Car insurance companies calculate your premiums based on how expensive they believe you’ll be to insure: how likely you are to make claims and how costly those payouts will be. Insurance underwriting involves a lot of generalisation and assumption. Insurers use statistics about road traffic collisions and their own figures about claims to assign different levels of premiums to people in different age brackets and occupations, for instance.
But those generalisations may mean you end up stung with high premiums, although you’re a competent, prudent driver and don’t believe you pose much risk to an insurer. A driver under 25 working as a builder could see annual premiums above £3,000, solely on age and occupation.
You could individually petition insurers and tell them just how responsible you are behind the wheel. Maybe you could take an insurance executive for a cautious spin in your dependent, practical Nissan Micra, just so you’re not lumped in with the speeders and night-time drivers in your peer group.
Luckily, there are ways to personalise your car insurance premiums and get rewarded for good driving, no matter what your age and profession.
Telematics insurance policies
The best way to make your premiums match your driving performance is to pursue a telematics insurance policy. These policies install a black box in your vehicle, a computer which records, stores, and transmits data about your driving to your insurer. A black box will note how often you drive and at what time of day; what type of roads you use; how quickly you accelerate; how sharply you make turns; and if you get into collisions or close scrapes.
Stick to daylight hours, stay off motorways, accelerate gradually, and slow down to take turns while the black box and your insurance company are watching. You’ll be rewarded with lower premiums.
But be aware that telematics policies can come with higher initial costs until you’ve proven your driving prowess. The savings they deliver can be limited for older drivers in safe occupations who have already demonstrated competence, logging years without claims or motoring convictions.
But if you’re a driver under 25, raging against the sky-high premiums you face because your peers are careless behind the wheel, the savings you could find by demonstrating you’re not “like other kids” could be substantial. Reportedly, a telematics policy can shave a quarter off the annual insurance costs for drivers under 25.
Low mileage
Back boxes will record your mileage and reward you for avoiding trips, but even standard insurance policies will ask for your estimated annual mileage. This equation is simple: the less time you spend behind the wheel, the less time you’ll have to be involved in a collision and, thus, the less likely you are to make a claim and cost your insurance company money. Drive less frequently, and you’ll see lower premiums.
No claims bonuses
Go a year—or with an accelerated policy, 10 months—without making a claim on your policy, and you’ll earn a no-claims bonus (NCB), a discount on your car insurance policy. According to the British Insurance Brokers’ Association, a year’s NCB is worth a 30% discount on car insurance premiums. Make it to two years, and you can see a saving of 40%, and with five or more years of NCB, you could be looking at a discount of 60-65%.
The best way to avoid making claims is to be a safe driver and not cause accidents. But of course, you can’t control the behaviour of other motorists, and you could lose your NCB if you’re involved in a collision that’s the other driver’s fault if your insurance company isn’t able to recoup all their costs for repairing your vehicle from that driver’s insurer.
And, of course, accidents aren’t the only reason for making claims. Misfortunate can befall your vehicle when you’re not behind the wheel. A branch could fall on your car, shattering your windscreen. A thief could snatch your vehicle from the street. Luckily, you can protect your NCB with your insurer for an additional cost, ensuring it remains in place even if you have to make a claim. However, the fact that you made a claim, if it didn’t spend your NCB, will nudge up your premiums for the following year.
The best way to protect your NCB is by protecting your vehicle, even when you’re not driving. Park it in a garage whenever possible to shield it from the elements, install security measures to deter would-be car snatchers, never leave valuables in your car, and use a hand brake when parking on an incline. Being a model motorist continues even after you’ve removed the key from the ignition.
