Simple tricks to slash your insurance costs by hundreds - without compromising cover

In the midst of the cost-of-living crisis, Brits are urgently searching for ways to cut back on their monthly outgoings. One area that could potentially deliver significant savings is the cost of your insurance premiums.

According to financial experts from Which? Money and The Financial Times, there are several simple strategies you can use to reduce the cost of your insurance cover without sacrificing the quality of your protection.

FT Money Clinic podcast host Claer Barrett sat down with Sam Richardson, the deputy editor of Which? Money and Ian Smith, the FT’s insurance correspondent, to tell listeners how to reduce the cost of premiums without compromising the quality of your protection.

1. Shop around and compare quotes

The first tip is to shop around and compare quotes regularly. The experts recommend using price comparison sites and shopping around each time your policy is up for renewal to ensure you're getting the best deal.

Switching insurers can often lead to substantial savings, so it's worth dedicating the time to researching the market and finding the most competitive offer. Just be sure to carefully check the level of cover provided.

“Shopping around [is] absolutely key,” Ian Smith told listeners. “Maybe more than just once to see whether a good deal has come in because an insurer has decided maybe to take that risk.”

2. Get a Black Box fitted

Ian explained that as controversial as they are among drivers, a black box telematics device in your car can significantly reduce your premium. “There are other things you can do apart from shopping around. Consider the type of car you’re driving. This putting telematics, a black box in your car. Not everyone wants to do that, but you can get a discount for your insurance for using telematics. There are also insurance companies (inaudible) that will reward you for good driving behaviour,” he explained.

3. Increase Excess

Another effective tactic is to increase your voluntary excess. Agreeing to pay a higher excess can help lower your premium costs, though the experts caution against setting it so high that it becomes unaffordable if you need to make a claim.

4. Paying annually

Paying for your policy annually instead of in monthly instalments is another simple way to save. Insurers may charge interest or admin fees for spreading the cost over 12 payments, so opting for a single annual payment could result in overall lower costs.

Ian explained: “Paying for your insurance for the year rather than monthly can save you according to some Which? numbers £300 for the year.”

5. Consider digital-only packages

Opting for a digital-only package can bring the cost of a insurance down too. But the experts told listeners to err on the side of caution and ensure the saving is genuine.

Host Claer pointed out: “One thing that I’ve noticed is some insurers, Hastings Direct is the one that springs to mind, they’ll give you a cheaper quote for a policy if you say that you’re happy to have a digital-only service without access to a phone line at the point where you’re taking out.”

Sam Richardson said: “Yes, it’s beginning to be a trend. I think it’s fine if the saving is genuine. And they’re not cutting on this service when you need to claim. In most cases, when you actually need claim, at some point in that process, you should be able to deal with a human being. It can’t all be done at the moment by algorithms, but certainly worth considering.”

By implementing these simple strategies, you could potentially save hundreds of pounds on your insurance premiums each year without having to compromise on the level of cover.