Informed Car Insurance
 

Having worked hard to secure the best deal on your new car, it’s important to keep the momentum for finding your insurance. Before you ‘compare the market’ or head to ‘money supermarket’, check out our top tips for motor insurance.

Policy Considerations – How Your Premium is Calculated.

Insurance companies will bombard you with options for your policy, and all will have an effect on the final price you are quoted. Many could be well worth the extra charge, so think carefully when the offer is made.

1. Car Insurance Group

Determined by the insurance companies, factors that affect the insurance grouping of all vehicles are price, engine size, the specification – i.e. is it top, middle or bottom of the range, and the cost of repairs.

Dealers should be able to tell the insurance group of cars on sale, allowing to you to get pre-purchase quotes. If you need to find out an insurance group yourself, Informed Women recommend looking at the Parkers Website.

2. Your Age

Age plays a huge part in the price of your insurance premium. Insurers believe that inexperience combined with an attitude of invincibility make younger drivers the highest insurance risk. This is particularly the view they take towards young male drivers. Including cover for drivers under the age of 25 affect the premium – costs can be kept lower by restricting the drivers to you, or you and your legal partner only.

Conversely, insurers can also penalise older drivers, over the age of 80, who they also regard as high risk. Saga.com is a good place to get a quote if you’re over 50.

Top Tip: If you’re a young driver looking for insurance, it is good to contact an insurance broker. They have access to a wide range of insurers, and should have greater negotiation powers to secure a competitively priced policy.

3. Your No Claims Discount (NCD)

The good news is, the longer you drive without an accident, the larger your No Claims Discount becomes. For every claim free year, you’ll get a certain % off your insurance cost, up to a maximum of 70%.  This means you get considerable savings once you are up to full no claims bonus. 

If you make a claim, your no claim bonus will be reduced or lost completely. If you’ve reached the maximum No Claims, most insurers will usually reduce it by two years rather than disallowing it altogether. 

You might want to consider NCD protection once you’ve reached the insurers upper limit. You will be charged a premium for this option, however if you do need to claim, the overall cost may be much greater in the long term if you drop the discount.

But what if the accident was not your fault? Depending on your insurers terms, if you have protected the NCD, then it should be preserved. However, if it is not protected, usual practice if for the insurer to step it back until the claim is resolved and a full recovery has been made from the guilty third party.

Top Tip: It's important that you inform your broker or insurer of all incidents of damage or loss, however small, and even if you do not make a claim for them. There have been cases where insurance companies have refused to meet claims because the driver failed to disclose previous incidents.

4. Type of Insurance

Third Party, Fire and Theft
This is the minimum and cheapest insurance cover you can buy. It protects a driver against injury to a third party and damage to their property. It also protects against loss and damage if your vehicle is burnt or stolen. Most importantly, it does not protect you against damage to your own vehicle if it is involved in an accident or vandalised.

Comprehensive Insurance
Comprehensive insurance covers damage to your vehicle from a wide range of causes, including accidents and fire and theft. Other benefits sometimes include limited cover for items stolen from your vehicle, medical expenses and personal accident protection.

The word 'comprehensive' can be misleading as these policies always include limitations and exclusions. On very old, cheap cars, annual comprehensive premiums can cost more than the car is worth. But it's a must if you are buying a car using a credit agreement or a loan – if the car is a written-off or stolen, you still have to continue paying the finance.

Top Tip: If your car is worth less than £1000, if you live in a high risk area, or if the driver is under 25, opting for Third Party, Fire and Theft cover will definitely result in savings in car insurance.

5. Motoring Convictions

If you've been convicted of motoring offences in the past, or have a bad accident record, you will probably have to pay a higher premium.

6. Occupation and Location

Where you live, your occupation and where your car is parked overnight all impact the final premium cost. If you use your own car for work, insurers will increase the premium. The more miles you drive, the greater the possibility you’ll be involved in an accident. Inner city dwellers usually pay more insurance as the car is open to a greater risk of vandalism or theft than in a quiet country village. Lastly, if you keep your car in a secure location, it is a lesser risk than one left parked on a public street.

7. Voluntary Excess

This is known as an 'excess', it means you agree to pay the first part of any claim. Discounts are available for increasing the voluntary excess (e.g. £100) but beware, compulsory excesses may already apply. 

Top Tip: You can save money on your insurance premium by increasing the amount of voluntary excess you're prepared to pay. Be careful though; if you are involved in an accident, this measure could end up more expensive in the long run.

8. Guaranteed Courtesy Cars.

If having access to another vehicle whilst yours is off the road being repaired is essential, then you want a policy with guaranteed courtesy car.

9. Discounts for Pass Plus and Advanced Drivers.

If you have qualified for these recognised awards, then you can save money on your car insurance.

10. Flexible payment methods.

You will be offered the opportunity to pay your premiums monthly or annually, with monthly option normally incurring an additional administration fee.

Top Tip: If you can afford it, try and pay the insurance premium is one single instalment. Insurers often charge a fee for monthly payments, up to 30% APR, which substantially increases the insurance cost.

11. Legal motor protection

This will cover costs if you need to take legal action in the case of an accident, or if you have a legal action taken against you.

12. Windscreen Protection

Offered on most policies, covers the cost of repair.

Top Tip: Autoglass will fix a chip on a windscreen free of charge, which could save you substantial costs should the chip turn into a full blown crack.

How To Get The Best Insurance Price

Online Comparison Websites: Now hugely popular, there are numerous comparison websites that will give you instant quotes to compare from range of insurance companies. The largest include Confused.com, Moneysupermarket.com, Gocompare.com, Tescocompare.com, Easycover.com, and Chooseinsurance.co.uk

Using an insurance broker is an effective way to find the best car insurance particularly if you have a specialist or unusual car, or are a younger driver. They are knowledgeable about the market and can negotiate competitive deals.   You can find a local insurance broker on UKinsurancebrokerfinder.co.uk.

Apply as a New Driver: Insurance companies are all targeted on new business, so it is definietly worthwhile calling up for a quote as a 'New Customer' and comparing the price with your renewal quote. You could be pleasantly surprised! 

As with everything, trust your instincts. If you don’t feel your broker is working in your best interests step away. You can always check the deal they find against what you can get from an online comparison site.

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