[00:00.00]Shop around for the best car insurance
[00:03.16]Shopping around for motor insurance really pays.
[00:06.82]You might find a quote for half your present premium if you just took time to make a few telephone calls.
[00:13.19]Research by Telesure,one of the new telephone-based insurance brokers,
[00:18.26]found differences in premiums of more than 100 per cent in some cases,and 30 or 40 per cent in many.
[00:25.57]That can easily mean a saving of ￡100 or more."I think that rating,overall,is very random,"says Simon Ward,Telesure's chief executive.
[00:36.15]Insurers set their rates in line with their own claims' experience.
[00:40.59]So,if your insurer has had a lot of these from drivers with your model of car,
[00:45.87]or living in your area,your premiums could rise.Another insurer with far fewer claims would offer you a much better rate.
[00:54.13]But if your renewal is due next month,and you start to shop around now,
[00:58.59]you cannot rely on getting the same rate in a few weeks.
[01:01.75]Premiums can change significantly from month to month,let alone year to year or between companies.
[01:08.81]There are many loyal (or lazy) customers who renew every year with the same company assuming that,
[01:14.55]if their premiums are rising,other companies will be raising rates in the same way.
[01:19.91]Unfortunately that is not necessarily the case:
[01:23.49]your own insurer will have no compunction about bumping up rates for existing customers,
[01:28.71]while a rival might be keen to attract new business and would make you a much better offer.
[01:34.30]Most insurers will accept transferred no-claims bonuses,so you do not have to feel tied.
[01:40.78]The motor insurance market is just emerging from a period of steep price rises-more than 20 per cent a year-
[01:48.09]to compensate for horrendous claim rates due to crime and the recession.
[01:52.80]The industry is also changing shape as the arrival of Direct Line,the cost-cutting,
[01:58.47]telephone-based direct insurer,and its imitators force the old giants of the insurance world to re-think their strategies.
[02:07.11]Some sections of the motor insurance industry are now murmuring about a price war.
[02:12.52]That could be exaggerated,but companies moving into the direct insurance market need to grab a big-enough share of the market to justify the huge investment in computer systems,
[02:24.01]staff training and so on.
[02:26.42]The easiest way to build up market share is to offer low premiums,
[02:31.22]even if that means making a loss for the first few years.
[02:35.09]And if direct writers are lowering premiums,the rest of the industry will fight back.
[02:40.84]So,consumers could benefit,at least in the short term.
[02:44.68]Indeed,things are looking better for car owners than they have for some time.
[02:49.14]If insurers want to avoid a price war,they may start trying to compete on other factors,
[02:55.54]such as service-promising to offer smoother claims procedures,for example.
[03:01.05]This appears to be the direction being taken by the latest entrant to the direct market,Guardian Direct.
[03:07.40]It is,however,far less easy for consumers to shop around for good service than for low prices.
[03:14.04]The proof of good service really comes when you claim-which,with any luck,will be long after you have made your choice.
[03:21.59]There can be some confusion between direct insurers and telephone brokers,
[03:26.99]especially as both tend to advertise widely with cheap insurance offers.
[03:31.72]Direct insurers are those which sell only their own policies,and only directly to the consumer over the telephone.
[03:40.47]They cut out third parties,which reduces administrative costs,and should allow them to charge less.
[03:48.10]Telephone brokers have access to quotes from many different insurers,
[03:52.59]and use a computer to find the lowest for you.
[03:55.94]Some of them deal with a select panel of a dozen insurers,while others quote for more than 100. |