Petrol prices crept over the €1 per litre mark. Traffic jams seemed just as sticky as ever. For once, it was the cost of motor insurance that provided respite for some drivers during 2004, writes Laura Slattery

Premiums fell by around 15 per cent between September 2003 and September 2004, according to figures from the Central Statistics Office (CSO), while in November a mystery shopping exercise conducted by Catalyst Market Research on behalf of the Automobile Association (AA) found that premiums fell by 10 per cent over the previous 12 months.

The average drop in cost over the period clocked in at €100, the AA said.

Despite these findings, 73 per cent of people responding to a recent online poll by the Motor Insurance Justice Action Group (MIJAG) answered "no, I'm being totally ripped off" when asked if they were happy with the current cost of motor insurance, with a further 18 per cent opting for "no, it's still too expensive".

However, drivers are hardly likely to seek out a campaign group's website if they are completely comfortable with the premiums they are paying.

Nevertheless, in its final report to the Government last month, the Motor Insurance Advisory Board (MIAB) said insurance industry data for 2004, which shows that motor insurers more than doubled their profits last year to €395 million, suggested that there was "immense scope" for higher premium reductions than those secured so far.

However, the speed at which premiums are coming down appears to be levelling off, according to the AA and the CSO.

The AA and the Irish Insurance Federation (IIF) blame a higher number of road deaths and problems with road safety enforcement for the smaller reductions of late.

Road fatalities have been heading in the wrong direction, according to Mr Michael Kemp, chief executive of the IIF.

As of Monday morning, 359 people have been killed in traffic accidents this year, compared to a total of 336 last year.

It could be argued that the premium reductions to date are mere shavings off the extremely high quotes that dominated a nightmarish motor insurance market that was especially tough on younger drivers and provisional licence holders - as well as those who had the temerity to make a claim.

But according to Mr Kemp, premiums escalated until the spring 2003 and have fallen by 18-19 per cent since then.

"If you allow for general inflation, the market is back to where it was at in 1999," he says.

Those who were squeezed the most should notice more of a difference now, he believes.

"I think it is probably true that high-risk, less-experienced and younger drivers see greater increases when premiums are going up and greater decreases when they are coming down," Mr Kemp adds. "But it is still a fairly tight market for young males."

Mr Kemp does not agree that the profits reaped by the insurance industry during its "bumper year" of 2003 should precipitate a further plunge in premiums.

"I don't think that there is more scope for premiums to come down because of last year's statistics. It was certainly a good year, but there had to be some clawback for the previous years."

However, the effects of some MIAB recommendations, such as the establishment of the Personal Injuries Assessment Board, have yet to be felt and should eventually bring more savings to motorists' pockets, Mr Kemp adds.

While drivers wait for insurance companies to pass on their profits in the form of lower premiums, there are ways in which they can help themselves.

Pass your driving test

It may sound obvious, but passing your driving test at the first opportunity will have a dramatic effect on premiums.

One in six motorists in the Republic hold a provisional licence and face being charged a loading of around 30 per cent or even higher, depending on the insurance firm.

Some insurers just aren't interested in chasing the business and may refuse to quote, meaning that there is less competition at this end of the market.

Surveys of the motor insurance market by the Irish Financial Services Regulatory Authority (IFSRA) show that FBD, Quinn Direct, AXA and Eagle Star have quoted both male and female drivers for each of the hypothetical provisional licence drivers proposed by IFSRA. But some of the premiums quoted have been prohibitive - in excess of €7,000, for example, on a car worth just €2,500.

Shop around for quotes

Motorists can pay twice as much for their motor insurance if they choose the most expensive insurer rather than shopping around to find the cheapest quote, according to various IFSRA surveys.

In fact, some younger drivers can save up to 500 per cent by doing the maximum possible research before buying.

Consumers have the right to 15 days' notice of their renewal date, which should be enough time to find the best deal.

"Certainly, we always recommend to people that they should shop around for quotes," says Mr Kemp. "The market changes on a week-to-week basis, if not a day-to-day basis."

Investigate incentive schemes

There are two main schemes on offer.

AXA's Traksure programme is open to male drivers aged 17-25 who allow the company to install GPS satellite technology software to the car.

The device allows the company to monitor whether or not the driver is keeping within the speed limit in any given location and can lead to 50 per cent lower premiums.

A more popular scheme, however, is Ignition, Hibernian's one-day advanced driver training course for younger drivers. Participants who pass the course are guaranteed a premium discount of at least 20 per cent.

Hibernian has now introduced a one-hour version of Ignition for provisional licence holders. Although participants usually only have to put down a refundable deposit, provisional licence holders have to pay €70 for Ignition. But those who pass will be given a quote that excludes the standard provisional licence loading.

Protect your no-claims discount

Losing your no-claims discount (NCD or no-claims bonus) means that you could end up having to pay double your premium at the next renewal.

But some insurers allow you to protect your NCD either partly or fully. As this is an added benefit, it means a higher premium, but if you do need to make a claim, your valuable NCD remains intact.

Alternatively, for a lower extra cost, motorists can purchase "step-back" protection, which reduces the value of the NCD in the event of a claim by a certain percentage without obliterating it completely.

But the benefit of having this protection can be wiped out if you decide to switch insurers, according to IFSRA.

Although you can transfer your NCD at renewal, you might not be able to transfer the NCD protection, IFSRA warns. If the new insurer does not recognise the NCD protection, it will calculate the no-claims period from the date of the last claim.

This can make it costly to switch insurers, even if the other insurer is offering a lower basic premium, IFSRA says.

There are plenty of other ways to cut costs

At some insurers, if you agree to a curfew on the hours you drive, you can save money. Storing the car in a garage at night also helps.

You can skimp on the type of cover you buy - only third-party cover is compulsory and quotes for third-party, fire and theft cover are about 5-10 per cent lower than comprehensive cover. But this could prove to be a false economy if your car is written off in an accident.

Male drivers can get premium reductions if they put a spouse or female partner as a named driver on their policy, as insurers believe that if a woman is driving the car some of the time, the risk of the car being involved in an accident is slightly reduced.

Finally, cut your engine size, opt for a more modest car and your premiums should dip nicely.