this time of year especially, starting shopping early is key. I tend to buy things as I see them (I bought my sister’s birthday present in June this year, for her birthday in November) and start looking as early as September/October. I can then drive everyone I know mad when they start their Christmas shopping in late November-early December and I’m already done!

• Empty your coins

Carrying coins around with you can encourage bad habits because you don’t see spending them as significant as breaking a note, so you’ll buy those crisps from the vending machine, or splurge on an overpriced sandwich instead of eating the lunch you packed (packing lunches for work is also saving me a bomb!), so emptying your purse every day or week will save you more than you may realise.

Well, they work for me! What are your favourite saving hacks?

xoxo