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05 September 2014

An easy guide to car insurance – what policy is best for you?

Car insurance is a complex and costly matter. 

Price comparison sites provide an interesting way of analysing car insurance, but also throw up its oddities. It seems strange, for example, that if one has suffered an accident in the past three years, the value often means little – a driver responsible for an accident which caused £200 of damage might still pay the same premium when it comes to renewal as an accident which caused £20,000. Meanwhile, the age of the car, or a slight location difference, might make a massive difference.

Despite this, drivers know that there are certain ways they can almost certainly cut costs; driving a cheaper car safely, paying in full rather than monthly, keeping the car in a safe location at night, and buying a car with good security measures from somewhere such as Kia Washington in Sunderland. They also know that some things will push up the price, such as driving an expensive or unusual car or amassing convictions. Until 2012 females paid less than males, but the European Court of Justice banned ‘gender pricing’ in 2012.

It is certainly worth looking to see which factors in your driving lifestyle affect you the most – here’s a quick guide to how insurance is calculated at 

The first, and most basic choice all drivers make, is between fully comprehensive, third party fire and theft, and third party only. The latter two are usually cheaper but will only cover damage to other vehicles, persons, or property in the event of an accident, so any motorist would have to pay for damage to their own vehicle – or themselves. Any driver taking fully comprehensive insurance, which might cost several hundred pounds more, is worth it. Their car might be inexpensive and it might be cheaper, if disaster strikes, to just pay for a new one instead of the pricier premium.

Younger people might also prefer the cheaper option, as they face the steepest fees in general – the average price for a 17-22 year old is now £1,096 a year, as they are more likely to suffer accidents. There are ways of slicing the cost though; many insurers offer multi-car policies, so multiple cars in a household are assimilated into one schedule, spreading the costs – usually in parents’ direction. 

Cars that are not ‘pimped up’ will be cheaper to insure, as will those with telematics: a black box is fitted to the car which monitors how it is driven, transmitting information back to the insurers. Safer drivers will be rewarded with lower premiums later. The number of insurers offering the option is growing – here is a guide to telematics courtesy of Ingenie.

Business insurance is typically more expensive than standard cover, but necessary for those to whom driving is an integral part of their working life – don’t be tempted to skimp on this to bring down costs, as in the event of an accident in business time your insurance company may pose some serious questions.

As with all premiums, an efficient car with good security measures will be a less expensive insurance bet. Also consider protecting your no claims bonus, which will incur an extra cost each year but could save you cash for your future renewals, should an accident occur. 

Agreeing to pay a high voluntary excess in the event of an claim will also drive down your insurance, but of course an accident would cost more should it occur. There are many other additional insurance options that exist, and many options to consider: do you take windscreen cover? Legal cover or hire car rent in the event of a claim? 

It’s fairly safe to say that the more options you take up, the higher the premium. However it is definitely safe to say that for every insurer this rule is constant: the higher the risk you present, the more you will pay.

How do you feel about the prices of car insurance?
Is there a particular insurer you would recommend?

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