There are big savings to be made on your car insurance premiums. James Ruppert looks at how the game is played and how to be a winner

Is there anything more infuriating than arranging car insurance? Once a year we go through the agony of it all. Gasping at inflated premiums and then coping with the hassle of gathering multiple quotes is all too much.

Is there anything more infuriating than arranging car insurance? Once a year we go through the agony of it all. Gasping at inflated premiums and then coping with the hassle of gathering multiple quotes is all too much.

Often we go for the easy option, a straightforward renewal. We are obviously not trying hard enough. According to Sainsbury's Bank Car Insurance, motorists are paying around £2.26 billion a year too much for comprehensive car insurance, that's the equivalent of £91 for each motorist.

Sainsbury's research during 2003 found that by shopping around for competitive rates, it is possible to reduce premiums by an average 17.7 per cent. The average difference in premiums between the cheapest and most expensive motor insurers was a very substantial 46 per cent.

Robert O'May, car insurance manager at Sainsbury's Bank said: "Shopping around for car insurance can save you hundreds of pounds a year in lower premiums. Also, you don't have to sacrifice the quality of cover for price as you can have both."

The average premium for fully comprehensive motor insurance was £517.32, but the most competitive insurers, which included Sainsbury's Bank, were £91.64 cheaper at £425.68. Sainsbury's also claim to have some extra benefits which include a financial compensation and counselling package for drivers who are car-jacked or injured in a road-rage incident, and a no-claim discount of 70 per cent if there is no claim in the past five years.

It is also one of the few policies where the no-claim discount will not be affected by non-fault claims where the other driver is identified but is uninsured and the cost of the repair has not been recovered.

According to insurance brokers Allen and Allen, insurers actually offer good deals to motorists they want, and charge exorbitant premiums to those they don't. "Insurers cherry-pick the business they want and increasingly refuse to accept some risks at all," says Giles Ashley from Allen and Allen's online brand,

"Insurers target the business they think will be profitable, whether this be older drivers, those with a particular type of car, or any one of a number of different criteria. Motorists that fall outside their risk parameters can often get cover with that firm, but only if they are prepared to pay inflated premiums.

"Why pay more than you have to? The insurance market is still very competitive and attractive rates can be found for most risks if motorists are prepared to shop around. Better yet, shortcut the system and use a broker or intermediary to do the work. They have access to hundreds of rates from different insurers for a huge variety of risks, and can often find the best value for money in a few minutes."

Allen and Allen looked for other examples of rates disparity and found that insurance premiums for the same person on a 1989 Ferrari Testarossa worth £40,000 ran from a mere £870 to a reasonable £1,011. However if a person had wanted to insure a Mini Cooper worth just £15,000 he would have to pay from £462 to a whopping £1,474. Moreover, if cover on the same Mini was being sought by a driver aged 26 instead of 50 the premium range was similarly distorted: from £856 to £1,676.

Giles Ashley has the answer: "It is always a good idea to understand how the game is played. Motorists will continue to pay over the odds until they start to explore the benefits brokers can offer."

But there isn't much brokers or anyone else can do about a potential threat from Europe. Research from Direct Line revealed that under the proposed new EU Gender Equality Directive, young female drivers could see their car premiums rise by £500 per year. At present, car insurance rates are based on a number of different factors including driving history and experience, gender, age, where the car is kept and what kind of car is being insured. The planned EU directive argues that insurers are discriminating against women by using gender as a rating factor.

If the EU Directive became law, the group that would suffer the most would be young female motorists between 17 and 24. Older male drivers over the age of 80 would be the next hardest hit. According to Direct Line research, males over the age of 80 could see rises of £100 on their premiums.

Emma Holyer at Direct Line said : "Our research shows that the public supports the present way insurance premiums are calculated. Introducing this law would be a step in the wrong direction and there really is no need for change."

Let's hope then that no one makes getting insurance more complex and expensive than it already is.

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