To minimise your monthly insurance premium you should update the insured value of your car at least annually. You should also update other insurance values (such as household contents) annually too.
Update car insurance valueYour monthly car insurance premium is significantly influenced by the value for which your car is insured. The value of your car drops every year, but if you don't revise your insurance policy the 'value' of the car will remain unchanged in the insurance company's books. Carry on doing this for long enough and the annual insurance premiums will exceed the value of the car!
As a result of the above you (by your inaction) will be overpaying on your insurance.
Why?If the time comes for you to claim because, for example, your car has been stolen or written off, you will be paid out for the CURRENT market value of your car, not for the HIGHER value for which it is insured.
Update household insurance valueSome things rise in value (for example the contents of your house). Remember to update these value annually too.
Why?
In the case of household contents the insured value will determine the payout CEILING. So if half of your household contents (by value)are stolen the MAXIMUM payout will be half the total insured value. If you are UNDER-insured you lose. If you are OVER-insured you do not gain.
But, when in doubt, slightly over-insure. You will not be paid extra, but it will prevent you from being under-paid-out.
Adjust insured values annuallyAnd remember, review, and adjust, the values in your insurance policies annually. Generally household contents will rise in value, and the value of your car will fall. It is VERY MUCH in your interest to update them annually.
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