The rise in living costs over the past year has left many households struggling. Many essential costs have increased, from food and energy to travel and insurance. When it comes to the latter, car insurance is one of those that has gone up steeply, and this has left many motorists in a difficult situation in terms of finances.
Of course, motor insurance is essential if you want to be able to take your vehicle on the road legally. However, compared to last year, many drivers have seen their car insurance policy price increase, along with the cost of other essential insurance services, such as home insurance.
It seems that since the global pandemic, financial situations have gone from bad to worse, with last year and this year seeing more and more household struggling to keep on top of rising bills. The increase in the average price of car insurance has made a difficult situation even worse for many.
According to the Association of British Insurers (ABI), the average premium paid on car insurance during the first three months of this year stood at £478, 16% higher than the first quarter of last year. Some motorists have found that their insurance companies have increased premiums by up to 70%
when the renewal comes through, which is unviable for many drivers already battling the cost of living crisis.
So, how can you avoid these higher costs and ease cost pressures? While hikes from insurance companies are inevitable, you can take steps to bring the cost of car insurance down in 2023, whether you are taking out insurance for the first time or want the best deal on your car insurance renewal.
Steps you can take to avoid car insurance price increases
There are various steps that you can take if you want to avoid car insurance price increases. Of course, many factors can play a part in how much your premiums increase - for instance, the renewal price can be affected by any insurance claims you have made that affect your no-claims bonus, whether your vehicles are new cars or second-hand cars, and whether you are an existing customer or a new one.
The ABI Motor Insurance Premium Tracker study shows that insurance providers often pass on general rising costs to customers, which can impact price increases. If you want to avoid car insurance price increases in 2023 and get the best deal on your cover, here are some steps that can help:
Consider the best level of insurance for you
One of the key things you can do to bring down the cost of your car insurance is to assess the level of coverage you need. If you have a new car, going for a comprehensive policy is essential to ensure you avoid the potentially substantial repair costs you might otherwise face in the event of an accident.
However, if you have a second-hand car that is quite old and of low value, you will be much better off with a more basic policy, such as third-party insurance. Also, consider what additions you need as part of your policy - for example, is it cheaper to have breakdown cover included in your insurance, or is it cheaper elsewhere? Do you want a courtesy car as part of the policy, or can you manage if your vehicle is off the road for a few days?
Take time to compare policies and providers
Another significant step to avoid car insurance price increases in 2023 is to compare policies and providers before you commit. While car insurance premiums have risen across the board, there can still be a vast variation between policy prices between different insurance companies.
You can use comparison sites like Confused.com to easily compare new policy costs and get competitive insurance quotes.
By using comparison sites and getting quotes, you can find the best insurance deal for your needs. You don’t have to be an insurance expert either, as these sites do all the work for you - all you need to do is compare prices and policies and decide.
Make use of modern technology
It is also worth considering using modern technology to bring your car insurance premiums down. With home insurance, you can often reduce prices using tech, such as intruder alarms and Ring doorbells. With car insurance, you can use devices such as a dashcam or tracker, making you a lower risk for insurance companies.
Avoid auto-renewals
One mistake many motorists make is enabling their insurance provider to auto-renew the policy. If you forget to cancel, you find yourself stuck for another year with a crippling financial penalty to pay if you want to cancel.
A survey conducted by Go Compare showed that 56% of drivers auto-renew, and 19% who do so don't check their quotes. It's essential to take the time to review your policy and compare quotes to ensure you are getting the optimal coverage and price for your needs.
So, the best course of action is to refrain from auto-renewing and to ensure you look elsewhere and compare prices at the end of your policy. New customers are often rewarded with far better deals from insurance companies, so it could be worth becoming a new customer with a different insurance company each year!
Increase your excess
Finally, consider increasing your excess on the policy to reduce costs. The excess is the amount you will pay from your pocket in case of a claim. Consider increasing the amount you are prepared to pay to lower your premiums.
Ease the financial strain by reducing your premiums
The above steps are simple methods to help you avoid car insurance price increases in 2023, which can then help ease the overall financial strain on households when so many other essential costs are rocketing.
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