Motorists take evasive action as premiums go into overdrive

Emma Lunn shows how to find a better deal as the price of insurance accelerates

Applying the brake on higher car insurance costs is no longer just a sensible response to an uncomfortably fast ride; it has become the financial equivalent of an emergency stop.

Applying the brake on higher car insurance costs is no longer just a sensible response to an uncomfortably fast ride; it has become the financial equivalent of an emergency stop.

In the last six months of 2004, the average annual premium for car cover rose by 25 per cent - from £473.05 to £589.54, according to new research from insuresupermarket.com, the comparison web- site for financial products.

Hardest hit will be the 40 per cent of drivers who stick with the same provider, instead of switching to a more competitive policy, says confused.com, another insurance-comparison website. They don't have to be, it adds, for today it couldn't be easier to cut costs on car cover by scouring the market for a new deal. An average saving of £150 is possible: all you need is a computer or telephone and a spare hour.

It's impossible to draw up a "best buy" table for car insurance, as different firms use different variables to calculate the risk posed by each driver and the premium they should pay as result. So it will be worth trying a handful of companies to start with.

If you have internet access, try the price-comparison websites, which sift through the details of more than 100 insurers in the UK. You will be asked a number of questions - ranging from at least 20 to as many as 70. These allow insurers to price your risk as a driver.

As a rule, the more questions, the more accurately the insurer can assess you, but some categories stand out. "The most important ratings are your driving history, the [make of] car and where you live," says Emma Holyer at insurer Direct Line.

"Mileage is also a factor but really only makes a difference if you are driving a lot. If you do 20,000 miles a year or more, you're looking at about £50 a year on top."

Your job and status can bear heavily on the premium too. Many insurers price doctors and civil servants, especially those who are married, as lower risk. Statistics show that these people have a general tendency to be safer drivers than the rest of us. This is believed to be the result of their more solid careers, while marriage is considered to have a calming effect on people's temperaments.

But, here again, attitudes will vary between providers. For example, a 31-year-old single female journalist living in central London and driving a Ford Ka is quoted £419.95 from the AA. She would pay more than £80 less with the same firm, £333.36, if she were a doctor. But More Th>n's quote of £303.57 is the same regardless of occupation.

And if the same woman were married, the AA would drop her premium to £386.08. Again, More Th>n sticks to its original price.

Some insurers exclude certain professions. Esure will not cover presenters or performers in film, TV, radio or music, while the Halifax and Barclays refuse to cover professional sportspeople. In both cases, this is down to a risk of higher claims.

There will be plenty of other factors to influence your premium. A speeding conviction might raise the cost by £15, but adding an older driver, such as a parent, or increasing the excess on your policy can reduce it by 12 per cent.

Amid all these variable costs, there is one factor that you can always rely on to work in your favour: a no-claims bonus.

The more years you drive without making a claim, the greater your NCB and the cheaper the premium - as much as 65 per cent off with five years of claims-free motoring, says Ms Holyer at Direct Line.

One increasingly popular manoeuvre over the past few years has been to pay extra on a motor policy - usually between 6 and 17 per cent - to insure your NCB against any claim. As Richard Mason of insuresupermarket.com points out, that option can seem attractive because a minor claim of around £500 for a prang will wipe out your NCB at a stroke and probably increase the premium by more than 50 per cent.

As a rule, this protection is worth it if you have an NCB going back five years or more, adds Ms Holyer. "When you consider this gives you a 65 per cent discount, it makes sense."

Protecting NCBs has become a British preoccupation. A third of drivers now fork out for the damage themselves rather than making a claim, says More Th>n, with the average driver prepared to pay £235.

Another way to cut the cost of car cover is to pay in a lump sum upfront instead of in 12 monthly instalments, where the insurer is in effect giving you a loan and will charge more. Insurers say customers who pay by instalments are also more likely to default, so the cost takes this into account.

I NSURERS PUT TO THE ROAD TEST

Quotes for single, 35-year-old female nurse living in central Bristol and driving a three-year-old Ford Focus 1.4 16v CL. The car is parked on the street and used for social purposes and travel to work (9,999 miles overall). The driver has a clean licence, three years of no-claims bonuses and pays £100 voluntary excess. The cover is fully comprehensive.

Provider: Annual premium

Tesco: £321.30

Direct Line: £354.90

Churchill: £415.80

AA: £417.30 (£365.14 online)

Sainsbury's Bank: £445.22