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If everyone promises the lowest car insurance prices, which one is telling the truth?

Car insurance prices are not necessarily fixed. Very often you can get exactly the same cover from exactly the same company for exactly the same motorist for prices which can vary as much as 50% or even more. How can this be? Simple. We are all too trusting, and very often accept the first price that we are offered. Saving a great deal of money on car insurance can often be surprisingly easy if you just follow a few simple guidelines.

Change providers regularly

Insurance companies recognise that once a motorist signs up for a policy with them that motorist is likely to stay with them for, on average, five years. This will be despite the fact that almost inevitably the premium will rise considerably over those five years. It is therefore to the insurance companies'considerable advantage to attract new clients from other companies, even if it means giving those clients substantial discounts to attract them in the first place. After the first year of course those discounts will disappear and you will be offered the standard premium, plus any increases that have taken place over the preceding 12 months. You need, therefore, to ensure that your old policy is not renewed automatically; many insurers get you to agree to automatic deductions in the future from your credit card and once payment has been made it is very very difficult to reverse it. Refuse any attempts to persuade you to agree to automatic renewals, and that way you will be free to decide who to deal with when you're next renewal becomes due.

Compare the comparers

It is a fallacy that all price comparison sites will give you the same quotations for identical policies. They all receive a commission for sales or enquiries generated through their sites and these are often negotiated individually with the insurance companies they deal with. Some comparison sites have more clout with particular insurers than others, and some insurance companies actually own or partly own the major insurance price comparison sites so they can have a vested interest in pointing you towards their own products or, alternatively, quoting higher prices for competing products. You should therefore make sure that you check out more than one price comparison site, at the very least.

Check the policy details carefully

Many insurance companies are very good at quoting you the lowest possible price but they make up for this by charging outrageous fees for extras. For instance, if any of your details such as address, occupation, accident record, or even parking arrangements for your car change during the course of a policy it is essential that you inform your insurance company since, if you fail to do so, they can, and frequently do, refuse to meet your claim in the event of an accident or other claimable event. The problem is that some of these companies charge fees of up to £120 or more just for registering your changed details, and some of them may even charge you an additional premium if they feel that their risk has been increased. Other insurance companies however may charge a nominal fee or even nothing at all. You need to be aware of these potential charges particularly in view of the fact that the majority of people do in fact have at least one change in circumstances per year.

Do not fall for the 'protected no claims discount' scam

Many insurance companies charge extra for you to protect your no claims discount in the event of a claim. Most people think that this means that their premium will not rise if they have an accident or other claimable event but this is simply not true. The insurance company will increase the basic premium at the next renewal, sometimes considerably, so although the no claims discount will stay the same the total amount payable will still rise.

Sadly we are to a considerable extent at the mercy of insurance companies who do not always act in a completely ethical manner although they do almost inevitably stay within the law, which is an entirely different matter altogether. Practices such as accepting commissions from claims companies, or from repair companies on their approved list, have lost them a great deal of trust, and quite rightly. You owe it to yourself to minimise your premiums by whatever legal and ethical means are at your disposal.

Copyright Pamela Derbyshire 2012