Grab pole position for car cover

The cost of motor insurance is soaring, but you can still find huge variations in quotes if you shop around.

Car insurance premiums are rising, and fast. Market analysis firm Datamonitor predicts the cost of motor insurance will leap 25 per cent this year.

Money net

Car insurance premiums are rising, and fast. Market analysis firm Datamonitor predicts the cost of motor insurance will leap 25 per cent this year. This will only add to the extra insurance costs already being shouldered by motorists. Already this year's premiums are up sharply from last year, with some brokers estimating they have climbed by around 20 per cent.

As figures from the Association of British Insurers (ABI) show, insurers have faced a huge increase in the cost of claims in the past few years, while the industry as a whole has been making a loss on the car cover business. There are a number of factors behind the high level of claims, says the ABI. One of these is the trend towards increased litigation.

But the good news for consumers is that the car insurance market is still highly competitive. Many insurers are going out of their way to offer low premiums and a convenient service. Shopping around for your motor cover certainly pays. Even though you can save significant sums by getting a series of quotes whenever your insurance comes up for renewal, the annual trawl between providers can be a headache. While giving your details to just one insurer over the phone can take around 20 minutes.

And things rarely go smoothly. Drivers frequently report being passed to different departments while on the phone to one insurance company or broker. Having given their details to one member of staff, they then have to repeat the whole set of answers yet again.

In theory buying car insurance on the internet is quick and easy. But in practice this can be another frustrating experience. It can take up to a minute for each page of an application to download, leaving applicants tapping their fingers and wondering how long it will be before their screen freezes, forcing them to start all over again. Drivers sometimes use the "quick quote" services offered by some car insurers on the internet, only to find that when they go through the long version of the application the premium is much higher. Others invite you to fill in an application online, but when you want to take out that insurance you have to repeat the information to a real person or even put it in writing.

Broker People's Choice says an independent survey showed 69 per cent of quick quotes, or indicative quotes, were higher when it came to a final quote, and this figure is even higher so far this year at 72 per cent. Using a broker such as Swinton or People's Choice can save time. It will search a number of companies to get you the best quote, and claim itgives competitive quotes for a wider variety of people than a direct insurer. "This is because a broker places a risk with a range of insurers, each of whom specialises in one particular type of risk, for example, safe drivers, those with convictions, or driving older cars or newer cars, young additional drivers etc," says Philip da Silva, managing director of People's Choice.

Although direct insurers widen their underwriting criteria to avoid being accused of "cherry-picking", when the business is outside their specialist area the quote they offer is often not that competitive, he says.

When making a claim, there are advantages in a policy bought through a broker. A broker has a duty of care to its client, the insured, to ensure they get good service from an underwriter, and a broker can use its bulk-buying muscle to make sure clients are dealt with fairly when they claim. But using a broker does not guarantee the best-value car cover. They cannot get quotes from every insurance company, and typically choose your deal from their panel of around 10 companies. Direct insurers such as Eagle Star Direct are never included, even though they often offer the cheapest deals around.

"By going to the direct insurer, you don't have to pay for the commission the broker charges, so there are savings," says Dominic Burch of Direct Line. Mr Burch says over 90 per cent of DirectLine's customers are renewing their car insurance policies.

Among ways to keep costs to a minimum are: Parking your car in a locked garage each night, or off the road and on a driveway; keeping your mileage within limits ­ many insurers charge lower premiums if the car is driven less than 10,000 miles a year. In many cases you can pay a higher excess on each claim -- £100 instead of the more standard £50 ­ and save around £30 a year in premiums.

Before buying a car, consider the cost ofinsurance. Faster cars attract much higher premiums, particularly for men under 25. Restrict the number of people who drive your car ­ putting teenage children on your insurance will increase the cost dramatically. Completing a Passplus driving course is another way of keeping premiums down. The scheme, which was set up in 1995, involves a course of six driving lessons with an approved driving instructor, and covers driving on motorways, rural roads, in different weather conditions and night-driving.

Successful drivers earn a certificate issued by the Driving Standards Agency. Sixty per cent of motor insurers support the scheme, giving drivers with the Passplus certificate a discount of up to 20 per cent on their premium.

Useful numbers: Passplus: 0115 901 2633; ABI: 0208-600 3333; Peoples' Choice: 0800 11 22 33; Swinton: 0161 923 4411; AA Insurance: 08705 332211; Age Concern: 08547 125816; Avon: 01789 414211; Axa: 0800 747576; CIS: 0800 868500; Barclays: 0870 600 1414; Cornhill: 0800 435 340; CSMA: 0800 669944; Direct Line: 020-8686 2468; Eagle Star: 0800 333800; Irontrades: 01642 22 74 24; Norwich Union: 0800 888111; Pearl: 08456 101112; Prudential: 0800 300 300; Royal & Sun: 0800 300 220

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Recruitment Genius: Online Customer Service Administrator

    £16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

    Recruitment Genius: Digital Marketing Executive

    £18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

    Day In a Page

    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

    Everyone is talking about The Trews

    Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living
    Increasing numbers of homeless people in America keep their mobile phones on the streets

    Homeless people keep mobile phones

    A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
    'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

    'Queer saint' who bankrolled artworld giants

    British culture owes a huge debt to Peter Watson, says Michael Prodger
    Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

    Pushkin Prizes brings countries together

    Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
    14 best kids' hoodies

    14 best kids' hoodies

    Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
    Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

    The acceptable face of the Emirates

    Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk