Women's car insurance
Women drivers should brace themselves for a sharp increase in car insurance premiums when new laws come into effect in December 2012.
Female motorists have traditionally enjoyed much lower car insurance premiums than their male counterparts, due to the fact they are statistically less likely to make a claim. But under a new EU Gender Directive, due to be introduced on 21 December 2012, insurers will no longer be able to use gender as a factor when pricing insurance.
The Directive will affect not only motor insurance, but also life insurance, income protection and critical illness cover, as well as annuities.
According to research by the Labour Party, the changes could add on as much as £362 to the cost of women's car insurance premiums, equivalent to around £30 extra a month.
Analysis of more than 16 million car insurance quotes over the past year through MoneySupermarket.com reveals car insurance prices have fallen by 10.6% over the past year, with average premiums now standing at £478. This is down from a peak of £554 in April 2011.
Owing to the EU Gender Directive, these falls are likely to provide only a temporary reprieve for women, who should start thinking now about how they can reduce the cost of car insurance cover when the new changes come into effect.
How to keep your car insurance premiums down
There are plenty of things women motorists can do to reduce the cost of their insurance.
Shop around
The most important is to make the time and shop around to compare prices, as there can be significant variations in the premiums different insurers will quote you.
You may find you can offset the increase caused by the gender legislation simply by switching insurer when your car insurance policy is up for renewal. The easiest way to do this is to use a comparison website.
Get your mileage right
When getting insurance quotes, make sure you get your mileage right.
If you overestimate the number of miles you drive each year, you could end up paying more for your cover than you need to. Work out how many miles roughly you do a week and multiply this by 52 to give you a yearly total. The lower your mileage, the less your premiums will cost.
Increase your excess
Another way to lower your premium is to increase your excess, which is the portion of any insurance claim you must pay yourself.
But this should be done with a certain amount of caution as in some instances it can prove a false economy. If you need to make a claim you will have to pay the excess, so make sure it remains affordable.
It is also worth playing around with different excesses when you are getting your quote, as increasing the excess by £100 may not knock £100 off the premium, so you may decide to pay slightly more now to keep the cost down in the event of a claim.
Improve your car security
You can also reduce insurance costs by taking steps to improve your security with insurer-approved security equipment, such as a steering wheel lock or an immobiliser. Keeping your car in a locked garage, if possible, is also likely to result in lower premiums.
Don't modify your car in any way, either. Boosting the value of your car by fitting alloy wheels or an expensive stereo can increase the chances of the car being stolen and in turn result in higher insurance premiums, so if you want cheap car insurance you should keep any changes to a minimum.
Fit a black box
If you are a younger driver or have a very low annual mileage, you may want to consider going for a telematics-based insurance policy. Premiums are often lower for this sort of cover, as premiums are based on the individuals' own driving behaviour.
This is done by the insurance provider fitting a 'black box' device to the car to measure acceleration and braking, as well as mileage and what time of day the car is used. The better the driving, the higher the chance of premium reductions when the insurance policy is renewed.
Pay your premium in full
Finally, if you can afford to, pay your premium in full upfront. If you opt to pay monthly it will cost you more, as the insurer will charge you interest which could bump up the total cost of the premium by as much as 20%.
The content on this page is supplied by MoneySupermarket.com.
