Insurance Tips for Those on a Budget

Save Money on Car Insurance
Save Money on Car Insurance

If you’re trying to cut down on your household bills and live a more frugal lifestyle, then you may be wondering what you can do to reduce your insurance. You’ll likely have a couple of insurance policies – like home insurance and car insurance – that you pay out once a year, and, unless you’re sensible with your money and shop around for discounts and offers, your premiums will increase year on year as part of your insurer’s “inflation”.

But there are ways to reduce the amount you pay for your insurance. Below, we’ve rounded up everything you need to know about cutting costs and getting more for your money.

Use a price comparison website

If you’re looking to save money on your car or home insurance, then you should start your search on a price comparison website. Make sure you have your current policy details to hand and input the information so that you can get the most accurate renewal quote. Oh, and don’t be tempted by cinema tickets or free toys in exchange for taking out a policy – in these cases, the price comparison websites are making enough commission to offer you a gimmick, so ask yourself whether you’re getting the best deal. Sometimes, you can save even more by going directly to the insurer, especially for companies that do not have a presence on price comparison websites, so don’t start and end your search on one website.

Threaten to leave your insurer

It’s one of the oldest tricks in the book, and it works. If you’ve had a renewal quote through from your home or car insurance company, shop around and, even if they offer the lowest renewal rate, threaten to leave. Most companies train their staff to retain customers and offer discounts and special offers for those they’re about to lose.

As The Telegraph reports, threatening to leave a broadband provider saved one customer an impressive £282 – and the same could be true of your car or home insurance policy if you shop around. Make sure you do have a backup plan if the company follows through and removes you from their system. It’s unlikely they’ll cancel your policy entirely without challenging you and offering a discount, but it does happen, and it pays to be prepared.

Take out temporary insurance

Not everyone owns a car and uses it on a regular basis. If you fall into this category and you want to rent or borrow a car for a short period, whether it’s for freelancing, taking a holiday or delivering goods to a client, consider the benefits of temporary insurance.

Companies such as Call Wiser offer temporary car insurance policies that span from a single day to a week or two, giving you the flexibility and freedom to drive where and when you want without being tied down to a year-long car insurance policy.

Of course, if you’re taking out temporary insurance policies on a regular basis, then you’ll probably find that it’s cheaper and more cost-effective to choose an annual insurance policy – so do your maths and make sure the numbers add up before you take out cover.

Add a named driver to your policy

The cost of your car insurance policy is determined by risk, and so if you’re a new driver and want to add a parent, guardian or partner to your policy who is an experienced and time-served driver, you may get a discount on your policy. Make sure you understand the rights of each of the policyholders and don’t add a driver unless you know you’ll get a discount.

Avoid direct debits

It’s never fun when your car insurance is due. It can be costly, and if you’re not prepared in advance, you may not be able to afford your cover up front. Most insurers now give you the option to pay monthly via direct debit, but this isn’t the most cost-effective option and can result in you paying more for the same cover.

Interest is often added to direct debit payments, so make sure you check that you’re getting a good deal on your monthly payments. But if you really want to pay monthly and want to avoid your insurance company’s interest fees, consider signing up for a 0% interest credit card and pay for your insurance upfront, and then pay off the card before your 0% ends.

Increase your car insurance excess

If you want to reduce the cost of your car insurance policy, then you could opt to accept a higher voluntary excess when setting up your cover. It’s an obvious tip – the higher your excess, the lower your car insurance premium, so shop around and see how much you can up your excess to save money on your car insurance.

A word of warning, though. If you cannot afford to pay your voluntary excess in the result of an accident, you could be left without a car, and you could face legal proceedings. Make sure you have savings and can comfortably afford your excess, and if you can’t, don’t do it.

There you have it – six great ways to reduce the cost of your insurance and get more from your money. Remember to shop around, make smart decisions and don’t settle for the first quote you receive – the chances are you’ll be able to find a better offer elsewhere!