I'm a new driver and I've been paying about £70 per month on my insurance which makes sense given my position. I obtained a new quote from the same insurance company and the price was £50 per month. From what I understand, if I was to cancel my current contract and start a new one, I would pay £50 per month but I doubt it's that easy. What's the best way to negotiate with my insurance company without having to cancel my contract?
Unless you are with a specialist short-term insurance company, buying a new policy every month, you will not actually be paying the insurance monthly.
Instead, you will have taken out a one year policy, paid for by a credit agreement. You are now repaying that loan in monthly installments. If you decide to cancel early, there will be a cancellation fee to pay.
You would need to check whether that cancellation fee would exceed any savings you would make by cancelling and re-insuring.
Also bear in mind that you only earn a no-claims bonus for every full year completed. If you cancel early, you won't build up another year's bonus until the new policy has completed.
Although I'm in the US and things might be a bit different over here, I'm willing to bet in this instance they're the same. I shop around every year or 2 for car insurance. Every few years, I can find someone willing to offer something a bit less than what I'm currently paying. I simply call my current insurance provider, tell them what I've been offered somewhere else and give them the chance to match or beat it. If they can, great, if not, I move on. They can't (read: shouldn't) cancel your insurance until you actually tell them to cancel it, so just asking them to negotiate won't cause your policy to get cancelled.
Something to pay attention to: When shopping around, make sure you're comparing apples to apples. Quite often when I find a rate that is substantially less than what I currently have it's because it isn't as good coverage. Are the deductibles higher? Are the same perils covered? What about under-insured or non-insured driver coverage? New vehicle replacement coverage? Towing and road-side assistance? What's the reputation of the insurance company with regards to how quickly and easily they process claims? Will the new rate be a teaser rate that gets jacked up when it's time to renew in a year or 6 months? There's a lot to take into consideration other than just the price.
Shop around every so often. The insurance companies expect it. I've even had my insurance agent point out that it's been a while since we've had a review of coverage and they will check to see if they can offer something better. This review also take into account depreciation of my vehicle and extended duration of not filing claims. Might be your status has improved since they first did a review.
This is the standard way to approach getting a better price when renewing any insurance:
- Call the insurer and get through to their Renewals team
- Say "I got your renewal quote, I found a better price online, can you match or beat it?"
- They will ask who quoted you the cheaper premium, and when they're happy you're legit, they will adjust the price.
In this case, you can truthfully answer (3): "Yourselves!"
There is always, always wiggle room for the insurer's call centre staff to adjust the premium. They never offer you their absolute best price up front. They will bend the price as long as they are not already the most competitively priced provider. Approaching it in this way will work almost every time, provided that you can legitimately walk away and find a better premium elsewhere. (And also, provided that you are nice on the phone and don't wind up the agent).
Having said that, one caveat:
Be sure you are comparing like for like.
Are you sure the new price you obtained from the company wasn't assuming, for example, a much higher excess (the amount you'll pay on each claim)?
In order to speed up giving you a quote, insurers' systems tend to make assumptions about things like voluntary excess. Comparisons only work when the risk profile is exactly the same – your profession, mileage, history, all the details that go into giving you a price in the first place.
Added tip: I've sometimes found I can trim e.g. £50 off the annual premium just by increasing the voluntary excess a further £100. Just think about that, £1 extra / year to insure a further £2 loss… madness. So, always ask about the excess either way.
There are a couple of methods I'd like to quickly mention that might place you in a stronger negotiating position.
Pass Plus Qualifications
A number of insurance providers offer discounted rates on car insurance to new drivers with Pass Plus qualifications. Not all of them though. Some will refuse on the grounds that "their rates are already so low".
Also, installing a dashcam or a tachyometer into your vehicle is something which insurance companies are quite fond of and you may find yourself better able to negotiate as a direct result.