There are some things you know will make your insurance more expensive: making a claim, having an expensive car, a timber-framed house or a designer dog will all push up your premiums.
Even renewing means a price increase. The average cost of car cover is up 29 per cent in a year to a record £561, while home insurance is up 15 per cent to £350, according to the Association of British Insurers.
But watch out if you are trying to cut the cost of your cover — some things that you might think would reduce your premiums can actually have the opposite effect. Here’s what to watch out for.
Car insurance is a legal requirement, but there are different levels of cover. The minimum is third-party insurance, which covers damage you cause to other vehicles but not your own.
In November the comparison site Confused.com said that about 4 per cent of people were opting for third party, fire and theft cover, up slightly from 3 per cent a year before.
You might assume that a lower level of cover would mean a lower premium, but this is not the case. The average fully comprehensive insurance policy was £1,443 last year, Confused.com said, but it was £2,146 for third-party, fire and theft, and £3,462 for third-party only. This is because insurers think third-party only drivers are riskier, perhaps because they cannot get fully comprehensive cover.
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Where you park
You might think that parking a car safely in a garage, away from prying eyes and any hazards, would cut your car insurance.
But the average cost to insure a car kept in a garage last year was £710, compared with £656 for one kept on a driveway. If you park it on the street it will cost you more, at an average of £729, according to the consumer website GoCompare.
Tom Banks from GoCompare said: “Insurers may feel that garages can pose their own security risks. If the garage is connected to your property, your car could be taken in a home break-in. And if the garage is unconnected you may be unable to hear the thief.”
Insurers may also feel that a car is more prone to bump and scrapes if it is kept in a garage, he said.
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Renewing too late
GoCompare said the best day to buy home and car insurance is 27 days before your renewal or policy start date. Home insurance is 19 per cent more expensive if you buy it two days before, and car insurance is 50 per cent more if you leave it until the day before.
Renewing too early has a smaller impact but is also worth avoiding for penny pinchers. Money looked at the cost of combined buildings and contents insurance for a two-bedroom flat in southwest London with a £100 voluntary excess. The cheapest quote on the Compare the Market website was £189 from More Than Essentials when the start date for the policy was in 27 days. When the start date was changed to 30 days, with no other changes, four of the five cheapest policies became more expensive, although only by a few pounds a year.
When the renewal date was the next day though, the cheapest quote was £234.47 from More Than Essentials. So while you may pay a bit for renewing too early, it is far worse to do it too late.
Too much excess
When you take out an insurance policy you can choose a voluntary excess on top of your insurer’s excess — the amount you pay in the event of a claim, which can be anything from £0 to hundreds of pounds.
It is accepted wisdom that a higher excess means a lower premium, but actually this only works to a point. When Money adjusted home insurance quotes through Compare the Market, premiums stopped getting cheaper once the voluntary excess was increased above £400.
The cheapest car insurance for a 2007 Vauxhall Astra with no voluntary excess was £364 from Hastings Direct. With a voluntary excess of £200 and the same insurer’s excess of £95, the quote fell to £357, but with a voluntary excess of £300 it climbed to £374.
James Daley from the consumer group Fairer Finance said that those who chose a very high excess could be perceived as riskier by insurers. It is also worth considering whether the small saving will be worth it if you have to make a claim.
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Getting in a flap
Pet insurance is already expensive, but your furry friends could be pushing up your other policies too. Installing a cat or dog flap might stop Fluffy from damaging or making a mess in the house, but you will need to declare it to your home insurer or risk your policy being invalidated.
A cat flap can also signal to would-be burglars that there is no alarm on the property, potentially making you more vulnerable to a break-in.
Making a single claim on your home insurance can add an average of £91 to your premium at renewal, said GoCompare.
Adding accidental damage to your policy (which costs about £10 a year) could mean you are covered if Rover knocks over the telly or Thumper chews through some wires, but this is not guaranteed. Many insurers will not cover damage caused by pets, so check the small print.
Single-trip travel
When you choose single-trip cover for a specific destination, the price is determined by factors such as the risks associated with the country and cost of medical treatment there so if you are going somewhere risky an annual policy may be cheaper.
The consumer group Which? found that a 70-year-old would pay £163 for a worldwide annual policy, which covers travel to about 170 countries. If the same person bought cover for a single three-week trip to China it would cost £404, and a two-week trip to the United States would cost £208.
Those with medical conditions, though, may find it cheaper to insure trips separately. Which? found that a 60-year-old with high blood pressure would pay £86 for an annual world policy, but £79 for cover for a three-week trip to China and about £75 for a fortnight in the US.
Make sure you check any policy carefully so you know exactly what you are covered for.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.