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Low Rates Attract Insurance Customers

If you are struggling to make ends meet, you may be looking for ways to cut costs in your monthly bills. One way to save money in the UK: cheap car insurance. UK drivers have been saving money on monthly premiums for years, but not everyone is aware of the pricing wars going on in the insurance industry. Car insurers are lobbying for business, and they are trying everything they can think of to get you to switch to their companies.

After all, what is car insurance, really? From the perspective of the insurer, it is funds coming in from a variety of policyholders, each of whom pays a fee to mitigate risk. The funds are all collected, and when one policyholder loses the risk game, money is doled out in compensation. Statistically speaking, certain drivers are more likely to draw from the money pool than others, and the insurer knows this. However, these statistics can be measured in per cent. The actual money that the insurer makes is in the funds not distributed. Therefore, the higher the number of policies an insurer maintains, the higher the profit the company sees from those policies.

With that in mind, it is easy for a consumer to understand why insurers want to maximize the number of policies they sell. Because insurers know that consumers are savvy, they recognise the need to make their policies more attractive than the policies offered by the competition.

That sounds easy enough, in theory. On the other hand, consider again what car insurance is really. It is nothing more than a fee for certain coverage services. There are few variables an insurer can offer to a consumer, and they include: low rates, good service, and coverage options. What makes one insurer more attractive than another?

Low rates are attractive. Some consumers would argue that good service is worth extra money, and that may be true. But that service is only necessary in the event of making a claim, and if you never make a claim, service is meaningless. If you are at a low risk of sustaining an accident in your vehicle, this may not motivate you.

Even if you do make a claim, good service is relative. Some insurers have built reputations for poor service, and these insurers are easy enough to find with an Internet search. If you find comments against insurers from other consumers, then you will know to stay away from the company.

If you have not heard negative feedback on an insurer, chances are that the insurer is decent enough. After all, nobody talks about how wonderful their insurance company is. So shop around and find the lowest rates, and save money.
 

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