Finding cheaper car insurance

Finding the right car insurance at the right price can always be a bit of a trial, but help is at hand!
 
Pennysitter welcomes its first contributor, Agent Orange. He is an insurance representative by trade, and we're sure that his tips and insider knowledge will go a long way in helping you to find the right insurance for your vehicle.

Why do I need to insure my vehicle?

Since 1930 it has been a legal requirement that all road users carry insurance on any vehicle that is used on a public highway, which includes the driveway outside your house. Unless your vehicle has been declared SORN (Statutory Off Road Notification) then it must have a valid insurance policy.

The problem is that in today’s saturated market it can often be both difficult and confusing to select the right insurance product. In this article you'll find some considerations to bear in mind when you’re doing the annual trawl through the many insurance providers out there.

Is price the only consideration? 

No doubt we’ve all seen the advertisements for the many comparison websites offering us everything from nectar points to meerkats; these are simply gimmicks to try to get you to use that particular service. It is also important to note that not all insurance companies are actually linked to these comparison sites, so don’t get sucked in by the promise of a stuffed toy straight away - do your own research too!

The comparison websites are a useful point of reference and the first port of call for anyone looking for a bargain; however, some of the 'cheaper' options may not be giving you the cover that you might expect or presume. For example, it is important to note that 'comprehensive cover' is a generic term, and one company's 'comprehensive' cover will often differ considerably from that of another.

Buyer beware, some companies will not necessarily cover you for every eventuality - i.e. vandalism, using your vehicle abroad or for driving other vehicles, etc. Be thorough in your research! 

Essentially, car insurance is a product – and like any other product, you will usually get what you pay for: the cheapest cover may not necessarily be the best cover. You will only ever know how good your insurer is when you have to make a claim, so it is important to consider the following:

• is the company based in the UK?
• does it have UK call centres?
• does it actually have a customer helpline, or is it all web-based?

What are the options?

The following explanations are intended to give you a basic overview only,

Third Party Only (TPO) – this is the minimum level of cover you can expect to be offered by most insurance companies, and also the minimum level of cover that is presently required by law. It essentially means that in the event of an accident, your provider will indemnify any third parties (people or entities other than yourself) who sustain damage or injury as the result of an accident you have caused.

Third Party Fire and Theft (TPFT) – this offers you the same cover as TPO, but in addition you will be indemnified for any damage caused as the result of a fire or theft of your vehicle.

Comprehensive – often referred to as ‘fully-comp’. This is the highest level of cover that you would expect to be offered by the majority of insurers in the UK. It provides the same cover as TPFT, but often fully indemnifies you for any damage sustained to your own vehicle after an accident for which you are either fully or partially at fault.

What if I’m not happy with my renewal quote?

If you are keen to stay with your current insurer, but are not happy with your renewal quote, don't panic. You can always go to their website (or use a comparison website - if they feature on one - note that Direct Line do not) and enter your details as a new customer.

Why do this? One of the main marketing tools used by insurance providers is to offer new customers a discounted rate or certain ancillary products free for the first year. 9 times out of 10 you will find that if you approach your existing insurer as a new customer you often get a cheaper quote than you were offered as an existing customer. As Penny always says: you don't get anything unless you ask for it.

But I’ve been a loyal customer in the past!

Sadly the concept of ‘loyalty’ is not always given as much weight as it may have had in the past, and this is mainly due to prevailing market conditions. This may leave a bitter taste in your mouth, but don’t take it personally – insurance companies (like most other businesses) change not only their ratings, but also their customer target groups on a regular basis. This, coupled with the fact that the insurance premiums of any given provider will also be dictated by how much they’ve had to shell out on claims in the last twelve months means that prices are never guaranteed to actually go down year on year, irrespective of whether you’ve made a claim or not!

How else can I reduce my premium?
Are you living with a spouse or partner? If so, are they named on your policy as an additional driver? If not, why not? Many companies will give you a discounted premium if you add your other half to your policy as a second driver. Why? Because you are, in effect, sharing the risk and, therefore, you'll often get a discounted rate. This can, however, backfire in the event of a separation.

Check your mileage! Many people don't provide accurate estimated annual mileage information to their insurers. Mileage is considered when calculating insurance premiums: if, for example, you travel 20k miles per year, your risk factor is higher than someone travelling 5k per year and your premium will reflect this. Rather than guesstimate, always check your service booklet annually.

 

Remember your duty of disclosure: it is important that information is both accurate AND kept up to date. Though it may hurt you financially in the short term, failing to declare things like endorsements on your license or past claims can invalidate your insurance policy entirely!

Further tips...

Always keep a record of your No Claims Discount (NCD). This is important for two reasons:

1. It is perhaps the most significant piece of information you can provide an insurer when obtaining a quote. A good no claims history tells the insurer that you’re (potentially) low risk, and this will likely be reflected in their quotes. It goes without saying that the higher your NCD is (in years), the lower the quote should be.
2. Insurance companies are not consistent in the way they record NCD. Some may limit the amount of years you can have (i.e. to 5 years or 9 years); others may show it as a percentage. Always ask for your proof of NCD from every insurer you use at the end of a policy so you have definitive proof, (as whenever you join a new insurance company you will have to provide proof of NCD to them).

Finally, don’t forget that car insurance is subjective (i.e. the details you provide an insurance provider will dictate the price of your premium), so it goes without saying that it’s important that you get a policy which provides the cover that suits YOU and meets your particular needs: if your premium differs from that of another person, despite being similar on face value, there may be slight differences in their respective details to those of your own which may have had an effect on their premium or vice-versa. For this reason, it can often be misleading to compare your policy (or the price of your policy) with other people.

Conclusion
There you have it. When it comes time to renew your car insurance, use these tips and you could save a bundle! Thank you Agent Orange, your identity is safe with us.