Which motor premium?
With insurers predicting a huge tax hike on motor insurance in next week's budget, now is the ideal time for teachers to take advantage of the special deals available to them.
The fear is that Chancellor Gordon Brown will be only too ready to help John Prescott, deputy prime minister, achieve his "green" aim of getting more cars off the road. The insurance industry is now expecting tax on motor insurance to be increased from 4 per cent to 17.5 per cent, on a par with VAT. This would mean an increase of about Pounds 50 on the average comprehensive motor premium of Pounds 366.53. For those in higher-risk categories, like young men in their early 20s, the increase could be far higher.
This is gloomy news for motorists, as insurance premiums are already on their way up. Last year, after a short period when prices fell, the cost of motor insurance rose by around 4 per cent.
The AA thinks raising insurance premium tax would be grossly unfair. "As usual, the law-abiding citizen is being penalised," said an AA spokeswoman. "Insurance is not a luxury, but compulsory. A tax increase would particularly penalise younger drivers living in high-risk areas. Why should you be taxed extra because you are young or live in an inner-city area?" The Association of British Insurers is also highly critical. "A tax rise would impact most on the least well-paid," a spokesman said. "The lowest-paid 20 per cent could end up paying four times as much as the highest-earning 20 per cent because they are more likely to live in high-risk areas."
Fortunately, the good news is that teachers are in such a low-risk category that many companies are keen to offer them special incentives which could help to offset any tax rises.
According to research by Zurich Municipal, classroom discipline means highway discipline; teachers make among the lowest number of claims of any professional group. Not surprisingly, therefore, Zurich Municipal offers a 15 per cent discount to teachers on all motor insurance premiums.
Endsleigh has just launched a new motor insurance scheme aimed specifically at "education professionals" - teachers, lecturers, inspectors and administrative staff. Benefits include medical expenses, which will cover hospital and counselling bills of up to a total of Pounds 2,000 for teachers who have been assaulted at work. There is also Pounds 250-worth of cover for malicious damage while the car is parked on school premises.
Teachers should scrutinise the fine print for the additional benefits thrown into a package.
The AA advises people to note any policy exclusions, as it may be worth paying a little bit extra to get the cover you need. Some insurers may not offer cover for professional use, like transporting pupils, for instance. But Frizzell (now part of Liverpool Victoria), Zurich Municipal, Commercial Union and Endsleigh assume that teachers will need to use their cars for professional duties.
Members of the National Union of Teachers are protected by a group policy for personal risk. The union policy offers up to Pounds 8,000 compensation for death or injury at the wheel while teachers are on school business. Up to Pounds 80 cover for malicious damage to cars on school premises is offered by the NUT and the National Association of Schoolmasters Union of Women Teachers.
Union members may get extra discounts with particular companies, depending on the degree of risk. Frizzell will give members of the NUT and National Association of Head Teachers between 15 and 25 per cent discount on insurance premiums. Commercial Union discounts premiums by 20 per cent for NUT and Association of Teachers and Lecturers members. The NASUWT has special arrangements with Boncaster and Endsleigh.
Although teachers will definitely get a better deal than high-risk drivers such as journalists and doctors, the AA warns that factors such as your age, the type of car and, most importantly, where you live, could still bump your premium up considerably.
For a hypothetical 22-year-old single male teacher, driving a J-registered Golf and living in Stoke Newington, London, Zurich Municipal quoted Pounds 591.67 for fully comprehensive cover, with an excess of Pounds 100. If the same teacher aged overnight by six years, the quote would plummet to Pounds 390.72. For a 42-year-old married female teacher driving an N-registered Citro n ZX 1.8 and living in Bournemouth, Zurich quotes Pounds 173.33.
Endsleigh's quote for the 28-year-old man is Pounds 363.43, and it would charge Pounds 192.34 for the 42-year-old woman, with extra discounts for NASUWT members. A Frizzell policy would cost the man Pounds 400, or Pounds 300 if he joined the NUT, while the woman would pay Pounds 280, reduced to Pounds 220 for an NUT member. Commercial Union quoted Pounds 422.80 for the man and Pounds 188.95 for the woman.
The message is that it is well worth shopping around to get a bargain, but the cheapest policy may not be the one that suits you best; you must calculate all the add-on benefits, too.
Boncaster: 0345 959505; Commercial Union: 0800 010199; Endsleigh: contact your local branch; Frizzell: 0800 748748; Zurich Municipal: 0800 445588; AA Insurance Quotation Line: 0800 444777
HOW TO REDUCE YOUR MOTOR PREMIUM
* Compare quotes from a direct insurer and a big broker - the broker will do a lot of the shopping around for you.
* Consider having only yourself and one other named driver on the policy.
* Make sure you know what's included in the policy - some companies offer more than others.
* Take out a high optional excess, eg Pounds 200.
* Use a high level of security on the car, eg an alarm, a tracker device or an immobiliser.
* Take advantage of low-mileage discounts if you do fewer than 8,000 miles a year.
* Make sure that you garage your car overnight.
* Try to hang on to your no-claims bonus by limiting the number of claims you make.