It can be confusing buying the best car insurance policy – not knowing what you are covered for or what you need to check for each policy.
The good news is there are clear and easy steps to follow to make sure you get the best cover – whether you have a new or old car.
Here is what to remember:
Car insurance really is a necessity, but there are many ways to reduce your premiums and still be covered, although you will have to pay for certain extras
Every provider has a different policy and a different question to ask.
Some ask how old your car is – you need to check this because these are often priced more, while others can’t be classed as ‘new’ unless you’ve had it for five years or more.
Others ask how many miles you drive each month – some policies say 100-150 and others say 150-300, so shop around for a policy that suits you.
Some insurance policies will tell you if you can drive a hire car if you are away on holiday, as some firms consider hire cars as more of a liability – so check with your insurer if you intend to drive a hire car.
But even if you do choose a policy that doesn’t cover your hire car, it may not cover repairs on a collision as they may fall under another policy.
You’ll also need to be sure that it pays you if you are in an accident.
People have been fined for driving on a provisional license without insurance, while some companies say you need to have been on a policy for six months.
However, several insurers will allow you to drive without insurance if it means you can work for a few weeks and pay your premium – one provider even offers ‘devo-max’, where you can drive without insurance for seven days before you pay.
In some instances, you’ll need to be prepared to show proof of third-party cover and emergency funds.
Some policies will give you a bonus if you keep your policy up to date – so see if you can negotiate this and still qualify for some cheaper premiums.
MOVING TO ANOTHER CAR
Some insurers offer discounts if you buy a new car – if you’d prefer to keep the same policy that could work out cheaper.
These discounts can be bigger if you are with a premium assurance or through a third-party insurer.
New cars do tend to have higher premiums – for example they can be £100 more a year in some cases.
So the discount can be as little as a quarter of that. However, it’s a long-term discount and not a one-off offer, so you may not qualify.
To see the best deals, go to the Telegraph’s comparison website Compare the Market.
Different policies will offer different extras.
Some add high excess – the amount you are expected to pay if you hit an uninsured driver or if your policy falls through.
Other policies will cover you if your policy is stolen or damaged.
It may also offer other perks, such as insurance for your pet, cover if your car is parked in a disabled space, or a lock-out service in case you lock yourself out of the car.
It may also cover your mobile phone.
REASONS FOR BUYING AWAY FROM THE CURRENT SELLER
It can be more cost effective to change insurers from one company to another, or from premium assurance to a premium warranty.
Premium assurance companies offer a premium discount in return for you abiding by certain exclusions in the policy, such as not using a phone in the car.
But there is a downside – the discount on your premium may not be as much as you’d expect because you have to pay for insurance anyway.
If you need a policy urgently, you could opt for a premium warranty which will give you a discount. But you will still be covered.
But if you don’t need to change, don’t panic. If you are with a premium assurance policy, you have no option but to stick with that company.
However, if you do want to change policies, many insurers don’t offer the best deals unless you come with certain guarantees – for example they must cover you if you do have an accident.
But if you think it’s worth a gamble and you need a new policy, call your current insurer to see if they can match your requirements.
If they are not able to match your demands, you may be able to get a lower price with another firm – so see what they have to offer and then look around for more than one deal before making a decision.
WHEN TO CHANGE
To see if your current policy would be cheaper with another company, call your insurer and ask for your renewal quote.
Make sure that any discount for staying with your current insurer is shown in the price.
Some premiums will rise if you change insurer – some companies tell customers in a big premium increase and others are quite quiet on the subject.
But many premiums will also increase to ensure your cover is still there if you do fall foul of a no-claims bonus or accident.
Alex Neill, managing director of home insurance at online broker MoneySuperMarket, said: ‘If you’ve paid extra for a comprehensive motor insurance policy, make sure that the insurer’s promise of covering you in the event of an accident is included as part of the price.
‘There’s no point buying your cover, only for it to stop you from using it.’
TOP FIVE REASONS TO CHANGE YOUR INSURANCE
Most insurance companies will try to bump up the price of your premium before they renew your policy – so check and see if they can beat it.
If your premium is currently £100 a year, it may jump to £130.
Customers could also find that they no longer qualify for the discount if the car is no longer under their ownership.
If you no longer drive the car, you’ll likely have to pay more if you want to get a car insurance policy.
This is because the higher the risk of an accident or theft, the higher the premium is – which could mean people will have to spend a lot more to get cover.
You’ll need to consider a number of factors to see if the cost of getting insurance is worth it.
Has your car been stolen recently, or do you have a lot of no claims points?
If you own a pricey car, this is going to be very expensive for you.
For those who drive budget cars, the cost of insuring a car can be quite low – so they may be better off with a cheaper policy.
For those who have used a mobility scheme, the cost of getting cover is going to be higher, as you don’t get any discount for staying with the scheme.
The cost of car insurance in Great Britain In 2013 a high profile price comparison between the cheapest and most expensive premiums had been done by MoneySuperMarket.com. But in a shock move last year, Which? Magazine launched a new car insurance price comparison service. They got prices from eleven different companies, and found out that you could save an average of £157 a year by switching from the best car insurance company to the worst one. On average, in 2013, the cheapest premium was £432 for the best insurer, while the worst premium was £732. The average cost to insure the same car, with the same provider, was £756, according to the new study.
There is also a tax-free compensation for accident claims that may be cheaper if you keep the same car insurance.
For the best deal on your car insurance, you should shop around and check out comparison sites which will tell you the lowest prices and the highest discounts.
Tax-free compensation for accident claims is available if you have comprehensive cover, which means it will pay out if there is a serious injury or death of a family member or friend.
If your cover only includes third party, which covers people who are hit, you won’t get any of the tax-free compensation for accident claims.
HOW TO FIND THE BEST RATES
When it comes to car insurance, good deals and high-value vehicles are rewarded. A variety of factors play a part in what you pay when you come to renew your insurance premium. But one of the most important is where you live. Your local authority could be a big factor when it comes to premium costs, because they will be able to predict the likelihood of you becoming involved in an accident. Insurance companies are also becoming more realistic on how they calculate premiums. For example, they use a risk-based calculator to calculate how likely you are to claim, as well as when it will happen. These tools are designed to encourage people to take more care on the roads, which leads to a lower premium. The calculation also takes into account your risk of catching disease, which may lower your premium. However, if you have a higher premium, that won’t necessarily mean you’re paying too much for your cover, as the premium can sometimes be charged over two premiums, for the same level of cover. Also, some insurance companies offer discounts for particular risks, such as being female or living in a high-crime area, as these can be more expensive to insure than more popular risks. To avoid paying too much for your car insurance, always shop around and get quotes from a range of different insurers. You can find out more about how to compare car insurance prices here.
Buying comprehensive car insurance can be a nightmare, with insurance companies constantly changing the rate they are charging for each insurance policy.
High levels of no claims discounts will often not be enough to compensate if you pay a higher premium to cover a more expensive car, as you will have to spend more money to insure it.
And it’s not just about how much you spend, you also need to ensure you have enough no claims points to make your insurance policy worthwhile.
There is no maximum limit on no claims points which means it is entirely up to the insurance provider how many points they calculate you need.
If you have a car with a higher than average towing weight, you might find it pays to upgrade to the maximum in excess of the no claims discount.
As cars are getting more powerful and heavier, it’s not uncommon for a new car to have double the number of points as the previous model and if you’re in an older car, an upgrade will give you the peace of mind that it will be able to handle the extra power of your new purchase.