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Get a quoteSeven ways to get cheap insurance in 2024
With car insurance premiums rocketing and home insurance costs on a seemingly similar trajectory, is it possible to get cheap insurance that's worth having?
The last 12 months have seen relentless prices rises and it's unclear whether these will slow in 2024.
To appeal to cash-strapped customers, insurers have continued to strip out cover from their policies. However, it's still possible to buy a good-quality insurance policy without bankrupting yourself.
Here, we look at seven tips for saving money on your insurance, as well as three actions that might appear to save money – but are more likely to cost you dearly.
1. Shop around
Yes, 'shop around' is an old cliché but it still holds true and has special relevance when unprecedented price hikes are stinging millions of customers.
You don't know whether the price your insurer offers you is typical, or far higher than its rivals offer for similar cover.
Most insurance is personally priced, meaning you get a different price depending on your personal circumstances. So the only way to find out which prices are 'standard' for you is to look at the market.
Fortunately, this can be done fairly easily by running quotes on comparison websites. If you can, try several comparison sites, as you'll get a wider impression of the prices available and companies willing to quote.
2. Haggle
Which? research continues to show that the figure on your insurer's renewal offer probably isn't the best it can manage.
When we surveyed nearly 2,000 drivers in September 2023, most who had renewed with their insurer had discussed their price with it. Seven in 10 hagglers managed to secure a discount. Most who had paid annually managed to secure discounts of up to £40 – though one in eight saved over £100.
It's worth noting that most people who haggled found the process easy and didn't have to make any changes to their cover to get a price reduction.
When haggling, it's best to shop around first. If you've found more reasonable prices elsewhere, you can use this information to explain why you're unhappy with the price your insurer is offering.
- Find out more: our guide to haggling
3. Pay annually (with the help of a card)
According to research by finance company Premium Credit, the increasing costs of living are driving more of us to use credit to pay for insurance. While paying for insurance in instalments can make the costs easier to manage, interest charged on the monthly payments increases the amount you pay overall.
Paying annually could potentially reduce the premium by hundreds of pounds. If you need to spread your payments, one alternative to paying your insurer in monthly instalments is to buy cover upfront with an interest-free credit card, and pay off a 12th of the card's balance each month.
At the time of writing there were 18 cards available that charge 0% on purchases for at least 12 months.
- Find out more: see our best credit card deals
4. The early bird gets the cheaper insurance
Leaving it to the last minute to buy insurance can cost you money. With car or home insurance, you'll often get a cheaper price if you buy your cover a few weeks (rather than a few days) in advance of the policy's start date.
Doing your shopping around early also allows you to more widely research the market or negotiate your insurer's price to make sure you get the best deal.
And with some types of cover – such as travel insurance – you'll get better value from the policy the earlier you buy it (even if you pay the same premium as you would buying it at the last minute).
For example, with most travel insurance, you benefit from cancellation cover from the moment you've bought the insurance. This protects you financially if something unexpected means you have to cancel your plans.
- Find out more: travel insurance explained
5. Pick the cheapest channel
The way you buy your insurance can have an effect on what you pay for it, even if the cover is the same.
Typically, buying online is cheaper than buying over the phone – and in some cases, insurers sell cheaper versions of their insurance policies on comparison sites than on their own websites.
This is sometimes the reason customers get cheaper offers from their insurers when they shop around, compared to the offers sent in their renewal letter. It reinforces why shopping around is so important.
6. Check a travel insurance directory
If you have severe or complex medical conditions to declare, searching for affordable travel insurance can be a demoralising quest – with insurer after insurer declining to quote, bunging in exclusions or asking for eye-watering prices.
What makes it especially tricky is insurers that specialise in providing cover for people with medical conditions often lie off the beaten track (ie, don't appear on comparison sites).
One way to track down specialist firms is to check specialist directories on the British Insurance Brokers' Association (BIBA) and Moneyhelper websites.
These directories have been around since 2021 but aren't widely known. In 2023 we found that nine in 10 customers who had tried one said they got better prices from a listed firm than from other insurers.
- Find out more: our ratings of specialist travel insurers
7. Buy cover that fits your needs
Don't pay money for cover you don't need. This may seem obvious in principle, but it can be easy to lose sight of exactly what cover you do (or don't) have when faced with complex insurance T&Cs.
Check to see what insurance you might have already as a result of owning other products (such as bank accounts) that include some insurance as a bonus.
Think through the add-ons insurers present you with. If you're being offered enhanced courtesy car cover with your car insurance, consider if it's vital to have a replacement car if – for example – you already have access to another vehicle.
Similarly, you probably won't need £5,000 cancellation cover with your travel insurance for a holiday costing £500.
With most types of insurance, you can also bring down the price by adding or raising your excess – meaning you're covered specifically for costs you can't afford to pay out of pocket.
- Find out more: best packaged bank accounts
What not to do for cheap insurance
Ditching insurance that you need
According to research by The Green Insurer, 7% of drivers quizzed in a survey admitted to having driven an uninsured vehicle due to the high cost of policy premiums in the last year. While this cost-cutting action could land you in court, you could also come to regret less extreme measures – such as cancelling your pet or contents insurance – if disaster strikes.
No-one wants to have to use their insurance, and no-one enjoys paying for it, but ditching your cover could be a false economy. The key question to ask yourself is, what financial situation would you be in if faced with a cost you'd otherwise be able to claim for – whether that's paying steep vet's bills or replacing expensive possessions.
Buying cover that doesn't meet your needs
Getting unsuitable cover is, arguably, as bad as not taking out cover, as you're paying for a false sense of security. Insurance is increasingly designed to be quick and easy to buy with a few clicks. But it pays to take the time to read the T&Cs before buying cover.
Realistically, most of us don't read policy wordings cover to cover. However, you can make a list of features of cover that are crucial to you, and check that these are clearly included within your policy before buying it. If there's any ambiguity, contact the insurer.
Giving inaccurate information
Omitting or changing a few personal details might mean a smoother purchase and a cheaper price, but could leave you paying for insurance that's effectively worthless. If an insurer becomes aware that you've misrepresented your circumstances when applying for insurance or later on, it can potentially nullify your cover and reject any claims – potentially costing you huge amounts.
