Drive around for better deal on premiums

Time spent ringing all insurers to get best motor insurance deal will pay off, writes Laura Slattery.

While consumers wait for the Government to implement the recommendations of the Motor Insurance Advisory Board (MIAB) and for insurance companies to pass on their profits to motor policyholders, there is very little they can do apart from shout "hurry up" or develop a new-found love of public transport.

Some insurers, including Axa, Royal & Sun Alliance and FBD, have already implemented cuts, while rates for Premier Direct, which is owned by Bank of Ireland, are due to fall in September, and Allianz has said it will reduce rates by 5 per cent from October.

So far, Hibernian is the only company that has said it will link premium cuts to the new penalty points system.

It will be given access to drivers' records by the Minister for Transport, Mr Brennan, and give discounts of up to 10 per cent on premiums for drivers who have no points on their record by the end of this year.

In the meantime, while motorists wait for more insurers to act, shopping around for quotes can ease some of the premium-induced pain.

In an Irish Times survey of motor insurance costs, differences between companies for the quotes requested ranged from €172 to a massive €854, depending on the age and gender of the person looking for cover.

The survey includes seven of the main motor insurance companies in Ireland.

Eagle Star was contacted for the survey, but did not respond.

In addition, consumers may source motor insurance through companies including Royal & Sun Alliance, which sells through brokers, and AA Ireland, which is one intermediary serving the market.

In the case of younger drivers, the savings that they can obtain from ringing around are easily enough to dissuade these budding drivers from reverting to their old pedestrian ways.

New schemes for younger drivers have helped, says Mr Mick Murphy, national organiser of the Motor Insurance Justice Action Group (MIJAG).

Hibernian's one-day advanced driver training course for younger drivers, Ignition, gives participants a minimum of 20 per cent off their insurance premiums.

Reduced rates for drivers who complete the course are also available from One Direct, which provides cover underwritten by Hibernian.

Axa's Traksure programme gives premium savings to young drivers who prove they are good drivers by allowing the insurer to fit software in their car that monitors how they drive.

According to Mr Murphy, members of MIJAG who have tried both initiatives have come down 10 to 1 in favour of the Hibernian scheme.

A few years ago, the young driver's plight was even worse than it is now, Mr Murphy says. "In some parts of the country, you would only get a quote from one company, in some cases not at all."

The quotes in the table opposite are based on perfect drivers. "People with any kind of blemish on their record - those people are in real trouble," says Mr Murphy.

In addition, while the lot of young drivers has improved, things have got a lot worse for older drivers over recent years, Mr Murphy notes.

In the survey shown opposite, two companies - First Call Direct and Premier Direct - declined to quote for a male driver aged 22, even though the sample customer had a full licence for two years with a clear record and a maximum no claims bonus intact.

First Call Direct, which is part of the Allianz group, also did not quote for female drivers in this age group.

The cheapest quotes for drivers aged 22 based in Dublin city were from Axa, which quoted €1,689 for male drivers, and Quinn Direct, which quoted €958 for female drivers.

FBD quoted the highest cover for both males and females in this age group.

The good news for its customers, however, is that since this survey was conducted, the insurer has announced a 5 per cent cut off its base motor insurance rates.

FBD, which has expanded beyond its traditional farming community customer base in recent years, is also a good option for male drivers in their late 20s and early 30s, emerging as the cheapest quote for male drivers aged 33, based in Co Limerick.

The cheapest quote for females in this category came from Quinn Direct, which also came out with the most competitive quote for female drivers aged 45 and 56, in both urban and country locations, as well as for male drivers in the age 56 category.

Hibernian and Premier Direct, which gives cover underwritten by Hibernian, quoted the cheapest premium for male drivers aged 45, based in Cork city.

The Premier Direct quotes are based on its new rates, which will come into effect in September.

Although very competitive for younger motorists, Axa was the most expensive for all drivers aged 33 and for male drivers aged 45 and 56.

However, price isn't everything. Making savings in the short term could have a disastrous effect on drivers' finances in the event of an accident.

It is crucial to examine the small print of any insurance policy - sometimes premiums that seem cheap offer only very basic cover or higher-than-average excesses.

In most cases, drivers will have to pay extra for a protected no claims bonus, which normally allows for a fixed number of claims over a certain time period without loss of the all-important no claims bonus.

However, First Call Direct's quotes include a protected no claims bonus which allows policyholders to make one claim - not costing more than €6,350 - and/or a theft claim up to any value without affecting the no claims bonus.

Axa and FBD also signalled that they included some form of no claims bonus protection in their premiums.

Significantly, FBD's policy allows for open driving, meaning anyone with a full Irish licence can drive the insured car, as long as they are within the 25-71 age range.

This may be an "optional extra" with some insurers.

For motorists who don't like the idea of anyone else getting their hands behind the wheel of their shiny new BMW, that might not sound like much of a benefit to them.

But male drivers can get premium reductions if they put a spouse or female partner as a named driver on their policy.

This might seem like an additional benefit that should cost more. However, insurers argue that if a woman is driving the car some of the time, then the risk of the car being involved in an accident is slightly reduced compared to a situation where the car is being driven 100 per cent of the time by the insured male.

Savings in this situation are typically about €25 for male drivers in the aged 45 and aged 56 categories, although at Axa, First Call Direct and FBD, savings of 65 or more can be found.

Quinn Direct does not offer any cheaper insurance to male drivers who add a female partner to their policy, but the added risk of a male driver is reflected in its higher premiums for female customers who put their spouse as a named partner on their policy.