There has been a lot of coverage in the papers recently about the rising cost of car insurance – there’s even a protest planned about it in Dublin on the 2nd of July. Insurance companies have claimed that this is due to the rising cost of awards and legal fees given out in courts. This is disputed by the legal professions however.
Who to believe? And what can you do about your insurance? Well one thing is to shop around. Never go direct to an insurance company – always use a broker. But more than that, never just go to one broker, ring around a few. And I mean ring, it’s much easier to get a deal when you ring. Get a quote from the broker over the phone and then tell the broker what the quote was from the other (as long as it’s lower) and repeat until you’re sure it’s the lowest possible. Other than that there’s little you can do. Insurance companies all have different risk profiles that they price in but keep those profiles secret.
A more radical proposal would be to take the power out of their hands altogether. At the moment the law states that you must buy insurance from a private provider. This means that companies have a captive market. What if you didn’t have to do that? Why not follow a model like in New Zealand? There your third party insurance is part of your road tax. Better again, it is also priced into fuel so that the more you drive (or the bigger engine) the more insurance you pay for. Sounds fair!
You can still buy more comprehensive insurance but it’s a lot cheaper and it takes the power away from insurance companies who can no longer charge what they like. The only drawback is that the risk is not fully priced in for particularly bad drivers. That could be adjusted for; if your record is bad you may be charged more to tax your vehicle for example.
It’s something to think about – let us know if you dis/agree!