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What To Check For When You’re Buying Car Insurance

Checklist

If you’re a new driver looking to insure your car for the first time, or you’re a veteran of the roads pondering whether or not to auto-renew your insurance, you might not be sure where to start. Car insurance can be quite the head-spinner for those who don’t quite know what they’re looking for! Depending on your car, age, occupation and various other factors, car insurance could cost you a pretty penny if you’re not careful. To help you navigate the rough waters of insurance, we’ve put together a handy guide on what to check for when you’re buying car insurance.

Our guide will take you through ten essential questions that you need to ask yourself before buying car insurance—from the level of cover you need to payment options to potential discounts. Find out more below!


① What kind of cover do you need?

First things first, you need to figure out what kind of insurance cover you need for your car. Fortunately, it’s relatively straightforward—for the moment at least! There are three main levels of cover:

Third party
Average cost: £1,169*

The most basic level of insurance cover available, third party cover is the minimum requirement for drivers in the UK. Just to reiterate here, it is a legal requirement for drivers to have insurance, so you’ll need third party cover at the very least. It covers:

  • Damages to a third party’s property
  • Injuries to other people, passengers or animals
  • Accidents caused by a passenger/named driver on your policy

It will not cover the cost of repairs to your car, your own injuries or vehicle replacement costs.

Third party, fire and theft
Average cost: £811*

Next on the list is third party, fire and theft cover (TPFT). Providing a little bit more than basic third party insurance, TPFT also covers you if:

  • Your car is damaged or destroyed by a fire (whether accidental or deliberate)
  • Your car is stolen

Much like third party, it will not cover the cost of your own injuries or damage to your car in an accident.

Comprehensive
Average cost: £514*

Last (but not least!) on our list is comprehensive cover. In case the name didn’t clue you in, a comprehensive policy is the crème de la crème of car insurance. It will cover everything in TPFT, not to mention:

  • The cost of damage to your car in an accident
  • Injuries to yourself
  • Claims for repairs, accidental damage and vandalism

Whilst you might assume that the most basic level of cover would be your cheapest option, as the figures show above, that’s not the case at all. More often than not, a comprehensive policy will work out cheaper than basic third party cover—predominantly due to the risk attached to those taking out third party cover. Additionally, a comprehensive policy provides the best safety net.

*Figures taken from MoneySuperMarket data between October & December 2018


② Who does the policy cover?

Taking the practical test in your own car

It’s not just the level of cover that you need to think about. You also need to consider who the policy needs to cover. In other words, will someone else other than you also be driving the car? If the answer is no, then you can simply skip this step entirely! If, however, you’re intending on letting your spouse, family member or friend drive your car as well, then you’ll need to look at a policy that will cover all parties involved.

This is otherwise known as a named driver policy. With it, you’ll be able to add someone else to your insurance policy so that they’ll be covered when they’re driving your car. Typically, the named driver will get the same level of cover that you do, e.g., comprehensive cover. Now, it’s important that you’re aware of the distinction between the main driver and the named driver. As RAC emphasises, “the named driver should only be driving that car occasionally, not regularly or permanently”. Adding someone as a named driver, despite the fact that they’ll be driving the car the most, is illegal and otherwise known as fronting—a type of insurance fraud.

Your choice of named driver will also end up affecting your premiums, depending on their driving record and experience. For example, young drivers often get cheaper insurance if they have an experienced named driver. On the other hand, if an experienced driver adds a new driver to their policy, their premiums could increase quite a bit.


③ What is covered by the policy and do you need additional cover?

We’ve already discussed the three main levels of insurance cover level that you can purchase. Now, we’re going to look at additional features that you might require with your policy. Some insurers will offer these features as standard with a comprehensive policy, so you won’t have to pay any extra. Other insurers, however, will expect you to pay more for the privilege.

The table below highlights examples of additional cover that you might want to keep an eye out for when looking for car insurance.

Courtesy car

If you’re involved in an accident and your car is undergoing repairs, a courtesy car will help you stay mobile. Some insurers will have a strict time limit in place, e.g., between 2 and 3 weeks.

Breakdown cover

If your car breaks down, this cover will ensure you get the right assistance as soon as possible—from the recovery of your vehicle to repairs. If you’re travelling abroad, you might also want European breakdown cover.

Windscreen cover

If your windscreen is damaged, this cover will ensure it is repaired or replaced after you’ve made a claim. Be aware that some insurers will require you to use an approved repairer—otherwise you won’t be covered.

Legal protection

This cover will help you get back uninsured losses if you’re involved in an accident that wasn’t your fault. You’ll typically be able to claim back for injuries or out of pocket expenses.

Personal accident cover

This cover will offer compensation if you or your partner are injured/killed in an accident involving your car. Please note, some insurers will only cover death, permanent loss of limb or loss of sight.

Car key cover

If your car keys—or the keys to your immobiliser/garage door—are lost or stolen, your insurer will cover the cost of replacing them. Typically, this won’t cover you if you left your keys in or on your car.

Vandalism cover

If your car is vandalised, and the insurer finds you’re not at fault—e.g., that the claim you make isn’t due to poor security or negligence—you’ll be able to make a claim for the cost of repairs.

Protected No Claims Bonus

If you need to make a claim, this cover will ensure that it doesn’t damage your No Claims Bonus. You will be limited to how many claims you can make in a certain period of time.

Personal belongings cover

This covers the loss or damage of personal belongings due to an accident, fire or theft (whilst in your car). Please note, money or debit/credit cards usually aren’t included.

Named driver No Claims Bonus

If you have a Named Driver on your policy, you can get additional cover so that they’re able to build up their own No Claims Bonus with the same provider.

If you found yourself nodding along to some of the cover types shown above, then you’ll need to carefully check what’s included in the comprehensive policies of insurers you’re interested in. As mentioned, some will include many of the cover types above as standard in their comprehensive policies.

And that’s not all! You’ll also want to look at…

How much excess you’ll have to pay

Excess is how much you’ll have to pay out in the event of a claim. The higher your excess is, the less your insurer will have to pay, and the lower your insurance premiums will be. You shouldn’t just automatically opt for the highest excess possible, though. Whilst it might give you a lower insurance price, it could backfire on you.

You need to be sure that you’ll be able to afford to pay this amount in the event of a claim. Look at your options and cross-check with your budget before you decide.

What the No Claims Bonus looks like

Insurers are at their happiest when their customers don’t need to make a claim. That’s why they reward safe drivers with discounts—otherwise known as a No Claims Bonus or Discount. The longer you manage to go without making a claim, the higher your discount will be. The discount rate varies depending on the insurer, so it’s definitely worth looking into.

Here’s an example NCB scale:

  • 30% off after 1 year
  • 40% after 2 years
  • 50% after 3 years
  • 60% after 4 years
  • 65% or more after 5 years

If you end up making a claim, you’ll lose your NCB and your premiums will usually go up. Now, some insurers will give you the option to protect your NCB. For an extra fee, you’ll be able to make claims without affecting your NCB—though, you’ll be restricted on how many claims you can make in a year. The number of claims you’re allowed to make will vary depending on the insurer, so if this is something you’re interested in, make sure you look at what the rules are.


④ How will your personal information affect your premiums?

In case you weren’t aware, insurers calculate your insurance premiums by looking at your personal information. As we’ve discussed before in young driver insurance, many factors are carefully considered by insurers:

  • Age: typically speaking, young drivers pay higher insurance premiums. This is because younger drivers tend to be more likely to make a claim.
  • Location: if you live in an area with frequent theft and burglaries, your insurer will drive up your premiums because your car could be a potential target.
  • Occupation: if you’re on the road more due to your job—driving on motorways daily—you may have to pay more. If you don’t have to travel far for your job, premiums are likely to be lower.
  • Driving record: if you have points on your licence, have attended a speed awareness course (which may only affect premiums with certain insurers), offences for drink driving/dangerous driving, your premiums will be higher. If you attempt to hide such offences from your insurer, your insurance could be invalidated.
  • Your car: cars are grouped into numbered categories starting at 1 and ending with 50. The higher the number, the more you’ll have to pay. If your car has been modified—for performance or otherwise—you’ll also generally end up having to fork out more.

Whilst you can’t change your age, location or driving record, you can do something about factors like occupation and your car. For starters, try this tool to see how tweaking your job title can lower your premiums. Also, if you’re looking at purchasing a car, try to get one in a lower insurance category. If you’ve already got a car, avoid making any modifications—or, check to see how your premiums might be affected if you go through with it.


⑤ What are the payment options?

When it comes to car insurance, drivers can typically pay either on a monthly or annual basis. Obviously, at first glance, it seems much cheaper to settle for a monthly plan. When you add it all up, however, it’s often a lot cheaper to opt for an annual payment plan instead. Whilst monthly payments are more manageable for drivers, insurers make you pay for the privilege and charge interest.

In fact, according to MoneySuperMarket’s research on insurance payment terms, “some insurers add up to 10.75% onto the quoted premium for the privilege of paying monthly”. One of the ways to make the cost more manageable would be to “put the upfront annual cost on a purchase credit card which offers a generous initial interest-free period”. By doing so, you’ll be able to pay off the premium in your 12 monthly instalments, but you won’t have to pay interest.

Your choice, of course, will depend on your budget. If you can make an annual payment work, it’s definitely worth looking into. Alternatively, check to see how much various insurers charge for interest and look into your cheapest options.


⑥ Are there any discounts available?

pound notes and a calculator

Whilst car insurance is certainly expensive, there are ways you can drive down the price, depending on the insurer. Obviously, if you’ve built up a NCB, you’ll be able to enjoy a discounted premium. Beyond that, you might want to look into…

Telematics insurance

Black box (telematics) insurance is one of the ways drivers can get a cheaper car insurance deal. With this type of policy, your insurer will be able to monitor your driving habits via a telematics device. If you drive well, you could see your premiums go down dramatically. Bear in mind, however, that you won’t be able to plead your case if your insurer doesn’t like your driving—you’ll be lumped with high premiums if you don’t get your act together.

Whilst telematics insurance is typically aimed at younger drivers, there’s nothing stopping older or more experienced drivers from trying it out. As with any other policy type, the fine print will vary depending on the insurer, so make sure you check.

Multi car policies

If you live in a household with more than one vehicle, you might find it much cheaper to opt for a multi-car policy. By doing so, you’ll be able to insure them all under one policy. Admiral’s multi car insurance, for example, offers discounts for every car you add to your policy and allows you to build up a NCB for each car. And, when you have to renew your insurance, you’ll only have one date to remember!

Of course, you’ll have to compare the cost of insuring your cars individually with the cost of multi car cover. If it works out cheaper, then it’s definitely worth exploring.

Safety precautions

Insurers are more likely to offer you lower premiums if you’ve gone out of your way to limit the risks associated with owning a car. For example, if you install a Thatcham approved car alarm or immobiliser, you’re limiting the risk of theft or vandalism. As such, you’ll be less likely to make a claim—meaning your insurer will be more inclined to offer cheaper premiums.

Don’t auto-renew

When drivers get to the end of the year with their insurer, their first move is to just automatically renew their policy. Interestingly enough, you’re not always rewarded by your loyalty. In fact, it’s almost always cheaper to go elsewhere. According to MoneySuperMarket’s research on auto-renewals, “34.8% of motorists allow their policy to be renewed, and 66.9% saw their premiums rise as a result.”


⑦ Which insurer is best for you?

Once you’ve got your requirements in mind, it’s now time to consider which insurer is best for you. With the sheer volume of car insurers available nowadays, however, you might find it much easier and more efficient to use a comparison website. They’ll use your personal information to get quotes from various insurers that will include policy types, add-ons, payment terms and so on. If you use more than one site, you’ll be able to look at more potential insurers at a much faster rate. Top comparison sites include:

You might find it useful to write down your specific requirements, such as the type of policy you’re looking for and the add-ons you might need. After looking at your budget, you’ll also want to note down the payment option you’ll want to go with. Once you’ve got your list, you can cross-check with the quotes and see which insurer ends up ticking the most boxes.


⑧ What is customer support like?

scrabble letters spelling out support

It’s not as simple as just picking the first insurer that meets your requirements. You also need to make sure that your potential insurer is reliable. After all, car insurance is expensive—regardless of the ways you can lower the price—so you need to be sure you’re making the right choice. A great way to check a company’s reliability is to check customer reviews on their website or on services like TrustPilot.

You might also want to look into what the company’s claims procedure is like and whether or not they have a 24/7 claims helpline.


⑨ Are you sure everything is correct on your end?

When you’re applying for insurance quotes, you’ll have to provide an assortment of personal information to help insurers calculate premiums. The following is just a snippet of what you might have to provide:

  • Age
  • Location
  • Occupation
  • How you intend to use the car
  • Driving history (including points and driving offences)
  • No Claims Bonus
  • Additional drivers
  • Estimated annual mileage
  • Where you intend to park your car

All of the information you give to insurers is important—if even one detail is incorrect, you could end up having to pay higher premiums when your insurance is recalculated. To avoid this happening, you should make sure you get it right the first time around. If you try to intentionally avoid disclosing information to your insurer, such as not telling them your car has been modified, then you could end up having your insurance invalidated. Before you send anything off, give it another look over just to be sure.


⑩ Have you checked the fine print?

pair of reading glasses resting on book

You not only have to check things on your end, you also need to be sure you know exactly what you’re getting into with your insurance policy. As with anything else in life, you shouldn’t sign anything until you know exactly what’s on the table. There’s a good reason why people recommend you read the fine print with legal document—you never know if you’ve missed a sneaky clause or two on first glance.

So, make sure you read the guidelines and requirements for your insurance policy. If you’re not sure of something, ask your provider to clarify or get a second opinion from a family member or friend.


FAQs

1. Why do I need car insurance?

For starters, car insurance is a legal requirement. If you’re caught driving without insurance, you could get a fixed penalty of £300 and 6 penalty points. If you end up going to court over the matter, you could get an unlimited fine and end up being disqualified from driving. Additionally, insurance will cover you if you end up in a car accident.

2. What type of car insurance should I choose?

You need to carefully weigh up both the price and the type of policy on offer. Don’t just settle for something because it’s the cheapest option. Instead, look at what requirements you have, e.g., protected NCB, monthly payment instalments or named driver cover. Then, see which car insurance policy meets these requirements.

3. How much will car insurance cost?

It all depends on you, really—from your age to your location to your chosen car, everything is carefully considered by insurers. If we’re looking at average prices, however, Compare The Market found that premiums dropped slightly in early 2019, with an average of £736 (based on the Premium Drivers report in April 2019).

4. What do I need to provide for car insurance?

You’ll need to provide various details including personal information (age, location, occupation), how you intend to use your car, your driving history, your NCB (if you have one) and whether or not you intend to insure additional drivers.

5. Will it be cheaper to pay monthly or annually?

As we’ve said, whilst monthly payments are far more manageable, insurers will charge you interest for the privilege. Annual payments, by comparison, work out cheaper and mean that you don’t have to worry about paying for your car insurance until your year is up. Obviously, it’s all down to you and your budget.

6. Is it better to auto-renew my insurance policy or not?

If you’re almost at the end of the year with your insurance policy, you should start to look elsewhere. In almost all cases, you end up paying more for insurance when you auto-renew than you would had you gone to an entirely new insurance provider. Don’t just auto-renew because it’s the easiest thing to do.

7. What is fronting?

If you add someone as a named driver to your insurance policy and intend for them to drive your car more than you, then you’re lying to your insurer—as the main driver, you should be driving your car the most. This is otherwise known as “fronting”. If your insurer finds that you’re guilty of this, they will invalidate your insurance.

8. Can learner drivers buy car insurance?

Yep! In fact, we’ve discussed it in great detail in our handy guide on how to get a good insurance deal as a learner driver. From the policies on offer to top tips on how to get a cheaper deal, we’ve got it all!

By Bethany Hall

Whether you’re a learner or a pro driver, Bethany is here to help. From defensive driving to the Highway Code, she’ll tell you everything you need know about driving. If she’s not on the road, you’ll probably find Bethany with her head in a book or binge-watching the latest TV show.

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