How to save money on your insurance

Insurance provides peace of mind in many areas of life, but it can be costly. These simple tips should help you save money on any kind of insurance policy.

Shop around

Shopping around can save you a substantial amount of money on insurance policies. Comparison sites such as comparethemarket.com are hugely helpful. However, not every insurance company will be listed. It pays to do some of your own research too.

Make sure you’re comparing like-for-like insurance policies as you could find a cheaper deal, but be careful as it might not offer the right level of cover. Once you’ve got a good price, don’t be afraid to pick up the phone and haggle – you might get more of a discount for your trouble.

Pay for your policy annually

Direct debits are convenient, but they can end up being more expensive than paying for your policy annually - even though this means a big spend to start with. If you plan ahead, you could start saving for next year by putting monthly payments in your own savings account, so the money is ready when you renew your policy next year.

Adjust your cover

Once you’ve taken out an insurance policy, it’s easy to forget about it, paying for the same level of cover, year after year. It’s a bit time consuming, but regularly adjusting your cover ensures you have the right level of insurance for your circumstances. This sometimes means you’ll pay a bit more – if you need to add a big new purchase to your home insurance policy, for example. But adjustment can also save you money: your car will probably decrease in value each year which could change how much you pay or if you get married or enter a civil partnership, joint life insurance could be cheaper than two separate policies.

Increase excess levels

To discourage people from making fraudulent claims, insurers set standard excess levels on every policy. Voluntarily increasing the excess can save you money on your premium, but you’ll have to pay more towards any claim you make. If you have a no or low-claim history, this could be a smart move. As long as you’d be able to pay the excess comfortably in the event of a claim, it’s a simple way to save money on your policy.

Don’t duplicate

If you have more than one insurance policy, it’s crucial to check the small print to avoid overlapping cover. Common examples include breakdown cover already provided by a motor insurance policy; buildings insurance paid by flat owners who are already protected under the freeholder’s policy; legal cover can be covered in your life, car and house insurance; and specific gadget insurance that is already included in a home contents policy. Ending up with double – or even triple – insurance is a waste of money because you can’t claim twice.

Avoid auto renewal

Just like direct debits, the auto renewal of an insurance policy is convenient – but it could be costly. Not only could your circumstances change, making an existing policy invalid, insurers constantly offer new deals and incentives for switching to their products. Shop around every year to make sure you’re getting the right cover at the best possible price.