REDUCE YOUR INSURANCE COSTS

UNLESS our recent driving history has been dubious, most of us expect our insurance premiums to lessen year on year. But recently the drop in annual premiums has become noticeably smaller for some drivers.

Insurers are warning that higher premiums could be something that drivers have to get used to. Among the reasons: the growing number of uninsured drivers whose accidents have to be paid for out of the collective pocket and the litigation culture that has seen victims encouraged to claim for personal injuries as well as damage to their vehicles.

Regardless, motor insurance is a necessity, not a luxury. The rise in the cost of cover makes it even more essential that drivers seek out the most cost effective policies available.

The good news is that you probably can. Insurance costs are based on risk - the higher risk you are deemed to be, the more you pay. The four key factors are:

1. Sex - women are statistically safer drivers than men, so pay around 30 per cent less.

2. Age - ever noticed how you only hear about 'boy racers', not 'granddad racers'? The general trend is that as we get older, we become more sensible, mellower and more experienced in the ways of the road. As a result, older drivers pay less than young ones.

3. Location - city motorists often pay double the premium of those in the countryside. Some cities are considered higher risks for theft and car crime than others, and having a postcode from one of these hotspots can affect your premium even if you live in a quiet village on the outskirts.

4. Occupation - some jobs, such as doctors and journalists, seem to attract bad drivers.

But being sensible, we can't really expect you to change your sex, forge your birth certificate, embark on a new career and move to the middle of nowhere just to save a few bob on your car insurance. Instead, we suggest that you follow this guide and you'll be better off - guaranteed.

1. Phone around for alternative quotes - it's an increasingly competitive market and there's always someone cheaper. Ring at least five insurers and when they ask about other prices, take 10 per cent off your lowest quote. This is the only time that a white lie can be a smart move when it comes to insurance. Don’t rely specifically on comparison websites either. Some big name insurers don’t participate, so you could be missing out on a great deal.

2. Accept a higher excess on your policy. This is the bit that's uninsured. If you have a £250 excess and you have a bump, you'll pay the first £250 of any repairs. It’s risky, but you can save £100 just like that. It may also encourage you to be a safer driver…

3. Reduce your cover. Do you really need fully comp on a 1992 Ford Escort? If your car is only worth a few hundred pounds, third party fire and theft or even just third party can be the way to go. If you’ve accepted a higher excess, then the pay out if the car is stolen may render the extra cover obsolete anyway.

4. Go for a lower-cost car. Cheaper cars with smaller engines can generally be insured for less. Magazines such as Autocar or What Car? will have lists of new car prices with all the insurance groups. The lower the group, the better. A low insurance group needn't denote a poor quality car - leading manufacturers such as Volkswagen are pastmasters at getting low insurance groupings for their cars by making them easy to repair and including good security as standard. Even with the best security, a high performance car will still cost more to insure due to the increased likelihood of it being crashed and its magnetism to thieves.

5. Improve your security. Insurers will generally offer lower premiums for cars that are kept in garages or on driveways. If you don’t have one, ask a friend or neighbour if you can use theirs. Just be sure to give an accurate address of where the car is kept to the insurer. Consider fitting an alarm, too. Most insurers will offer a discount for approved systems.

6. Accept limitations on mileage. If you drive only a small annual mileage, tell your insurer - the lower your average yearly mileage, the cheaper your insurance will be. Be warned; insurers can check MoT test certificates to ensure you haven’t driven twice or thrice the mileage you claimed, so you’ll need to be fairly accurate. But it shouldn’t take long to work out your how many miles you cover each year. You can even check the car’s history yourself.

7. Don't get cover for things you don't need. If your car is insured for work use but used only for private motoring, think about changing your policy. Also consider who is covered. Are there people listed to drive on the policy who no longer need to be there? There's no point insuring your son if he's gone abroad on his gap year.

8. If you drive an older car, ask about low-mileage classic policies. You might be surprised what constitutes a 'classic car' these days. Being a member of a classic car club can also lead to lower premiums from specialist insurers.

9. Take the advanced driving test. Some companies offer discounts for people who have passed the Institute of Advanced Motorists' test. Call the IAM on 020 8994 4403 or check its web site: www.iam.org.uk

10. Drive safe. The quickest way to ensure a higher insurance premium next year is to have a crash this year. Building up a healthy no claims bonus can reduce premiums buy up to 75 per cent. Don’t drive too close to the car in front. Staged accidents, where unscrupulous drivers slam on the brakes to force you into hitting them then claim on your insurance, are more common than you might think.