This week, Jonathan Hehir – the managing director of Insuremycars.ie – has joined the host Pat on the Pat Kenny Show with Newstalk, to share with the audience some top tips on how to save on car insurance. You can listen to the podcast here.
Host Pat Kenny: A recent study revealed that motorists could be paying more than three hundred euro too much for their car insurance. The study revealed that misplaced loyalty was driving up premium prices and suggested that if road users shopped around, they could almost half the yearly charge. Now joining me for some tips on saving on your car insurance is Jonathan Hehir, Managing Director of insuremycars.ie. Jonathan, good morning and welcome.
Guest Jonathan Hehir, Director: Morning thank you.
Host Pat Kenny: It seems incredible that people would pay too much. So, how does that come about that people just cough up when they get the invoice?
Guest Jonathan Hehir, Director: One of the things we’ve noticed recently is that people are comfortable renewing their policy if they have a reduction on the previous year.
Host Pat Kenny: So, they get a ten-euro reduction, they say “Bingo, it’s gone down!”
Guest Jonathan Hehir, Director: So, they’re happy with this and they feel they’ve got a good deal but if they were to shop around, they would get a much better deal. So, the cases that we use in those examples were all people who moved from one insurance company to another insurance company and in every case that we come across the biggest savers are people who change from one insurer to another insurer. Some people might try and haggle or negotiate or change their details to reduce their cover with their own insurer, but you still won’t save as much money as you would if you were to shop around.
Host Pat Kenny: Does it mean insurers are actually doing lost leaders? In other words, get you on board. I thought that wasn’t allowed anymore.
Guest Jonathan Hehir, Director: No, they don’t but what happens is that possibly the insurance company that was best for you last year might not be the best insurer for you this year. So, examples that I just did very quickly this morning, a renewal last year – four hundred and eighteen euros, this year the same insurance company – three hundred and sixty eight euros, but by moving insurance company the premium is three hundred and ten euros. Ehm and that’s a saving there of… so the customer is getting comfortable because they have a fifty euro saving on last year.
Host Pat Kenny: They could’ve made a hundred euro saving.
Guest Jonathan Hehir, Director: Exactly, by making a few phone calls they would’ve got that hundred euro saving.
Host Pat Kenny: So, how competitive is the market out there? I mean are… you know there used to be the impression given, “Ah sure we’re losing money, we’re only making money on our investments god love us, but we don’t make any money on the underwriting.” That’s clearly not so.
Guest Jonathan Hehir, Director: No and that’s changed a lot in recent years. So, we have new person entry guidelines out there. I feel that there’s competition with insurance companies out there to get business and the only way that you will… sorry car drivers, will get that saving is by finding the right insurer for you and you do need to do it every year. So, for all the different things you can do to bring your price down… I know I’m repeating myself, it’s shopping around, finding the right insurer for you. It can half your price. So, a five-minute search on our own system this morning, I found cases where people’s premiums were going from a thousand euro to five hundred euro by us, as the broker, moving them from one insurer to another insurer.
Host Pat Kenny: Now, the people, sometimes they insure direct… they go direct to the insurance company and other times they use a broker. Ehm, I’m always fond of using brokers because if you have a problem, the broker will handle much of the fall out.
Guest Jonathan Hehir, Director: They will and also brokers are much better able to deal with cases like ehm, for example, we have a backlog in NCT’s at the minute. So you go to an online insurer, you put in your car details, and it says, “okay sorry your NCT is out by three months, we’re not going to offer you a quote”. A broker will be, by speaking to you, be able to say, “Have you booked it in to the NCT centre?”, “I have”, “Send me a screenshot” and then we would speak to the insurance company on behalf of you and say “It’s booked in. This is the soonest date they can get” and the insurer will allow us then to proceed and override the system and give you a quote.
Host Pat Kenny: So then, you guys have direct access as the brokers, that’s the way it works.
Guest Jonathan Hehir, Director: Yes.
Host Pat Kenny: You can pick up the phone and get somebody whereas the rest of us “Please press one or two or three or four, there is a queue, dah, dah, dah, dah.”
Guest Jonathan Hehir, Director: Or “computer says no”- that would be the most common one, when the computer says no. Whereas we will have access to people in authority who we can explain to them your circumstances and give the reasons why your NCT may be out of date and then we can override the system.
Host Pat Kenny: Now ehm ways in which people can save irrespective of moving or not – ehm a number of them, and you might comment on each of them. Taking on an excess.
Guest Jonathan Hehir, Director: Okay so some people are more comfortable with a higher excess on their policy. So, your current policy may be a hundred-euro excess, but you look at another insurer where the excess is two hundred and fifty euros on your policy, it may reduce your premium down by choosing to take the higher excess.
Host Pat Kenny: Yeah and people might do that for example, typically when they hire a car.
Guest Jonathan Hehir, Director: Yeah.
Host Pat Kenny: They’ll undertake an excess in order not to pay a lot more per diem for the car. Okay another one – experience. Suppose you’re a named driver, does that make any difference when you’re going for your own insurance?
Guest Jonathan Hehir, Director: It makes a huge difference for young drivers. So, we would see a clear path for younger drivers to get lower cost car insurance is if it’s possible to get named on your parent’s policy, when you’re starting out, to do so. If you can build up a documented experience to show you have the one- or two-years’ experience before you take out your own insurance. Maybe pass your test during that period as well. That will reduce your premium and it could be again, that could be a fifteen hundred euro saving by having that driving experience.
Host Pat Kenny: For that parent, who did that favour for the offspring by putting them on their policy. Then the offspring has fled the nest, is driving on their own policy, perhaps an employer’s policy but they’re not on the parent’s but the parents forget to take the named driver off the policy.
Guest Jonathan Hehir, Director: They do and the systems when you get your renewal notice in the post won’t automatically take that person off so you’re going to get the premium back even if that person hasn’t driven the car in twelve months. So, it’s another reason why you should speak to somebody at your renewal period because they will review the details with you and in so many times, we will get told they haven’t driven the car for twelve months and we say, “Look let’s just take them off the policy”.
Host Pat Kenny: The kind of policy you can go for, comprehensive or you can get the basic, which is third party fire and theft. If you’re driving a banger, comprehensive… might… be a bit pointless.
Guest Jonathan Hehir, Director: And then if you’re going to put a comprehensive claim in, it’s going to affect your premium the following year so you’re not going to save money. So, the value of the car and affordability will normally dictate whether you choose comprehensive or third-party fire and theft.
Host Pat Kenny: Now what about discounts? Are there discounts available for any categories of people.
Guest Jonathan Hehir, Director: So, adding a driver onto your policy can often reduce your premium down. So…
Host Pat Kenny: That seems counterintuitive.
Guest Jonathan Hehir, Director: It does… but the insurance companies have built sort of an algorithm that will show that having two drivers on the policy will, may reduce it. Other insurers, by the way, will charge for having another driver on the policy. So, it’s horses for courses and finding the right insurer for you will save you money. But if you can… if you have your partner on the car for example, in a lot of cases, that will reduce your premium.
Host Pat Kenny: Now what about when you have two cars, maybe two drivers, can you get a joint policy that will give each one the right to be properly insured and reduce the premium?
Guest Jonathan Hehir, Director: No, but in 9 out of 10 cases if you have two people, two cars and you tell the insurance company that you both have a car you’ll get a discount for having a second car in the family. It doesn’t necessarily have to be with the same insurer, but if you have two cars in the family, it does reduce the price down… on both policies.
Host Pat Kenny: So finally, Jonathan you reckon that virtually everyone when renewal time comes, can save a few bob?
Guest Jonathan Hehir, Director: Apart from the absolute most perfect case with the perfect insurer, everybody else will save money if they shop around and I believe talking to a broker will be the best way to save money.
Host Pat Kenny: Jonathan Hehir, Managing Director of Insuremycars.ie. Thank you very much.