Staying loyal to your car insurance company could cost you hundreds of euro a year, a personal finance journalist has calculated.
Last year, new legislation banned insurance companies from charging higher rates to returning customers - the so-called ‘loyalty penalty’ - while new customers are offered cheaper deals to entice them to switch.
The ban is aimed at helping those with no interest in shopping around but Charlie Weston of the Irish Independent believes that it is still worth doing.
“Loyalty is the big enemy of consumers when it comes to motor insurance,” he told Newstalk.
“The Central Bank has attempted to do something about that by trying to ban ‘dodgy premiums’ if you like where insurance companies penalise you every year [if] you stay with the same company instead of rewarding your loyalty.
“There was a profile of different drivers done by InsureMyCar.ie and it shows that the average is about €300 between the best value and the worst value in the market.”
Many insurance companies favour a certain type of driver - some offer better deals to the elderly, others to couples or those who drive a diesel vehicle; meaning many drivers are unaware that they could save a significant amount by switching.
“You’d be better off going to a broker who represents a decent number of insurers or doing the work yourself,” Mr Watson said.
“Because this ban on ‘dual prices’ - where they’re not supposed to punish your loyalty - they’re sending out renewal notices saying ‘We’re giving you a little discount here, you don’t need to walk’ - don’t be fooled by that. It’s a slight cut.
“You can do far better by checking out the market and it’s a complicated product; everybody is quoted a different price because of the different risk factors.
“So, it’s very hard to know whether you’re getting good value or not and the only way is researching the market and shopping around because despite these new Central Bank rules, people are still being ripped off.”
Main image: Motorway in Dublin