Did you know that often one of the first outgoings we cut back on when in financial turmoil is insurance?
In fact research by the Social Market Foundation (SMF), supported by Fair By Design, found that “insurance is becoming increasingly unaffordable for those on low incomes as they are charged ‘a poverty premium’ – meaning they pay more for insurance cover due to reasons they cannot control”.
The SMF also pointed out that the phrase “too poor to insure” was trending online recently.
MoneyMagpie are here to round up the best ways to save on your insurance policies with our four top tips to guard against insurance draining your finances during a cost-of-living crisis.
Keep an eye on those auto-renewals
In the modern world we are all increasingly busy and fatigued by bureaucracy and admin. Therefore we can all be guilty of letting our insurance policies auto-renew without checking that we are still getting the best deal.
However, there is a new free service called Rightly that can help with this.
Rightly helps you automatically organise all your insurances and when they renew, allowing you to turn off auto-renewals and so get a better price, to haggle your price without picking up the phone and reminds you the cheapest day to get a price comparison using any price comparison service you want.
Try it here.
Make sure you aren’t covered by other policies
Did you know that you are covered with certain banks for insurance any way? There are lots of such “insurance” policies that we don’t realise we have as UK consumers. Also, any savings under the value of £85,000 are covered under the Financial Services Compensation Scheme (FSCS).
Again, this is basically a form of insurance, and one that many people didn’t know they had.
What even fewer people probably know is this cover also extends not only to building societies and credit unions, but also to funeral plans, investments and pensions too.
Best of all, if the company that you have your actual insurance policies with goes belly up too, the FSCS also covers that.
The same can also be said for travel. Make sure that you aren’t already covered through the company that you booked the trip through.
Shop Around
Cheap car insurance is not necessarily the best car insurance, but there are a number of things you can do to lower your insurance risk and get cheaper car insurance.
The more time and research you put in to obtaining quotes, the more likely you are to get a better deal.
This is especially important if you’re over 70 or under 25, and at the first year renewal when premiums can go up significantly.
If you have the time, get quotes from at least two comparison sites and use insurers and brokers that don’t feature on comparison sites.
Remember, cheapest is not necessarily best. Get the right cover or your policy will not pay out when you need it. Compare like for like – if you’re only looking for fully comprehensive deals, you can use the Defaqto comparison system.
You could also try a broker to see if they can get the same cover at a lower price – it’s free to ask.
Remember, once you find a deal anywhere, go back to your current insurer and ask them to beat your best quote.
Try and avoid monthly payment plans
High insurance costs might make monthly bill-pay an attractive option, but you pay for the convenience with an add-on fee. For example, it’s usually cheaper to pay for your car insurance yearly rather than monthly.
So, avoid these extra charges, and get billing every 6-12 months. Ask for auto-billing to save even more money. If you feel nervous about large bills, set up the monthly bill-pay.
Divide the premium by 12 and deposit the amount into a savings account every month. This will make sure you have the money ready in time.
