Profits in the non-life insurance industry fell by almost 80% during 2008. The drop in profits was largely attributed to a rise in claims costs, amongst other factors.

It is common knowledge in the insurance industry that premiums will rise and fall in a hard and soft market cycle every few years. The last insurance hikes were after September 11th 2001 when insurance prices went through the roof and some SMEs could not obtain insurance cover at all.

Since 2001, there have been a number of changes in the Irish insurance market including:
- The advent of PIAB. This was initiated to reduce the legal costs associated with personal injury claims and ultimately to help drive down the cost of insurance.
- A substantial increase in the number of insurers operating in the Irish market. This has been evident with the arrival of many UK based insurers who had not operated in Ireland until recently. Many of these insurance companies conduct their Irish business through a network of brokers and underwriting agents.
- The advent of the ‘Insurance Confidential’ line which has encouraged the reporting of suspect claims.

Despite these changes, car insurance costs are still rising. So how to avoid the hikes?

Here are a few suggestions:

1. Consider an increased policy excess.
Some car insurance policies will give a considerable discount if you accept an increased excess.

2. Restrict the number of drivers on your policy.
Some insurers give considerable discounts if you restrict cover to insured only or insured and spouse only driving.

3. Reduce the vehicle value.
This will normally not make a big difference on car insurance but in some cases it can reduce the premium.

4. Increase the vehicle value!!
Don’t value your car too low. Some car insurance companies will only quote for vehicles that have a value of more than (for example) €4000. In an effort to reduce the premium, some people will deflate the actual value of their vehicle when, in fact this can have the effect of increasing your premium.

5. Upgrade your car!!
Some insurers will only quote vehicles that are less than 10 years old. So if you car is more than 10 years old, you could be paying over the odds for car insurance. Obviously there is a cost involved in buying a new car but the saving on your car insurance may go some way to making it worth while (and you will have a new car).

6. Reduce cover
This is an obvious one. Reduce your cover from comprehensive to Third Party, Fire & Theft to save money.

7. Increase your cover!
This is not an obvious one but what I am writing about here is getting the best value. In some cases the difference between comprehensive and Third Party cover may one be €20 - €30 and with comprehensive cover you will also be getting breakdown, windscreen, personal accident etc. One winscreen claim could add up to €200. 

8. Shop around.
Try www.easyquote.ie which will provide quotations from more than 20 car insurance products and you only need to enter your details once.

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