You are here: Home - Insurance - News - Understanding -

Eight ways to cut home and car insurance costs

Written by:
In the year to November 2022, the cheapest car insurance quotes rose a hefty 17%. As households navigate the cost-of-living crisis, here are eight tips to get cheaper cover.

With many household budgets under the strain, drivers are urged not to automatically renew car insurance without checking prices elsewhere.

Reena Sewraz, Which? Money expert, said it there are a number of ways to keep down these costs.

She says: “Haggling and switching remain effective ways of bringing down the cost of insurance. It’s important to shop around and compare the rates on offer, as there’s likely to be a great deal of variation between providers for insurance.”

Which? share eight of its top tips to help you get cheaper car and home insurance without having to compromise on cover.

1) Shop around

The ban on the insurance ‘loyalty penalty’ at the beginning of 2022 brought an end to exclusive new customer discounts, but this appears to have contributed to prices rising for some customers.

It’s worth shopping around when a policy is up for renewal. Half (48%) of Which? members who haggled in the first six months of 2022 made savings – an average £56 for car insurance and £54 for home insurance.

There are also likely to be savings available by switching providers. Drivers who didn’t haggle, but had changed car insurers were paying £43 less, on average, than those who stuck with their original provider. Home insurance switchers paid £103 less.

2) Use comparison sites

Some insurers set different prices depending on the method used to get a quote and some comparison sites also offer cash-saving incentives to entice customers.

In December 2022, and MoneySupermarket guaranteed to beat customers’ current car or home renewals or offered to refund the difference, as well as offering a £20 voucher. GoCompare offers free excess cover with car insurance. This reimburses up to £250 of the excess if you claim (excluding breakdown and glass damage).

In October 2022, Which? tested a quote for a 38-year-old Ford Focus Zetec driver and, adding a voluntary excess of £250, reduced the cheapest five quotes by between £55 and £58 – around 12%.

Not all insurers or policies feature on comparison websites, so it is also worth checking directly with the insurer.

3) Time it right

When you search for a new policy can affect the quote you receive. Generally, leaving it until the last minute means insurers are likely to charge more than if you bought cover in advance of the cover starting.

The time of year can also affect your quotes. Which? analysed 33 months of car insurance premium data from Compare the Market (Jan 2020-Sept 2022), and found variations of as much as £50 in the average premium depending on the month you buy, with prices peaking in December and dropping between February and April.

4) Make sure the cover is adequate

Consider whether the cheapest policy you find will actually save you money in the long run. If a policy is cheap but comes with steep excesses or significant exclusions, it could actually cost you more if you have to claim. Check the policy details before buying cover.

5) Adequate cover for your needs

When searching for insurance, choose a policy that fits your needs, and check you’re not paying for extras you might not use or benefit from. As an example, tweak the voluntary excess to see how it will affect the price…increasing it will reduce the premium. Make sure the ‘total’ excess (any compulsory excess plus the voluntary excess) is no higher than what you could afford to pay in the case of a claim.

6) Check the quote is accurate

Check assumptions made about your circumstances when it is time to renew. For example, if your daily commute to work during rush hour has changed you might be driving fewer miles each year.

For home insurance, you may have made a change to your property or the value of your insured contents might have changed.

Informing the insurer of any changes means you get a more accurate price, potentially saving you money.

7) Pay annually if you can afford to

Paying insurance in monthly instalments might be a more expensive option overall. This is because you’re effectively borrowing the year’s premium to repay in instalments. This typically comes with interest, with rates of around 30% APR not being uncommon. If you can afford it, pay annually instead.

8) Try a broker

If typical insurance doesn’t tick all your boxes, perhaps due to your age, the kind of house you live in, a medical condition, or various other circumstances that can make finding insurance difficult.

If you haven’t found a policy to suit your needs after searching online and via comparison sites, it could be worth trying a broker. A broker will find insurers, arrange cover, and can help with renewal and making a claim. They’re usually paid by commission.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and the fresh round of walkouts take place tod...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week

Privacy Preference Center