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How to cut the cost of your insurance
How to cut the cost of your insurance

There may be ways you can reduce your premium

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Car insuranceHome insuranceLife insuranceTravel insurancePet insurance

It’s important to get the right level of protection in case the worst happens. However, there may be ways you can reduce your premium – whether for your home, motor, travel, life or pet insurance – without compromising your level of cover.

Renewing your insurance or taking out a new policy can often feel like a chore. It can be time-consuming to trawl around for quotes, check every detail, make sure you’ve got the right level of cover and – even more importantly – ensure that you’re paying a fair price.

But if you don’t do a thorough job, you risk being left exposed and out of pocket should the worst happen.

Whichever type of insurance you’re after – home, travel, motor, life or pet insurance – we’ve compiled a list of suggestions to help you get the best value quote while still making sure you’re fully protected.

Car insurance

With the cost of petrol at record highs, everyone is looking for extra value when it comes to motoring. Check out our suggestions for reducing your premium.

Keep on learning: if you’re a new driver, completing an advanced driving course like Pass Plus could help reduce the cost of your cover.

Make your car unattractive to thieves: approved car alarms, immobilisers, tracking systems and steering wheel locks are all great deterrents – and fitting them can often result in a cheaper quote.

Watch where you park: parking in a driveway or garage rather than on a road means your car is less likely to be hit by other vehicles or broken into while parked – if you mention this when getting your quote, you could get a cheaper premium.

Set a voluntary excess: your voluntary excess is the amount you pay towards any claim you make on your car insurance, in addition to any compulsory excess that may apply. For example, if your voluntary excess is £100, you would pay the first £100 of any claim and your insurer would cover the rest.

Couple with car

Generally, with every insurance product, the higher your voluntary excess, the cheaper your insurance. But remember, it’s important that you can comfortably afford your excess – so don’t increase the amount if you’d struggle to pay it in the event of a claim.

Attention to detail: apart from the fact that giving incorrect information may lead to any subsequent claim being refused, giving an insurer accurate details can add up to significant savings. For example, you may be charged a lower premium if your annual mileage is low, so it pays to check this and not insure yourself for more miles than you’ll drive.

"Generally the higher your voluntary excess, the cheaper your insurance"

Named drivers: think carefully about your named drivers and only add them if you really need to, as they may make your policy more expensive. Equally, only add named drivers for as long as you need to – don’t add them for a full year if they’re only going to use the car over a few months.

Time for a change: if you’re buying a new car or are thinking of making some changes to the one you have, remember that certain features can increase the cost of your insurance. As a general rule, try to avoid large engines, sports models, or modifications that change your car’s appearance or increase its performance.

Home insurance

Protecting your possessions and the roof over your head is essential – but that doesn’t mean you need to pay over the odds, especially when so many other household bills are increasing.

Buy together: you often receive a discount for buying your buildings and contents insurance from the same company. Keep an eye out for online discounts, too.

Get the right level of cover: when working out the value of your possessions for a contents insurance quote, try to be as accurate as possible. If you underestimate and you won’t be fully covered; overestimate, though, and you may pay more for your premiums. It’s a good idea to make an inventory to help you cost your total contents and add a little extra for items you may have missed.

Make your home safe: fitting security alarms, window locks, door locks and outside lights can cut the cost of your insurance by making your home less appealing to would-be burglars – just remember to mention these when obtaining a quote.

Girl on sofa

Similarly, reducing the risk of damage to your house from fire, water or the weather can help. Fit fire alarms and extinguishers throughout the house, keep your heating systems, wiring and pipes in good working order, stop loose objects blowing about in the garden, and cut down trees if they grow too close to your property for comfort.

Get to know your neighbours: join your local neighbourhood watch scheme – it’s a great way to help build a safer community for everyone and many insurers will take it into account when giving you a quote.

"Work out the value of your possessions as accurately as possible"

One payment pays: if you can afford to, paying for your insurance (whatever the product) with a one-off lump sum is usually cheaper. Monthly payments can help you budget, but in total you may pay more for your policy.

Life insurance

It may not be a priority when you’re young, free and single – but once you have children, get married or take on large financial commitments (such as a mortgage), it’s important to know your loved ones would be provided for if the worst happened.

Do your research: there are lots of different types of life cover. Your circumstances will influence which type is best for you, so make sure you take the time to think carefully about your choices.

For example, a joint policy for you and your spouse may be cheaper than two separate policies, but if it pays out on the death of the first policyholder, this could leave the second person uninsured and struggling to find affordable cover later in life. Similarly, choosing a renewable policy (where the price is regularly reviewed) may be cheaper upfront than a guaranteed policy (where your premium is fixed), but a guaranteed policy may be better value for money in the long term.

Family on beach

Plan ahead for future savings: when you buy life insurance, asking for it to be ‘written in trust’ means that in the event of a claim the money will go directly to the beneficiaries you’ve named, without the need for probate. This also means the proceeds from the policy don’t form part of your legal estate, and therefore are likely to be exempt from inheritance tax. It’s free to do – just ask for a form from your provider.

Quit and save a packet: not only will it do wonders for your health – giving up smoking can also reduce the cost of your life insurance quote. The same applies for excess drinking, so if you’ve kicked a bad habit for 12 months or longer, remember to tell your insurer.

"Giving up smoking can reduce the cost of your life insurance"

Knock pounds off your quote: much like smoking and drinking, being overweight can increase the cost of your life cover. Losing a few extra pounds can make you feel great, live longer, and save you money.

Travel insurance

We all look forward to getting away from it all – whether it’s an annual family holiday or a quick city break with friends. Follow these suggestions so you can focus on enjoying your holiday, knowing you’re fully covered.

Travel around: most people book their travel insurance at the same time as their holiday from their travel agent or tour operator. This may be convenient but it can also be costly – shop around to find the right level of cover at the right price.

Make a year of it: if you’re planning more than one trip away in the year, an annual policy could work out cheaper than buying several single trip policies.

In the sea

Travelling companions: if you’re travelling as a family or group, check to see if a single policy that covers all of you is better value.

Pet insurance

Any animal lover knows that getting the best care for your four-legged friend can be an expensive business. Here are some ideas for protecting yourself from the worry of vets’ bills, while keeping costs on a tight leash.

Prevention is better than cure: keeping your pet in top condition with regular health checks could reduce your pet premiums with some insurers. Pre-existing conditions can’t usually be claimed for and an unhealthy pet may cost more to cover.

Girl with cat

Don’t forget to neuter: with some insurers, getting your cat or dog neutered could also make your pet insurance cheaper because of the associated health benefits. Neutered pets are less likely to suffer from hormonal or behavioural problems and certain illnesses, and they’re also less likely to wander off or get injured in fights while looking for a potential partner!

Micro chipping: some insurers may look favourably on micro-chipped pets. Your cat or dog is more likely to be returned to you if it goes astray, so insurers are less likely to need to pay out for things like ‘lost’ posters, advertising and reward money.

Animal-mad house: if you have more than one pet, putting them on the same policy could make better financial sense than taking out separate policies. Many insurers offer discounts if you insure more than one pet.

Your insurer may not pay a claim if you do not answer all questions truthfully, accurately and completely to the best of your knowledge when applying for your insurance and when making a claim.

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Links to external websites are for information only. Virgin Money receives no income from them and accepts no responsibility for the website content. The information in this article is correct as at 5 December 2011.

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