Cheap not always cheerful for motor cover

As a compulsory and typically much resented expense for all drivers, motor insurance is probably the most shopped around for financial product

Consumers now have the right to 15 days' notice of their renewal date, making it easier to ring around and find cheaper quotes.

But cheapest is not necessarily best when it comes to motor insurance, the Irish Financial Services Regulatory Authority (IFSRA) said earlier this week, as it published its fourth cost survey of the market.

IFSRA suggested that motorists should consider forking out for a higher cost insurance policy that includes benefits designed to protect the drivers' no-claims discount (NCD) in the event of a claim.

Keeping the NCD intact is important if motorists want to keep their annual insurance costs down in three figures, and often drivers will decide not to make small claims for accidental damage because of the knock-on effect this could have on their insurance costs.

All insurers charge extra if the driver wants NCD protection for any claim, which usually means that they can have a certain maximum number or value of claims within a set period and still keep the full discount.

But some insurers include measures that will protect the NCD in certain situations.

One such company is AXA, which emerged as one of the most expensive motor insurers in this week's IFSRA survey.

For example, for a 52-year-old artist living in Co Offaly and driving a VW Passat 1.8 saloon, AXA gave a quote of €674 compared to €435 from Quinn Direct.

However, AXA was one of three insurers to include a "step back" bonus system in the quote.

"Step back" bonuses partially protect a driver's NCD. For example, if a driver makes a claim, they may lose only 30 per cent of the discount.

Eagle Star and Royal & SunAlliance also offered "step-back" bonuses as part of their quotes.

NCD protection for fire and theft claims is another benefit that consumers might consider paying more for.

AXA and Hibernian included this automatically in most of the quotes they gave to IFSRA, but drivers who are interested in this protection might consider asking potentially cheaper insurers about the cost of adding it on.

AXA also uses a dual no-claims discount scale. This means that claims for accidental damage do not affect the no-claims discount for third party claims, and vice versa. Finally, insurers sometimes allow windscreen claims without withdrawing the NCD.

The IFSRA survey revealed that Eagle Star, FBD, Hibernian and Royal & SunAlliance include this benefit without charging more. At AXA, the extra cost was €19.05, while Allianz and Quinn Direct did not offer it.

Other benefits drivers should look out for include personal accident cover, free recovery service, free replacement or car hire, personal effects cover and an extension of the insurance to cover driving other cars.

Further information and IFSRA's motor insurance surveys are available at www.itsyourmoney. ie, from its consumer centre at College Green in Dublin or by calling its consumer helpline on 1890 777 777.