Car insurance is a considerable fixed-cost item for many people. Comes with it is a required financial responsibility certificate in Ohio. But not so fixed that you should not look back. ‘Shopping every year really pays off’, says Suzan Samson, car insurance expert.
Although motorists have driven fewer kilometers in recent months, and therefore there have been fewer collisions, this development does not yet lead to lower premiums for car insurance. A tour of our car editors in the insurance industry recently brought this to light.
“But that does not alter the fact that you can still save on your insurance,” says Suzan Samson. She is a car insurance expert at the independent comparison website Independer. “Car owners are largely in control of their savings. It is really wise to review your car insurance at least once a year, because it may well be that you pay less premium elsewhere or that your own insurance can be cheaper.”
According to Samson, the Dutch often do not think about what is possible. “We are a people of certainties and like to cover our risks with good insurance. You can’t ignore car insurance, but more changes than you think. For example, the smallest changes in your personal situation can already lead to a different premium. But also, for example, adjustments at the insurance companies.”
Sounds interesting, but where do you start? With these six tips, you can be sure that you do not pay too much.
Tip 1: Check your coverage
Samson: “It’s smart to think carefully about what kind of coverage you really need. Are you going for all-risk, for limited hull or for the third-party insurance, the cheapest version that only covers civil liability? The choice depends mainly on the age of your car. We usually use the following rule of thumb: with a car younger than five years it is wise to choose all-risk. If your car is between 5 and 10 years old, you are well off with a limited hull and for cars that are older, we often advise you to choose WA. As your car gets older, you can save by adjusting your coverage.”
But how much does that make a difference? For this time we take a random 35-year-old man from Randstad as an example: to insure his Volkswagen Golf from February 2020, he pays (with 5 damage-free years) at least 20.74 euros for a third-party coverage, while an all-risk policy starts at 71.77 euros. Samson: “Those are big differences! Another good tip: also consider the extent to which you are dependent on your car: for example, do you have little savings but do you need your car every day? Then it may make sense to take a higher coverage so that you are better insured if things unexpectedly go wrong.”
Tip 2: Increase your deductible
Samson: “It seems contradictory, but by increasing your deductible (the amount you pay yourself per claim, ed.), you reduce the overall cost of your car insurance nine times out of ten. It is striking that most people almost take it for granted to consider a higher deductible with their health insurance. Consumers opt for this for a quarter of health insurance policies, but only about five percent for car insurance.
It doesn’t hurt to set the deductible a little higher. In case of small damage, we often advise you to pay the costs yourself, so that you do not lose a no-claim discount. On balance, that often does not matter much, but your fixed monthly amount will be lower with the higher deductible. As long as you have no damage, that is more favorable.”
In the case of our Volkswagen example, the Golf driver pays around 93 euros per month with a zero deductible. If he sets the personal contribution at 500 euros per case, the monthly costs at the same insurer decrease by more than a tenner. Incidentally, it can also pay to pay the annual premium in one go instead of a monthly collection: often the total amount is lower because you pay fewer transaction costs.
Tip 3: Communicate changes
Samson: “This is perhaps the tip that people underestimate the most. Does something change in your situation, for example, due to a move? Do not just call your insurer to pass that on, but first, make a comparison of whether your insurance still suits you. That can often save money.
Many people are insufficiently aware of the impact of a zip code. Insurers are making a risk profile of more and more places in the Netherlands so that the premium can differ per house number or even per house number addition. Moreover, because they use more and more data, the companies are pricing more and more intricately. In the past, insurers made a distinction between four risk regions in the Netherlands, with premiums in large cities often being higher than in the countryside of Groningen. Nowadays, the premium can be lower in one street than in another.”
With our fictitious Golf owner, the address quickly saves five to ten euros per month: in a new neighborhood on the outskirts of The Hague (Allrisk from about 71 euros per month), according to our comparison, he runs much less risk than in the more expensive place in the city center, where the Allrisk premium starts at about 83 euros. The difference with the countryside of Groningen is even greater: if our Volkswagen driver moves to the village of Leek, his premium starts at 52.10 per month, according to the Independer comparator.
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Tip 4: Compare the details
When comparing, large differences stand out between the various insurance companies, says Samson. “For example, many insurers focus on a certain group of customers, whom they want to address with attractive premiums. If your data changes a bit, for example, because you have become a year older, it may just happen that you no longer fall into the ‘interesting box’ of a certain insurer. This is reflected in your premium.
The opposite is the same: many companies see young people as a group with a higher risk, who then often pay higher premiums. But with one insurer, people up to the age of 24 fall into that group, while another company, for example, uses an age of 22. Then one birthday can suddenly just save a hundred euros on an annual basis if it is no longer.”
Tip 5: Compare every year
Suzan Samson advises reviewing your insurance policies at least once a year. “Precisely because so much can change in a year and because that can have a significant impact on the amounts you pay. Moreover, it takes less time and effort than people think. Health insurers arrange the switch among themselves, but nowadays canceling your car insurance is also a piece of cake. Moreover, in most cases, you do not have more than one month’s notice after the first year. In fact, nowadays you can leave more than half of the companies every day.”
Afraid of losing your no-claim? No need for anything, says Samson. “In the past, you really had to have a piece of paper to prove your claim-free years, but nowadays insurers use a national database that contains your claim-free years. This way, your new insurer uses the right data after a switch.”
Anyone who comes from a lease car must pay attention. “The database is relatively new and not all leasing companies are affiliated with it yet, so sometimes you have to request a statement from your old insurer to prove the number of claim-free years.”
Tip 6: Be careful with ‘stack or package discount’
Samson: “Many insurance companies use so-called stack discounts: the more insurance you take out with one party, the more discount you get. This often ensures that customers are more loyal to an insurer and it seems more convenient (less regulated) and advantageous for consumers. But it is my advice not to indiscriminately insure everything with the same company. Despite these discounts, you are often more expensive than if you choose the best option for your individual insurance policies everywhere.”
Does it still pay to call your insurer to ask if the premium can be reduced? Samson: “I’m afraid not. Nowadays, most insurance companies charge one price for all customers and it hardly pays to ask for a loyalty discount. Instead, good comparison and possibly switching is often smarter.”