Insurance cover is a ‘big ticket’ item for many people. Today’s Ireland is an Ireland in which most working adults own a car, home or both.
With concerns about the state of the public health service, the fact that we do considerably more foreign travel than our parents ever did, and have much higher incomes to protect, the annual insurance outlay can be quite large.
When you throw an ‘X’ factor into the works – a young person in the family who needs a car to get to college or to work – that insurance bill can really soar.
Two interesting insurance price stories came my way last week that might just save you quite a few euro over the next year.
The first concerns the cost of insuring young drivers, the second is about one reader’s interesting experience when searching for a home insurance quote.
If there is one consistent insurance gripe in this country, it is how expensive it is to insure young, but especially young male drivers of between 17 and 30.
Depending on the age, driving experience and model of car, a young male driver can end up easily paying €3,000 or €4,000 a year to insure their vehicle, and that might not even be for comprehensive insurance.
The practice of insurers refusing to even quote young drivers has pretty much ended because of challenges to the Equality Authority and reports which found that insurers made huge profits from young drivers, despite their record of more frequent and expensive claims.
In 2006, says the Road Safety Authority, drivers under 25 accounted for 37 per cent of fatalities and 25 per cent of injuries but represented only nine per cent of all policyholders.
Nevertheless, the heavy ‘loading’ of young drivers continues. However, there have been some positive initiatives by the industry, such as the driver training programme introduced by Hibernian Insurance, which results in a substantial premium reduction upon successful completion of the course.
Another scheme has been introduced – by a company called XS Direct which could result in a huge premium savings by young drivers or their parents if they agree to a voluntary driving curfew on weekend nights and are prepared to accept a high insurance excess payment of €2,000 for female and €4,000 for a male driver.
It is this latter element of the product that may not suit every driver’s budget (it is currently limited to cars under 1300 cc and worth at least €5,000), but the company guarantees that once the excess is paid, under no circumstances will the premium be raised.
The product is called XS Direct ‘Pumpkin’ – a storybook reference to how Cinderella’s carriage turned into a pumpkin at midnight – and it is being rolled out all over the country in the coming months.
In this version, the young driver must agree not to drive between 10pm and 6am on Friday and Saturday nights only – the two nights of the week when young drivers have the most accidents, and may be tempted to drink and drive.
A device is fitted to the car to alert the company if the car is driven between those times and if so, the driver is ‘fined’ an automatic €50; XS Direct say it is about the amount a driver would otherwise pay taking taxis on their nights out.
This comprehensive policy, say the company, is ideal for the young driver, especially in rural areas who needs a car to get to college or work or who needs the car for work purposes but could probably manage to get a lift or take taxis on the weekend. The high excess also incentivises them to adopt good driving training and habits.
The potential cost savings is quite high and you can get a quote on line at www.xsdirect.ie , but typically the young driver can expect savings of at least €1,000 a year off the most expensive other quotation on the market, the company claims.
Meanwhile, what do you do when at least two direct insurers tell you that they don’t offer buildings and contents insurance on houses over 100 years old.
“This happened to me last week,” writes a MoneyTimes reader, “when I decided to follow your advice and shop around for a new home and contents quotation. I’d been with the same company for about four years and the premium had really gone up, but I hadn’t really noticed because if was paid monthly.
“I couldn’t believe it. The country’s entire stock of Victorian and Georgian house would no longer be insured.”
In actual fact both companies our reader mentioned, do cover older houses – it’s just that their tele-staff didn’t have the full story.
“All home insurers cover older houses,” says a Dublin insurance broker, Sean O’Connell whom I spoke to on her behalf.
“But they won’t insure an old house if it hasn’t been renovated at some stage – new or repaired roof, updated electrics and plumbing, etc.
The lesson here, says Sean, and not surprisingly, is to also call a good general insurance broker when seeking a quote as well as calling the on-line insurers (who don’t deal with brokers, or pay them a commission).
In our reader’s case, the broker was able to find another insurer to match her existing cover, but for a whopping €600 less.
* MoneyTimes welcomes letters and queries from readers. Write to Jill Kerby c/o this newspaper or contact her directly: email@example.com