Shopping around "best way" to cut insurance costs

Shopping around for a good deal is the best way to cut insurance costs, the Association of British Insurers (ABI) has advised consumers.

However, people should ensure they take out a policy that provides the cover they want and not just opt for the cheapest, said ABI spokesperson Malcolm Tarling.

He commented: "If you use price comparison websites ... make sure you actually check the terms and conditions and make sure you are getting like for like.

"If you do that you can still, even in these tough times, make some significant savings."

Mr Tarling added that the cost of insurance has to reflect the likelihood of a customer making a claim.

He also reminded consumers that despite predictions of rises in insurance costs, the market is still competitive and that even if one insurer increases premiums, others will not necessarily follow suit.

Figures from Sainsbury's bank show that between July 2007 and June 2008, the average car insurance premium has increased by 5.8 per cent to £514.36.

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