Hold on to your money – cut insurance costs with one phone call

Cut your insurance costs with just one phone call

It’s possible to cut insurance costs with one phone call. That’s all it takes and if you don’t make that call, you’re likely to pay way over the odds when you renew your policy. It’s not difficult to get them to lower the premium. You don’t even have to say much. Just follow a few simple steps.

Unfortunately, millions of people don’t make that call and they end up paying far more than necessary, effectively subsidising the cheaper premiums of those who do challenge their insurance quote.

Maybe some people don’t act because they just get used to to insurance premiums constantly rising with insurers giving excuses like, “there have been so many claims this year”. Ok, but strange how costs never come down in years when there are fewer claims!

It happens in all forms of insurance, whether health policies, car or home insurance – anything that you renew annually and rolls on without you ever questioning it will inevitably end up costing you more than it should.

We’ve got so used to rising costs that we tend to take it with a shrug of the shoulders or hope that our loyalty to our insurance providers will be rewarded in reduced rates. Unfortunately, that rarely happens and instead you’re more likely to find that your provider will reward your loyalty by treating you like a mug and constantly charging you more each year.

The UK consumer advice organisation Consumer Advice estimates that people who stay with the same insurance company for five years can pay 70% more than those who switch. There’s just too much money at stake to not take action.

UK money expert Martin Lewis has helped thousands of people save money on insurance polices through his Money Show on TV. His advice is to always question your insurance renewal premium. He says: “They charge more each year, knowing inertia stops policyholders switching.

Never auto-renew your insurance policy

“Never auto-renew. Loyalty is expensive. Insurers usually offer the best deals to new customers, punishing existing customers with higher rates for failing to challenge them. If your renewal’s coming up, jot it in your diary.”

“The most extreme example we’ve seen is from MoneySaver Billy, who was gobsmacked as his Tesco renewal jumped from £140 to £1,621 in a year, despite there being no changes. Luckily, he’d seen our tips and managed to cut the cost.

“Compare comparison sites and then call your insurer to see if it can match, or even beat, the best quote you find.”

Lewis is right to urge people to shop around when it’s time to renew a policy, but a surprising number of people find that too confusing and too much bother. Your insurance company knows that and is relying on the fact that you find shopping around for a new policy too much of an effort…it’s boring to wade through the myriad of policies available and difficult to make sure you’re comparing like with like with each insurance quote.

The reality is that most people don’t bother and just renew. This could be a costly mistake but fortunately there is still an easy way to cut your costs even if you don’t want to go to all the trouble of searching for a new policy.

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Tell your insurers their renewal premium is too high

Just phone your insurance company and tell them that the renewal premium is too high, regardless of what it is and no matter how much they claim they’ve kept it down. I’ve saved thousands this way over the years and it rarely takes more than about 15 minutes.

Yes, just call your insurers and say you’re going to cancel if they don’t make a large reduction. You can even tell them you’ve already found it much cheaper elsewhere and you expect them to better the offer if they want to retain your business.

Please note, you don’t need to have actually found a better offer. Just tell them you have to help focus their minds. The first thing they will ask is what have you been quoted elsewhere, hoping that they will only have to go slightly lower to get you to renew. Tell them you don’t want to tell them because that would be unfair to the person who gave you the other quote, and in case, you want their best offer or else, you’re gone.

This puts the onus back on the insurance sales assistant because the last thing they want is to lose your business. You will almost certainly find that they find ways to reduce your premium.

When they come back with a lower offer, they will ask you if that’s acceptable to you. Always say no because it will almost certainly not be the best they can do. Tell them they’re still more expensive than your new quote and they need to reduce it further.

The assistant is then likely to click a few more keys on his or her computer and find another saving that reduces your premium. You can still say it’s too high and see what happens. The idea is to keep saying it’s too high until they reach the point where they say that’s their final offer.

At this point you could say something like, it’s still higher than your other quote but you’re going to think it over and discuss it with your partner. Ask them to email you the new quote and you’ll let them know within a few days. If they’re not prepared to go any lower at that point, you can be sure you’ve forced them into giving you their best cheapest premium.

Once the new quote arrives by email, simply accept it, assuming you don’t want the bother of looking elsewhere, and it’s job done. The chances are you will have made a significant saving and have the added warm feeling that you stood up to your insurance company and got a better deal out of them.

Ideally, shop around for a better insurance deal

I should point out, it’s still better to shop around on insurance price comparison sites to get a cheaper quote but if you just can’t face that, then a phone call to ask for a reduction is the next best option.

It’s a very simple process and you’ll probably find the hardest part of the procedure is finding the company’s phone number so you can begin. Insurance companies, like most big corporations, don’t want to have to speak to you because it costs time and time costs money. They’d much rather deal with you online.

So, you may have to do a lot of searching to find the right number but it’s worth the effort. With some companies I’ve found the quickest way is to do a google search for, customer service number…insert name of insurance company. Bizarrely, this can be quicker than searching on the company’s website.

This approach to reducing your premiums doesn’t always work but it usually does…and if it doesn’t you can relax safe in the knowledge that you already have a good deal and you aren’t being taken for a ride by your insurance provider.

There may be a few other stumbling blocks for some people. They may feel uncomfortable bartering for a better price, or even guilty about driving down the price. The response to both these issues should be, don’t worry.

The phone conversation with the insurance assistant won’t be like bartering with a market stall holder. You’ll find they’re very friendly and act as if they’re on your side as they try to get your premium reduced. Similarly, don’t worry that some poor sales assistant is going to lose out because you’ve driven down the cost of the premium. Rest assured, no matter how tough a negotiator you are, you’re never going to make your insurers lose money. They will still be making a good profit from you…all you’re doing is slightly reducing the amount of that profit.

Insurers will always overcharge if you let them

Once you start doing this with all your policies you may find yourself shocked at just how much your insurers have been making out of you over the years with grossly inflated premiums.

I got an unexpected insight into this when I opened a new account with my bank. It’s one that charges a small monthly fee but in return offers free car breakdown insurance together with basic holiday insurance.

It made me realise that I had been paying for car breakdown insurance year after year but had only made a few claims in two decades. All justice and fairness would suggest that having not made a claim for about eight years, my policy would come at a rock bottom price full of no claim discounts. Not a chance.

As I look back over my annual payments, I found that the premium had risen every year despite me making no claims and I realised that maybe I only had myself to blame because I had never questioned it. More fool me!

I then phoned the company to cancel the policy as I had the new free breakdown insurance from my bank.

I was amazed at the response. The assistant seemed to ignore that I wanted to cancel and said she would look if she could reduce the cost for me. The more I said I was going to cancel, the more cost came down. Eventually, it was reduced from over £300 a year to just £130 a year, with no reduction in breakdown cover.

The assistant announced the new figure with an air of triumph as if she had done a great thing for me and I should be greatly impressed. Instead, the opposite was true. I became more and more angry because I realised the insurers had been taking me for a fool for 20 years.

Now I challenge all insurance quotes

I pointed out that the huge reduction in premium could only mean that the company had been overcharging me for years. The assistant didn’t seem to grasp my point. She was young you see, and I am old. We have very different perspectives. For me it was still strange that the more you stayed loyal to an insurer, the more it charged you even if you didn’t make any claims.

For her, it was a no brainer that you should question your premium cost every year.

Well, it took me a long time to grasp it but I didn’t need telling twice. Now I question every increase in all my policies…health insurance, car insurance, home contents insurance…you name it, I question it and about 8 times out of 10, I get a significant saving. Not as dramatic as the car breakdown insurance reduction but always worth having.

The most consistent success I have is with my car insurance. I have multi-car policy with a leading insurer for two cars. There are four named drivers who have all the no claims discounts available yet the cost goes up every year. So, every year I phone them and tell them it’s too high. Every year, we go through the same ritual outlined above and every year they reduce the price. The reduction has been as high as £150 but it averages between £50 and £80.

Not bad for the sake of a 15-minute phone call.

Give it a try. One little phone call could save you a lot of money. Better in your pocket than theirs.

Don’t be pushed into being old before your time…you’re never past it

How to complain about your insurance provider

Making an insurance complaint in the United States