Put Your Documents In Order
Before applying for a car insurance policy, it’s important to have the right documents to hand – and in order. This usually includes a valid driving licence, the registration document, proof of any no-claims discount accrued to date and a complete history of prior claims. Before starting the process, make sure the registered driver of the car is the same person applying for the policy and who drives the vehicle regularly. Confused? “The registered keeper should be the person who drives the car most of the time so the registration document should be in their name. Contact the DVLA to change it, if it isn’t. The owner is the person who paid for the car,” advises Les Roberts from MoneySupermarket.com.
Find The Right Cover
There are usually three standard choices when it comes to car insurance cover: third party; third party, fire and theft; or fully comprehensive. Third party insurance is the minimum level required by law, and covers damage to someone else’s car or property, injury you may cause to others or injury to your passengers during an accident. Crucially, it doesn’t cover you or the vehicle. Third party fire and theft insurance covers everything a third-party car insurance policy does, but with added protection against fire and theft. However, this policy still doesn’t cover you or accidental damage to your car. Finally, fully comprehensive policies cover damage to someone else’s car or property, injury you may cause to others, injury to your passengers during an accident, fire damage, theft, chipping and/or scratching, vandalism and accidental damage. That said, comprehensive doesn’t necessarily mean everything. “Extras such as a courtesy car, windscreen cover and personal belongings (like a sat nav) might not be covered by your policy,” warns Daniel Hutson from CompareTheMarket.com. “Furthermore, it may not always cover personal injury you cause to yourself, so remember to check all these details with each insurance provider when you get a quote.”
Know Your ‘Non-Negotiables’
When it comes to policy ‘extras’ it can be difficult to know what’s considered essential, and what to be more flexible about. According to the Money Advice Service (MAS), drivers should try to find a policy which includes windscreen cover, reimbursement of personal belongings of at least £200, loss or theft of keys, car rescue cover, a courtesy car and a repairs guarantee. Some policies even offer protection of your no claims discount following a claim. Other items, which MAS considers less important, include breakdown cover, legal expenses, cover for driving abroad and cover for stereos and sat navs. It’s possible to take out separate policies on all these items – possibly at more attractive rates. However, be sure to check individual excess provisions on windscreen cover and accidental damage – insurers often let you choose how much to pay towards claims, in return for a lower premium.
Calculate Your Mileage
Mileage is an important question you need to answer as part of the application process, while recent statistics suggest one in four UK drivers make an incorrect guess when applying for or renewing a policy. “Car insurance premiums are based on risk. The further and more often you drive, the more likely you are to be involved in an accident and need to make a claim. So, the higher your annual mileage, the higher your premium is likely to cost,” explains Daniel. “You must get your usage right otherwise your insurer may not pay out if you’re involved in an accident,” adds Les. “If you drive to and from work, that’s commuting but if you also use your car to get to meetings or for other purposes relating to your job, you’ll need to insure it for business use too.”
Factor In Modifications
It’s not unusual for drivers to make changes to their cars to improve their performance and appearance. But it could affect your insurance premium, so think carefully before moving ahead with modifications. “On average, having a complete body kit modification on your car will increase your premiums by 5%,” says Peter Carr from MoneySupermarket.com. “The main reason your insurance premiums could go up is risk. Insurance companies calculate their prices using statistics, and if motorists using high-performance vehicles are more likely to be involved in a crash, then insurers believe their premiums should be higher. Modified vehicles are often more attractive to thieves, and are therefore at greater risk of being stolen, which also increases your premium.”
Protect Your No Claims Bonus – Or Not
A way to safeguard your no claims bonus is to pay an additional amount on top of your car insurance to protect it. This means even if you were to make a claim, your no claims discount (NCD) would stay intact. According to research by MoneySupermarket.com, failing to protect your no claims bonus could push your premium up by 30%, if you make a claim. However, protecting you no claims bonus also adds to annual premiums – on average by around £23. So, if you stay claim free, you could still end up out of pocket. “Drivers often wrongly assume that if they’ve protected their NCD and make a claim their insurance won’t go up the following year,” adds Les. “The cost will probably rise because you’ve made a claim but you’ll still get the same discount. If your NCD isn’t protected, the premium would go up even more.”
Declare Claims or Convictions
It’s inevitable that prior claims will eradicate your no claims bonus, and you might find your premium is higher than you’re used to paying. Having a criminal record will also increase the cost of your car insurance, whether your conviction is motoring-related or not, because insurers see you as a greater risk. When applying for a policy, it’s necessary to disclose to the insurer any ‘unspent’ convictions – which means convictions that have yet to expire from the official record (even if you’ve completed the sentence or punishment). You do not need to disclose any spent convictions to your provider, even if asked, as per the Rehabilitation of Offenders Act 1974. However, failure to disclose any unspent convictions could invalidate your policy. Finally, if you’re convicted during your policy term, there’s no reason to inform your provider until the time of renewal, unless the policy states otherwise.
Assess The Excess
Similar to other types of insurance, car insurance policies come with an excess, which dictates how much you are willing to pay upfront and how much your provider will cover thereafter. “The total excess is likely to be made up of a compulsory and voluntary excess,” explains Daniel. Compulsory excess is set by your insurance provider and can’t be changed. Voluntary excess is how much you choose to pay on top of the compulsory excess. “For example, if you have a compulsory excess of £250 and a voluntary excess of £150, you’ll have to pay £400 towards the cost of any claim you make,” adds Daniel. Additional compulsory excess might apply to drivers under the age of 25 (who are considered a higher risk) but agreeing to pay more on your voluntary excess could lower your overall premium.
Pay Annually Where Possible
Paying for insurance annually is a simple trick to keep the cost down. “If you can afford to pay for your car insurance in one go do it,” says Les. “Paying monthly will work out more expensive because you’ll be charged interest, too. If you need to spread the cost, compare the monthly premiums, as the amount of interest you’ll be charged does vary.”
Take Time To Cool Off
By law, all car insurance policies have a minimum 14-day cooling-off period. During this time, you can cancel the policy for any reason and be entitled to a refund of any premiums you've already paid. However, it’s important to note cancellation fees might apply. For instance, the insurer can charge you to cover days when the policy was in force, plus a small admin fee to cover the paperwork. If you’re happy with the policy, it’s also worth bearing in mind your provider is entitled to charge a small fee for any updates, such as change of address, changing your employment status, changing your legal name or altering your mileage.
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