Car insurance advice for every situation
There are many different types of car on the road, as well as many different types of motorist. So, naturally, there are many different types of car insurance policy to suit their needs.
A young driver who has recently passed his test and wants to insure a second-hand car will not want the same cover as, for example, a more experienced motorist who regularly takes their vehicle abroad.
The choice of policies – and insurers – can help to bring down the cost of car insurance quotes as companies compete for your business. But it can also lead to confusion, especially if you are unfamiliar with the market.
Our easy-to-read car insurance advice page can help by giving you the low-down on the different types of motor insurance and the hidden nasties in the small print, as well as money saving tips and advice.
The first thing to make clear is that car insurance is compulsory – you must have a minimum level of third party cover by law. The government is keen to crack down on the number of uninsured motorists on Britain’s roads – estimated at about 1 million – and has recently introduced continuous insurance enforcement.
Basically, the rules mean that if you own a car it must be insured, even if it is in your garage for six months of the year. The only way round the rules is to apply to the DVLA for a Statutory Off Road Notification, or SORN.
The penalties for flouting the rules can be severe. If you are caught driving without car insurance, you could be issued with a fixed penalty of £200 and six penalty points. If the case goes to court, the maximum fine is £5000 and you could be disqualified from driving. The police also have the power to seize, and in some cases, destroy the vehicle.
Different types of motor insurance policy
Ok, so you have to buy car insurance. But which is the best policy? There are basically three different car insurance policy types. The minimum legal requirement, as we’ve noted, is third party insurance, which pays out if you injure another person or damage their property in an accident that is your fault.
For example, if you crash your car into your neighbour’s fence, or reverse into their car, third party car insurance will pay for their repairs. However, the policy does not cover any damage to your own vehicle.
If you want some protection for your own car, third party fire and theft is the next step up. It again insures any third party, but also covers your own vehicle if it is stolen or damaged by fire.
Then there is comprehensive car insurance, which is the most popular choice as it provides extensive cover for you and your car. It also usually comes with various extra benefits, such as legal expenses insurance.
The type of motor insurance policy best suited to you depends on your circumstances. If you have an old car that is not worth very much, third party cover might be adequate. But a driver with a more valuable vehicle would probably select comprehensive car insurance.
Compare car insurance quotes
Price is a major factor in the decision, and third party cover is often cheaper than comprehensive car insurance because it is more basic. Often – but not always. There has been a sharp increase in recent years in the number of people taking out third party cover. It is particularly popular among young people who are eager to cut costs.
If you are thinking of buying third party car insurance, it is always worth checking the premiums against comprehensive cover as you might only have to pay a little bit more for a lot more protection.But young drivers are involved in more accidents than older motorists, so they generate more claims. The price of third party cover has therefore gone up as insurers attempt to recover some of their costs.
If you are thinking of buying third party car insurance, it is always worth checking the premiums against comprehensive cover as you might only have to pay a little bit more for a lot more protection.
The typical cost of car insurance has come down recently. But it can still take a big chunk out of your budget. Young people pay a particularly high price for car insurance cover because they are statistically more likely to make a claim.
Adding an older driver
More young drivers these days are therefore adding an older, more experienced motorist to their policy as a named driver, typically their mum or dad. This can be an effective way to drive down the cost of car insurance quotes because the insurer assumes that the parent will be behind the wheel at least some of the time, lowering the risk of a claim.
But don’t be tempted to bend the truth. If you put your mum or dad down as the main driver, rather than just as a named driver, when in fact the main driver is you, you’d be breaking the law. The tactic is know as fronting and is illegal. You can find out more at our named driver car insurance page.
Choose your car with care
Your choice of vehicle can have a big impact on car insurance quotes. Insurers classify every vehicle into one of 50 car insurance groups according to a number of factors, including engine size and cost of repairs. A car in group one will be cheaper to insure than a car in group 50 because the insurance company is likely to pay out less in claims.
No claims discounts
Insurers typically reward careful drivers with lower premiums. In other words, if you don’t make a claim, you will pay less for car insurance. In fact, a no claims discount or bonus can be extremely valuable, with some firms knocking up to 75% off the annual cost of cover after five consecutive claim free years.
Repairs to the windscreen do not usually affect your no claims record, but it might be worth paying the cost of any other minor incidents yourself, in order to protect a hefty discount.
You can also pay a little bit extra to protect your no claims discount, allowing you to make a certain number of claims within the policy term. The extra cost might be worth paying if you have built up a big bonus.
You can carry your no claims record from one insurer to another, so it does not tie you in to one company. However, the size of the discount can vary. You should also bear in mind that the main driver on the policy accumulates the discount, not any additional named drivers. However, some insurers allow an additional driver to build up a bonus, as long as they then buy their main policy from the same firm. You can find more information on our no claims discount page.
Cutting the cost of cover
There are plenty of other ways to cut the cost of car insurance. It is important, for example, to shop around for a cheap car insurance quote at renewal to ensure you are getting the best deals available. MoneySuperMarket’s free independent comparison service is a quick and easy way to search the market.
You should also think about the security of your car. You will pay less to insure your vehicle if it is kept in a locked garage overnight. You can also earn a discount on your motor insurance premiums if you fit an approved alarm or immobiliser, or take an advanced driving course.
More people these days are also converting to a so-called black box insurance policy where the insurer fits a tracking device, or black box, to the car. The box records when, where and how you drive so the premium can better match your motoring habits. People who drive fewer miles and avoid rush hour and night time driving, for example, tend to pay less for cover.
There is lots more car insurance advice on reducing the cost of premiums on our money saving tips page.
If you are planning to take your car to the Continent, you should check your policy details carefully. Many insurers automatically downgrade cover to the legal minimum required in the relevant country. So, you might only get third party if you take the car to Spain, even if you have a comprehensive policy in this country.
However, some insurers agree to match your UK cover if you take the car abroad, but only up to a certain number of days a year. It’s important that you understand the level of cover before you set off and buy appropriate additional protection if necessary. There is more advice on our European car insurance page.
European breakdown cover
Don’t forget European breakdown cover. It’s bad enough if you break down in this country, never mind abroad where you might struggle with the language and the paperwork.
The costs of a breakdown on the Continent can also be eye-wateringly expensive, especially if it causes a long delay to your journey. A European breakdown cover policy can provide 24-hour assistance – and peace of mind.
How to make a claim
At some point, you will almost certainly make a claim on your car insurance. The claims process can be stressful, particularly if you have been involved in an accident or your car has been stolen, but your motor insurance company should offer some guidance.
It’s important to contact the insurer as soon as possible, while the incident is fresh in your mind. You should also try to gather as much evidence as possible, including any photos. You will be sent a claim form in the post or directed to one you can download off your computer, which you should fill out as requested. If the claim is valid, the insurer should then pay up promptly.
You can find out more information on our car insurance claims advice page.