Can you beat rising insurance premiums? - Times Money Mentor (2023)

UK insurers are now banned from offering cheaper prices to new customers for home and motor insurance. As a result, customers who regularly switch insurers may find their bills become more expensive when their existing deal expires.

Below, we explain what the new rules mean and whether there is any way to beat increasing insurance premiums.

We cover:

  • Why have insurance premiums gone up?
  • How to lower your home insurance premiums
  • Tips for reducing your car insurance costs
  • Can telematics reduce my car insurance premiums?
  • Can smart devices reduce my insurance premiums?

This article may contain affiliate links that can earn us revenue*

Can you beat rising insurance premiums? - Times Money Mentor (1)

Have insurance premiums gone up?

As of January 2022, existing customers renewing their home or motor insurance will pay no more than new customers.

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The changes, brought in by the Financial Conduct Authority (FCA), are designed to remove the penalty for customers who are loyal to one company.

The reforms follow a review by the FCA that found many insurers were increasing premiums for existing customers year-on-year. New customers were drawn in with cut-price introductory deals, but these prices would rise if they renewed their policy with the same provider annually.

The FCA’s changes mean that prices for new customers looking for car, motorbike, van and home insurance are likely to rise, and the savings from switching will likely reduce.

Having said that, insurance premiums for both home and motor insurance have been falling steadily since the start of the coronavirus pandemic in early 2020.

This is because the various lockdowns and rising number of people working from home have led to fewer house burglaries, and people are driving less frequently.

For more ways to cut costs, check out how to lower the cost of household bills.

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How to lower your insurance premiums

To get the best deal on your home and car insurance, it is important to shop around and compare prices online using a price comparison tool – we feature one here on the Times Money Mentor website. Others include*, GoCompare and MoneySupermarket.

It is worth checking a number of comparison websites, as not all insurers appear on each one.

The best time to search for a new policy is around three weeks before your current policy is due to expire. Leaving it to the last minute could cost you twice as much, according to the consumer website MoneySavingExpert.

For other ways to lower your insurance premiums, follow the below tips.

Five tips how to lower your home insurance premiums

There is a lot you can do to reduce your home insurance premiums. Here are five tips:

  1. Pay annually: You will often get a reduction for paying your annual bill in one lump sum, rather than spreading the cost monthly through direct debit.
  2. Combine your policies: A policy that covers both buildings and contents insurance is often cheaper than taking out separate policies. The average cost of a combined home insurance policy is £138.75, according to MoneySupermarket’s Price Index. This compares to the average cost of buildings insurance at £110.38 and contents insurance at £55.84 (£166.22 total).
  3. Take advantage of your no-claims discount: If you don’t make any claims, you should see your annual premiums fall over time.
  4. Cashback offers: Cashback websites such as TopCashback and Quidco offer money back if you buy a policy through their website, whether you use a price comparison website or purchase from an insurer directly.
  5. Don’t overpay: Calculate the rough value of all your belongings and be aware that buildings insurance will only cover the rebuild cost of your home, which may or may not be lower than the market value of the property.

Other tips to bring down the cost:

  • Install a burglar alarm. Insurers may think your property is less likely to be burgled if you have an alarm.
  • Have a safe. Keeping valuables locked up means they are less likely to be stolen.
  • Install security lighting. Outdoor lighting can deter burglars as it makes the area more visible.
  • Insulate water pipes. Water is a common cause of property damage. Insulating water pipes will mean they are less likely to freeze and burst. Find out here whether your home needs flood insurance.

Will my insurance cover me if I work from home? We explain the working from home rules here.

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Eight ways to beat car insurance price increases

As above, there are also many ways you can reduce the cost of car insurance.Here are eight tips:

  1. Shop around: Compare policies using this helpful comparison tool, plus at least one other comparison website to find the best deals. You may also want to consider using an insurance broker to compare the whole market.
  2. Pay annually: You will often get a reduction for paying in one lump-sum, rather than monthly.
  3. Increase your excess: This is the amount you pay for any damage before your insurer covers the rest. Increasing your excess will mean you pay more in the event of a claim. But it will mean you pay cheaper premiums, so you will save money if you don’t make a claim.
  4. Add a responsible driver: Adding a second driver to your policy who is older and more experienced could bring down the cost to you. This is because insurers assume you will spend less time behind the wheel, reducing the probability of you having an accident and making a claim.
  5. Cashback offers: As above, cashback websites such as TopCashback and Quidco offer money back when buying car insurance through their website.
  6. Haggle with your current insurer: Call your provider to see if they can offer a discount or match a price found elsewhere.
  7. Look at all policies: Consider both comprehensive and third party insurance. Comprehensive covers damage to your own car in the event of an accident, while third party only covers damage to other cars. It is often assumed that third party is cheaper, yet this isn’t always the case as insurers may view you as a more responsible driver if you regularly choose a comprehensive policy.
  8. Telematics: A telematics device installed in your vehicle can reduce the cost of your premiums (see below).

For more on car savings, find out how this reader saved £6,000 on his Audi and £730 on car insurance.

Can telematics reduce my car insurance premiums?

A telematics device – also known as a black box – allows insurers to get a clearer picture of your driving habits. They can then adjust your premiums based on how you drive.

The device is a similar size to a mobile phone, and will be based somewhere discreetly in your car. When installed and activated, it’ll record information such as:

  • When you drive – you’re more likely to be involved in an accident at night or during rush hour.
  • Where you drive – whether you generally stick to quieter roads or whether you regularly drive on motorways.
  • How fast you go, and how you manage speed limits.
  • How you drive – for example, how you steer and take corners.

So if you drive safely, a black box can prove to insurers you are a reliable driver who is less likely to be involved in an accident. Your premiums may then fall when you come to renew or take out a new policy.

On the other hand, it may have the opposite effect if you do not drive sensibly and do not follow any rules set by your insurer (some insurers penalise you for driving at night).

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A black box insurance policy is typically best for young and inexperienced drivers who have not accrued a no-claims discount.

A typical driver under 25 saves £223 a year on their car insurance by using telematics, according to data from MoneySupermarket.

Can a smart home reduce my home insurance premium?

A ‘smart home’ involves a range of devices being connected to one another and the internet, allowing you to control them remotely. These devices may include video cameras, motion sensors, smart lights and door or window sensors.

The idea is you can control these devices remotely, through a smartphone or tablet. You will also receive notifications when one of the devices has been activated.

For example:

  • Window sensors mean you will be alerted if someone tries to open the window while you are away from home.
  • Smart lights mean you can programme lights to turn off and on while you are away, giving the impression someone is at home.
  • Smart locks allow you to control access to your front door remotely. For example, you may want to give access to a family member while you are out.

A smart home security system should make your home more secure, and ideally reduce your insurance premiums.

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But take-up of smart devices in UK homes is still relatively small, and most insurers currently don’t offer discounted premiums for smart devices.

And if anything goes wrong with your smart system, you could find a claim being turned down. For example, if you don’t use a smart lock correctly and accidentally let a burglar into your home, your insurer is likely to turn down a claim as they would treat it as a door left unlocked.

*All products, brands or properties mentioned in this article are selected by our writers and editors based on first-hand experience or customer feedback, and are of a standard that we believe our readers expect. This article contains links from which we can earn revenue. This revenue helps us to support the content of this website and to continue to invest in our award-winning journalism. For more, seeHow we make our moneyand ourEditorial promise.


How can you lower premiums of any insurance policy? ›

  1. Increase your deductible. ...
  2. Double check what discounts you qualify for. ...
  3. Shop around for car insurance. ...
  4. Maintain a good driving record. ...
  5. Sign up for our safe driving program. ...
  6. Take an accident prevention course. ...
  7. Explore payment options. ...
  8. Improve your credit score.

Can insurance companies adjust prices? ›

Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score.

Do insurance premiums increase over time? ›

Annual increases are typical across the industry, but the way your risk factors are viewed by a particular company may vary. Get to understand your coverage and discounts to ensure you are getting the best price for the assurance you need.

What are three factors that lower insurance premiums? ›

What factors are most important for car insurance rates?
  • Age. Age is a very significant rating factor, especially for young drivers. ...
  • Driving history. This rating factor is straightforward. ...
  • Credit score. ...
  • Years of driving experience. ...
  • Location. ...
  • Gender. ...
  • Insurance history. ...
  • Annual mileage.

What actions can you take personally to lower premiums? ›

5 ways to lower insurance premiums
  • Review your policy coverage. Look over your policies annually, because prices can change from year to year. ...
  • Check your deductibles. ...
  • Make home improvements. ...
  • Discontinue extra coverage. ...
  • Ask for discounts.

Will insurance companies negotiate? ›

Negotiating with the car insurance company. If the adjuster's initial offer is far below the estimates you gathered, you should negotiate with the insurance company. You don't have to file a lawsuit to start. These discussions can take place in person or via email, but you'll want to get the final decision in writing.

Do insurance companies lowball? ›

Insurance adjusters usually propose a lowball offer because their companies don't want to pay more money than they have to, and they think they can get away with it if the claimants don't have experience negotiating these types of claims.

Are insurance companies overcharging? ›

After a systematic review of data submitted by insurance companies — the only such review in the country — he has found that insurance companies continued to overcharge consumers despite drastically reduced risk of accidents and loss due to the ongoing pandemic.

Why are premiums increasing so much? ›

Inflation. Perhaps the biggest driver of higher 2022 car insurance premiums is the same thing that is driving up costs across the board — inflation.

Why did insurance premiums increase so much? ›

The number of car accidents has gone up, leading to more insurance claims. This higher claims volume, coupled with higher vehicle repair and replacement costs, is ultimately what's driving insurance rates up throughout the industry.

Why do insurance premiums keep going up? ›

Auto accidents and traffic violations are common explanations for an insurance rate increasing, but there are other reasons why car insurance premiums go up including an address change, new vehicle, and claims in your zip code.

Which is a type of insurance to avoid? ›

Mortgage insurance. Avoid insurance that will pay off your mortgage if you die unless you're ineligible for term life insurance. Reason: Mortgage insurance coverage declines as you pay down your mortgage, yet the premium stays the same.

At what point do you drop full coverage on my car? ›

The 10% rule says you can consider dropping full coverage insurance when the annual premium meets or exceeds 10% of your car's market value. For example, if your car is worth $4,000, paying $400 or more for full coverage might not be worth it to you.

Does credit score affect car insurance? ›

A higher credit score decreases your car insurance rate, often significantly, with almost every insurance company and in most states. Getting a quote, however, does not affect your credit.

What are 2 unnecessary types of insurance? ›

15 Insurance Policies You Don't Need
  • Private Mortgage Insurance. ...
  • Extended Warranties. ...
  • Automobile Collision Insurance. ...
  • Rental Car Insurance. ...
  • Car Rental Damage Insurance. ...
  • Flight Insurance. ...
  • Water Line Coverage. ...
  • Life Insurance for Children.

What are the top 3 things you can do to lower your health insurance costs? ›

How can I lower my monthly health insurance cost?
  • You can't control when you get sick or injured. ...
  • See if you're eligible for the tax credit subsidy. ...
  • Choose an HMO. ...
  • Choose a plan with a high deductible. ...
  • Choose a plan that pairs with a health savings account. ...
  • Related Items.

What are 4 things that can affect your insurance rates and costs? ›

Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age, anti-theft features in your car and your driving record.

What are two ways to save on health insurance premiums? ›

7 Ways to save on healthcare
  • Use doctors and pharmacies in your networks. ...
  • Use your preventive care benefits. ...
  • Shop for high-value care. ...
  • Choose the right care at the right time. ...
  • Ask for generic drugs. ...
  • Make the most of wellness programs. ...
  • Take care of yourself.

How can I reduce my Medicare premiums? ›

How Can I Reduce My Medicare Premiums?
  1. File a Medicare IRMAA Appeal. ...
  2. Pay Medicare Premiums with your HSA. ...
  3. Get Help Paying Medicare Premiums. ...
  4. Low-Income Subsidy. ...
  5. Medicare Advantage with Part B Premium Reduction. ...
  6. Deduct your Medicare Premiums from your Taxes. ...
  7. Grow Part-time Income to Pay Your Medicare Premiums.
Aug 30, 2021

Can you reduce your life insurance premiums? ›

Reduce the policy's face amount. Most life insurance companies will allow you to lower the amount of your death benefit in exchange for a lower premium. If you lower the face amount of a permanent life insurance policy enough, your carrier may consider you “paid up” and allow you to stop paying premiums entirely.

How do you respond to a lowball offer from an insurance company? ›

What to Do If You Receive a Lowball Offer After a Georgia Car Accident
  1. Stay polite and professional. We understand it's a frustrating and emotional process. ...
  2. Ask questions. Try to figure out why the adjuster reached the conclusion they did. ...
  3. Offer the facts. ...
  4. Put your response in writing. ...
  5. Don't be bullied.

Do insurance companies try to get out of paying? ›

If they're not able to deny your claim for damages, insurance companies will try to minimize the severity of your injuries in an attempt to minimize what they have to pay you. This is more apt to happen with injuries they consider healable such as broken bones and whiplash.

What do insurance companies fear the most? ›

Insurance Companies Rely On Fear, Doubt & Uncertainty
  • Legitimate Denials. Of course, there are valid reasons for an insurance company to refuse to pay a claim or even demand repayment of a claim that's already been paid. ...
  • Intimidation Tactics. ...
  • Getting Justice.

Do insurance companies prefer to settle? ›

Most of the time, insurance companies will try to settle accident claims outside of court. Lawsuits are lengthy and expensive. An insurance company knows it's likely to pay less by settling outside of court. After you file a claim, the insurance company might respond quickly.

Can you reject insurance offer? ›

you don't have to accept any offer that's made to you. If you do accept an offer it might be lower than the compensation you would have got if you'd used a solicitor or gone to court instead. don't feel under any pressure to make a decision quickly.

Is there such a thing as too much insurance? ›

Being over-insured means you have more insurance than you need or can afford. There are several ways you can be over-insured. You might have duplicate or overlapping insurance policies, coverage you don't need or policies that cover much more than the cost of a potential loss.

Can you sue for insurance excess? ›

Paying excess for a car accident that isn't your fault

If you have trouble getting your money back, you can take the insurance company or driver to court. If your insurance company have dealt with the claim, they should claim the excess back for you.

Why do insurance companies overpay? ›

Sometimes an office is reimbursed too much money for services provided, which results in an overpayment. The insurance carrier usually makes the overpayment, but sometimes the patient makes it. In either case, it is important that the overpayment be promptly returned to the appropriate person or payer.

Will health insurance premiums go down in 2023? ›

Higher Premiums in Covered California.

For the 2023 plan year, premiums are expected to increase on average by 6 percent. In comparison, premiums increased by less than 2 percent on average in 2022.

Which is cheaper Geico or Progressive? ›

Both Geico and Progressive offer lower average premiums on policies for drivers and homeowners, but if cost is your primary consideration, Geico has the edge. Its average rates tend to be lower than the average rates offered by Progressive, and the company's extensive discount list may help you save even more.

What is one of the biggest influences on premiums increasing? ›

Inflation. Importantly, premiums can increase as time goes on because in the event of an accident, the cost of repair increases regardless of the age of the car. It doesn't cost any less to replace the bumper on a one-year-old vehicle than it does on the equivalent brand new one.

Why did my homeowners insurance go up so much? ›

Insurance companies are increasing rates to make up for billions of dollars in losses due to worsening climate disasters, and surging inflation means homes require more dwelling coverage to pay for rebuild costs. The combination of these factors has resulted in some fairly drastic rate increases in 2022.

Does Progressive raise rates after 6 months? ›

Yes, Progressive does raise rates after 6 months in some cases. If you're a new Progressive customer, you'll see your auto insurance premium go up after your first 6-month policy period if you file a claim or traffic violations get added to your driving record during that time.

Why would insurance be the most expensive? ›

Common causes of overly expensive insurance rates include your age, driving record, credit history, coverage options, what car you drive and where you live. Anything that insurers can link to an increased likelihood that you will be in an accident and file a claim will result in higher car insurance premiums.

Why is my insurance more expensive than last year? ›

If your car insurance has jumped up over the last year, this is usually to be because you represent a greater risk to the insurance company. This could be down to any number of factors including: Your age - younger, inexperienced drivers are more likely to be in an accident.

Why does my car insurance go up every 6 months? ›

While it can seem arbitrary, there are actual reasons you can see your price go up and down. Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score.

What is the most important insurance to have? ›

Health insurance is arguably the most important type of insurance. A 2016 Kaiser Family Foundation/New York Times survey found that one in five people with medical bills filed for bankruptcy. With a stat like this, investing in health insurance can help you prevent a significant financial hardship.

What insurance should everyone have? ›

Home or property insurance, life insurance, disability insurance, health insurance, and automobile insurance are five types that everyone should have.

Should I have collision insurance on a 10 year old car? ›

No matter how old your car is, you need collision insurance if you have an auto loan or lease. But what if you're not leasing your vehicle, and your loan is paid off? Collision insurance isn't required by law in any state, but it can provide valuable coverage if you're in an accident.

Is it better to have full coverage or liability? ›

Full coverage typically gives you more protection and is likely required if you are still making payments on your car. If you're driving a vehicle that's more than 10 years old or has high mileage, or you have enough money to easily replace it, you may want to consider going with liability-only.

How many insurance claims before you drop? ›

There is no limit on how many claims you can file. However, most insurance companies will drop you as a client after three claims over a three-year period, no matter what type of claim.

Is Progressive insurance really cheaper? ›

Is Progressive good car insurance? Progressive's average car insurance premiums are just slightly below the national average. But compared with the other insurers in our list of the Best Car Insurance Companies of 2023, Progressive's average rates are relatively expensive.

How do you lower your car insurance? ›

Here are some ways to save on car insurance1
  1. Increase your deductible.
  2. Check for discounts you qualify for.
  3. Compare auto insurance quotes.
  4. Maintain a good driving record.
  5. Participate in a safe driving program.
  6. Take a defensive driving course.
  7. Explore payment options.
  8. Improve your credit score.

Can I be denied car insurance for bad credit? ›

You can get car insurance with bad credit, but your choices may be limited. If you want to pay monthly, some providers might reject your application if they think there's a risk you won't pay.

What are four factors that can change your insurance premium? ›

Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age, anti-theft features in your car and your driving record.

Can you negotiate life insurance premiums? ›

And though you can't haggle over the rate, there's some wiggle room around premiums. “In general, you cannot use a competitor's rates to negotiate lower premiums with another carrier,” said Donahue. “However, many insurance companies will aim to cut premium costs for nearly anything that could lower your risk profile.”

How can life insurance premium rate be reduced explain? ›

As younger the age, lower the premium. Because the premium of your insurance policy increases with age. Thus, prefer buying an insurance at a young age if you want to avoid paying higher premium. Choose the ideal policy term - The tenure of your policy plays a major role in determining the amount of premium.

What do I do if my life insurance is too expensive? ›

Buying a new policy with a lower death benefit is also a possibility, though, as with term plans, people shouldn't assume they'll be eligible for a new coverage. Secure a new plan before giving up the old one. Surrendering a policy can also be a good option if you're in greater need of cash than life insurance.

At what age should you stop paying life insurance? ›

You may no longer need life insurance once you've hit your 60s or 70s. If you're living on a fixed income, cutting the expense could give your budget some breathing room. Make sure to discuss your needs with an insurance agent or a financial advisor before making any major moves.

Why is my life insurance premium so high? ›

As you age, your risk of death increases, which means that life insurance companies will charge higher premiums. Another reason for increasing premiums is changes in your health. If you've been diagnosed with a new medical condition or your health has worsened, your premiums will increase.

What is the upside to having a high deductible? ›

A high deductible plan (HDHP) can be combined with a health savings account (HSA), allowing you to pay for certain medical expenses with money free from federal taxes. A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses.

Who normally has the cheapest car insurance? ›

The cheapest car insurance company overall: State Farm

State Farm is the cheapest major auto insurance company in the nation for good drivers, according to NerdWallet's 2023 analysis of minimum coverage rates.

What are three factors that can raise how much your home insurance premium is? ›

Here are 10 factors that affect how much homeowner insurance costs:
  • Where you live.
  • The price of your home and the cost to rebuild it.
  • The amount of coverage.
  • Your home's age and condition.
  • Home security and safety features.
  • Your credit history.
  • Additional types of coverage.
  • Your deductible.
Jul 31, 2020

Can I ask my insurance company to lower my premium? ›

Ask about higher deductibles. With a higher deductible, you could lower your premium prices. According to the Insurance Information Institute, raising your deductible from $200 to $500 could lower your comprehensive and collision coverage by 15 to 30 percent.

Can you challenge a life insurance policy? ›

Any person with a valid legal claim can contest a life insurance policy's beneficiary after the death of the insured. Often, someone who believes they were the policy's rightful beneficiary is the one to initiate such a dispute.

How can you lower your monthly premium? ›

How can I lower my monthly health insurance cost?
  1. You can't control when you get sick or injured. ...
  2. See if you're eligible for the tax credit subsidy. ...
  3. Choose an HMO. ...
  4. Choose a plan with a high deductible. ...
  5. Choose a plan that pairs with a health savings account. ...
  6. Related Items.


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