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How to get cheaper insurance

The number of motorists who have chosen to pay extra excess to get a cheaper premium has more than doubled.

In the past five years the number of motorists who have chosen to pay extra excess to get a cheaper premium has more than doubled.

According to Budget Direct figures, it has gone from 8 per cent to 17 per cent which is still low, but an indication that motorists are seeking to pay less in these tough economic times.

Spokesperson Richelle Ward says 90 per cent of motorists are also taking advantage of policy discounts by restricting the age of drivers, 71 per cent are cashing in on discounts for fitting car alarms and immobilisers and 79 per cent are reaping the rewards for having a good driving history.

The number of discounts for having an anti-theft immobiliser and/or car alarm has grown 18 per cent over the past five years, mainly due to more new vehicles being fitted with them as standard.

Ward says the results show the current economic climate has forced many to reduce insurance premiums.

"Restricting who drives your car is a popular choice because younger drivers are a higher risk for having an accident so they do cost more to insure," she says.

Budget Direct figures show that a provisional driver is twice as likely to claim as a driver who has held their full licence for more than two years.

Receptionist Kay Fisher, 25, has restricted the age of drivers of her 2001 Mitsubishi Mirage to reduce her insurance premium.

"No one younger than me can drive my car for very good reasons," she says. "I don't have anyone in the household under 25 since I turned 25 in August."

She also hasn't made a claim in the past five years which keeps her premium down. However, her car doesn't have an alarm or immobiliser and she isn't planning to fit one as she keeps the car in a locked garage most of the time.

"Where we live it is quite safe, but I am a bit concerned about it in rooftop parking at work," she says.

Ward says another dollar-saving avenue gaining in popularity is the option to increase the excess fee to reduce the premium.

"While we've seen this option advertised more heavily in recent years it really depends on your financial situation as to whether this is a good idea," she says.

"Increasing your excess to $1000 might reduce your premium at the time of signing on but not all consumers may have that amount of cash on hand in the event of an accident.

"Without a vehicle to get to work a consumer could land themselves in further financial difficulty, highlighting how important it is to find the right policy for you."

Other ways motorists can reduce premiums is to shop around and provide as much information as possible about their vehicle such as whether it is kept in a locked garage and its usage.

INSURANCE HABITS

  Alarm Extra excess No claim Restrict age
2005 53% 8% 71% 89%
2010 71% 17% 79% 90%

 

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