Two Year Car Insurance Lock-In – Blessing or Curse?

Car insurance. Like medicine, it’s there for emergencies. And even if we grumble about insuring our car, it’s 100% better than an ezlink card and a bus that’s 17 minutes away… Want to swop? No, didn’t think so.

As with everything money related, there’s choice. Some insurers are even trying to tempt new customers to lock into a two year car insurance policy, promising a “host of benefits.” In reality, these benefits boil down to saving you about 10% on your premium and the time it might take you to look for a cheaper option.
 

“An executive of a competing insurer, who asked not to be named, described a two-year policy as a "hedge on premiums'".
 

The insurance executive said:

"By paying for two years in a row, a motorist will hedge on premiums if they are rising. But if premiums are falling, then the insurer locks in the price for the second year." Business Times, May 25, 2016
 

Curse or Blessing?

If you don’t care about the cost of car insurance, a two year lock-in will save you some time and a little money. You don’t have to worry about paying late, or having your policy lapse because you missed a payment.

But as you can set up affordable car insurance online – in five minutes – we’re not talking hours of your valuable life. More like the time it takes to boil an egg.

If you like your hard earned dollars to work harder, you’ll want a policy that works for you, saves you money, and fits with your lifestyle every year. Not every two years.

The desire not to be hassled, or worry about your payments by locking into a two-year plan can become a curse if you decide to change your car or move abroad for example. Or if you find a much better, value-for-money policy elsewhere, like one that gives you a personal claims specialist, a two year lock-in takes away your power to choose. And switch.
 

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