10 car insurance myths

Our guide reveals the facts behind 10 common misconceptions about car insurance

Car insurance can be confusing, and it’s made even more so by the myths circulating. You need to know the facts from the fiction or you could find yourself overpaying, or worse — without the cover you need to drive legally. Read on to find out the truth behind 10 common car insurance myths.

Myth 1: Third party cover is always cheaper than comprehensive

The truth: While it might seem logical that a lower level of cover would cost less, this is often not the case. Drivers who opt for a lower level of cover typically have a history of making more claims, which has driven up the cost of these policies.

For many drivers, comprehensive cover can cost the same or even less than third party only or third party, fire and theft cover — with the added bonus that your own vehicle will be covered for damage. You can read more about this in our guide.

Myth 2: My premium should go down or stay the same each year if I don’t claim

The truth: In an ideal world this would be the case — after all, you’re building up a no claims bonus every year you don’t claim. However, there are many external factors at play that affect the cost of insurance across the board. 2017 in particular has seen many changes that have driven up prices for most motorists.

It’s also worth bearing in mind that most insurers have a maximum no claims bonus, so you’ll stop building a discount after a set amount of years. Insurers will also take your age into account, so once you reach a certain age you will be considered a higher risk and might see your premiums rise. You might also notice your premium changes if you make any adjustments to your policy, such as changing your job or address.

Myth 3: No claims bonus protection will stop my premium increasing

The truth: Many people think paying extra to protect their no claims bonus will prevent their premium from increasing if they make a claim. But like many things relating to insurance, it’s not that simple.

While you won’t lose your no claims bonus if you make a claim and you’ve paid to protect it, your premium itself could still go up as your insurer might perceive you as a higher risk. As your no claims bonus is a discount applied to your premium, the amount you pay at renewal might still increase. And there’s a limit to the protection offered – if you make more than one claim in a year, you might find that your insurer removes a year or two’s bonus (but you’ll likely still be better off than if you had no protection and lost your whole discount). You can find out more in our no claims bonus guide.

Myth 4: I won’t have to pay excess if a claim wasn’t my fault

The truth: If you make a claim that wasn’t your fault (e.g. if a third party crashed into you at traffic lights), your insurer will usually waive your excess if it can prove you weren’t at fault and it’s able to claim its costs back from the third party. However, you’ll be responsible for paying your excess upfront even if you’re later entitled to a refund, so make sure you select a policy with an excess you can afford. You can read more about car insurance policy excesses and how they work here.

Myth 5: Comprehensive cover allows me to drive any car

The truth: It’s a common misconception that having comprehensive cover on your own vehicle automatically covers you for third party liability when driving someone else’s car. In fact, this used to be a standard feature of comprehensive policies, but it’s now offered by fewer insurers.

Some comprehensive policies do include this, but it’s important to check your documents rather than assuming you can drive another car. Look out for ‘driving other cars’ (DOC) cover in your policy — and bear in mind that even if you have this included you will only be covered for third party liability so won’t be covered for any damage to the car you’re borrowing. Read our guide to find out more.

Myth 6: Young drivers should get insurance in a parent’s name

The truth: Many parents want to help their children out financially, and might consider taking out insurance in their name or putting themselves as the main driver to cut the cost of their child’s insurance policy.

But while it might seem like a legitimate loophole, putting insurance in someone else’s name to get cheaper cover is known as fronting and is a form of insurance fraud. Fronting is illegal and has serious consequences, including penalty points, disqualification, and fines of up to £5,000 if the case is taken to court. You can find out more in our guide to fronting.

Myth 7: Black box policies have a curfew

The truth: Most black box or telematics policies no longer have set curfews. While this was a feature in most early black box policies, insurers have moved on and most now base premiums on driving behaviour such as mileage, speed, braking and accelerating.

While driving at night may affect your driving score on some policies, there are now very few black box policies that restrict the times of day you can drive. This is far from the only misconception about black box policies — in fact, we’ve rounded up some myths specifically about the technology here.

Myth 8: I don’t need to insure my car if I don’t drive it

The truth: Since Continuous Insurance Enforcement (CIE) came into effect in the UK in 2011, all cars must be insured unless they have been declared off-road with a Statutory Off-Road Notice, known as a SORN. You can only SORN a car if it’s kept off the road on private property — for example on a drive or in a garage. If it’s kept on a road but never used, you still have to make sure it’s covered for at least third party liability. You can read more about SORN requirements in this guide.

Myth 9: Paying monthly is a cheap way spread the cost of cover

The truth: While it might seem sensible to spread the cost of insurance with monthly payments, it almost always costs more in the long-run.

Most insurers will charge an upfront deposit as well as interest, making your premium cost much more over the year. While it can be difficult to find money for a year’s cover upfront, paying in one go usually works out much cheaper. Our guide to annual and monthly payments explains more.

Myth 10: It’s best to let my policy automatically renew each year

The truth: There are no prizes for staying loyal when it comes to car insurance, as you can often find a cheaper deal by shopping around. While you might be tempted by the convenience of letting your insurance policy renew, it could be costing you dearly.

Read More

Insurance premium tax

The 2016 Autumn Statement announced a further rise in insurance premium tax (IPT), but what is it and how does it affect insurance costs?

In the latest Autumn Statement on 23 November 2016, Chancellor Philip Hammond announced insurance premium tax (IPT) will increase from the current rate of 10% to 12% in June 2017.

What is insurance premium tax?

Insurance premium tax is charged as a percentage of insurance premiums across most general insurance products, including car, home, travel, pet and private medical insurance. Other types of insurance, including life insurance, are exempt from the charge.

IPT was introduced in 1994 to raise revenue from the insurance sector, which was then viewed as being under-taxed. The rate of IPT stood at just 2.5% when it was first introduced.

While IPT charges remained stable until 1997, the rate has increased nearly fivefold since it was introduced, with more dramatic increases being introduced in the last few years.

The treasury has described IPT as a tax on insurers, and pointed out that it is up to insurers whether to pass the costs on to customers. However, in most cases, IPT is added to customers’ premiums and any increases will directly affect the price they pay.

Because insurance premium tax is a flat rate across all policies, people with the highest premiums are most affected by IPT. For car insurance policies this impacts inexperienced drivers, and for home insurance people who live in high-risk areas are likely to pay the most IPT.

Latest rise in IPT

Chancellor of the Exchequer, Philip Hammond, announced a further increase to insurance premium tax in his first (and last) Autumn Statement on 23 November 2016.

The rate will rise to 12% from June 2017, from its current level of 10%.

The current rate was brought into effect in October 2016, after rising from 9.5%. The tax rate previously jumped from 6% to 9.5% in 2015.

The new rate in June will mark the third increase in 18 months, with the rate of IPT doubling in that time period.

Despite the sharp increases in recent years, the rate of IPT in the UK remains lower than in many other European countries. The current 10% rate is the eighth highest in the EU, and June’s increase will take the UK to sixth position.

What does it mean for insurance costs?

Insurance premium tax affects an estimated 25 million car insurance policies and 25 million home insurance policies throughout the UK.

According to the Association of British Insurers (ABI), the tax increases introduced between 2015 and 2017 will add more than £25 a year to the average comprehensive car policy and £19 to combined building and contents cover.

The best way to save on your insurance costs and beat any price rises is to shop around for a better deal. With uSwitch you can compare quotes from different providers in just a few minutes.

Read More

How do I cancel my car insurance policy?

Buying car insurance is not just a huge expense, but a big commitment, lasting 12 months (or longer if you auto renew). But things can change: maybe you found a cheaper deal elsewhere, want to sell your car, or simply don’t want to be tied down to your car insurance policy any longer. In this guide we explain everything you need to know, from how to cancel car insurance, car insurance cancellation charges, and the all-important 14-day cooling off period.

The first thing you need to know about cancelling car insurance is that it is possible – you are allowed to do it (but remember your car must be insured at all times, so make sure you don’t leave any gaps between cover). Unfortunately, the second thing you need to know is that there is almost always a catch, which involves having to pay a car insurance cancellation fee and possibly some other admin charges. In this guide we explain all the situations where you might be required to pay a car insurance cancellation fee, and how to cancel car insurance without paying a penalty or at least doing so in the cheapest possible way.

Having a one-year commitment to your car insurance policy can feel like a burden, but the truth is you can cancel at any time. And if you know what the rules are relating to your car insurance cancellation policy, then you can avoid paying a hefty fee when you do eventually need to cancel.

You might be only a few months into your car insurance policy, but need to raise some money by selling your car, or maybe you’ve shopped around and realised another insurer can give you a better deal. Perhaps, you’ve made a claim on your insurance, and you are now worried that the insurer won’t let you cancel the policy. Or perhaps you pay for your car insurance in monthly instalments and want to know if will still be able to cancel your car insurance. The answer is yes to all of the above, but there is still a lot to know before you pick up the phone to cancel your car insurance policy.

Cancelling your car insurance early

You can definitely cancel your car insurance early regardless of your reasons for doing so. However, the type of charges and how much you will have to pay for cancelling early will depend on your insurer’s policy, how much you have already paid for your cover, and how long you have left on the insurance term.

If you pay for your car insurance on a monthly basis, the longer you have left on your insurance policy term, the more you will likely have to pay to cancel your car insurance. Similarly, the less you have paid already, the more you will have to pay in order to cancel your car insurance policy early. Each car insurance provider has a different policy when it comes to cancelling so check your insurance documents first.

In most cases you should still be able to get a refund on some of the months remaining on your insurance term. Nonetheless, all of the extra features you are paying for on your car insurance policy, such as breakdown cover and legal expenses cover, are likely to be non-refundable. So if you cancel your car your insurance, you probably won’t get the money back on those features. You will also lose your no claims discount for cancelling your car insurance policy early.

However, there is one way to cancel your car insurance early without paying anything (well, almost). But you have to do it during the cooling off period.

What is the car insurance cooling off period?

You may have heard of the 14-day cooling off period when researching how to cancel your car insurance policy. Luckily, it can help you cancel your car insurance without having to pay anything (although there might be a catch depending on your insurer).

The cooling off period is a legal requirement for all car insurance policies. It is usually applicable for the first 14 days of when the cover starts or when your policy documents are sent to you, whichever is later. Some car insurance companies will have a longer cooling off period, but as a minimum this period is 14 days and that is generally what most policies will have.

During this period you are free to change your mind and cancel your policy for any reason at all. Some insurers will charge an administration fee for cancellations during the cooling off period, but this will still be a lot cheaper than what you will pay if you cancel any time after. Before you buy any car insurance policy read the cancellation terms and definitely check the details surrounding the cooling off period.

Getting a refund after cancelling car insurance

If you pay for your car insurance monthly, you are not necessarily paying for the cover month to month. This is technically a credit agreement allowing you to spread the cost of your 12-month insurance policy over a monthly basis. With this in mind, cancelling your car insurance even if you pay monthly does not mean that you aren’t going to be subjected to the same cancellation charges as someone who paid for the policy upfront.

The cancellation charges will vary depending on your policy and how long you have left on your policy, but if you pay monthly, you will probably have to pay an extra penalty, which is calculated as a percentage of the total policy price.

You are, however, most likely entitled to a refund when you cancel your car insurance regardless of whether you pay monthly or upfront (unless you have made a claim that year – more on this below). Most insurers will not offer a refund if you are cancelling with only two months to go, so if you are that far into your policy, it will usually be cheaper to just see it through to the end. You will usually be refunded on a pro rata basis for the months you will not be receiving car insurance cover for, minus the last two months and all the cancellation charges.

Before cancelling, especially if you are planning to switch to a cheaper deal, read the cancellation conditions and see if the savings of your new deal outweigh the costs of cancelling your current car insurance policy. Bear in mind that you will lose any no claims bonus too, so decide if it’s worth sticking around to claim that.

Can I cancel my insurance if I’m selling my car?

You can cancel your car insurance if you are selling your car, or for any reason. But if you are selling your car and not planning to get a new one, you absolutely should cancel your insurance. If you were planning to get a new car to replace the one you are selling, speak to your insurer and see if they will cover the new vehicle to avoid you paying a cancellation fee. If you’re not happy with their quote, you can shop around and cancel your current policy if the savings on the new policy will outweigh the cancellation fees — just remember that you may lose any no claims bonus.

You will be charged for the administrative costs of updating the policy, but you could also find your premiums increasing if the insurer finds there is added risk with insuring your new car. On the other hand, your new car could be in better condition and in a lower insurance group, meaning you could get cheaper car insurance from the same policy.

However, if you decide your car insurance still isn’t going to work out for your new car then it could work out cheaper to move to another deal. Just bear in mind all of the costs that could come up when cancelling. It may end up being cheaper to stick with the same deal.

Cancelling car insurance after making a claim

You can still cancel your car insurance even after you have already made a claim. Unfortunately, you won’t be able to claim a refund on any months you have already paid for. Plus, if you pay monthly, you will have to pay off the remainder in a final lump sum. This is the area of cancellation you ought to be wary of. If you have made a claim and want to cancel, weigh up if it’s worth it, as it could be quite expensive.

Cancelling at the end of your car insurance policy

If you let your policy auto renew, his means that you will be pulled into another 12 month deal with your insurance provider. If your cover is coming to an end and due to renew, it’s a good idea to shop around on a price comparison website like uSwitch to see if you could get a better deal than the renewal price offered by your current insurer. If you find a better quote, simply call your insurer and ask them not to renew your cover. If you ask them to cancel the policy effective of the day it was due to come to an end, you will not be charged a cancellation fee.

Read More

How technology can cut the cost of car insurance

Car insurance premiums are based on several risk factors, but new technology can help to reduce the risk of a crash or claim. Our guide explores the gadgets that can help to cut the cost of your car insurance.

Driverless and autonomous features

Driverless cars, previously only seen in science fiction, are slowly becoming a reality as manufacturers explore the technology.

It’s not yet clear how driverless cars will affect insurance premiums, but with around 90% of car accidents caused by human error, the potential for crash reduction is significant.

It is hoped that this could lead to cheaper insurance premiums for both owners of driverless cars and other road users. However, it will take time for insurers, manufacturers and officials to determine who takes responsibility in the case of an accident before the technology becomes mainstream.

But you don’t have to wait for fully driverless cars to see the benefits of the technology. More than half of new cars are now sold with autonomous features such as parking assistance and automatic braking. Euro NCAP has found autonomous braking systems have been responsible for a 38% reduction in real-world rear-end crashes across Europe.

Insurers are now responding to this with cheaper premiums to reflect the cars’ reduced crash risk. Some new policies aim to cut prices based on the accident-reducing potential of driverless features such as parking assist and ABS. These new types of insurance policy also cover the driver in the case of software errors and hacking of the system.

Black box insurance

Black box technology (also known as telematics) can help insurers to offer tailored premiums based on actual driving behaviour. Black box insurance uses a small device or mobile phone app to monitor drivers’ usage of their cars.

As well as the usual risk measures such as age, car type and driving experience, black box insurers also take into account factors such as speed, braking and times of car use so they can get a better idea of the drivers’ risk.

Black box insurance offers an opportunity for drivers to prove to their insurer that they can drive safely – this means it can be particularly good value for those usually considered high-risk, such as young and inexperienced drivers.

In fact, drivers aged 17-21 with zero no claims could save an average of £1,282 by choosing black box insurance over a standard policy (based on quotes generated by uSwitch between November 2016 and January 2017).

Like all insurance policies, no one black box policy is the same and each one offers a different way to save. Some insurers will offer black box policies at a cheaper starting rate than their standard policy, while others will keep track of your driving behaviour and offer quarterly or monthly refunds or rewards for safe driving.

Dashboard cameras

Dashboard cameras, also known as dash cams, are growing in popularity as they become more widely available and affordable.

Dash cams are small cameras mounted on the car’s dashboard or windscreen that record each journey, making it easy to revisit the events and conditions leading up to an accident. They can help to determine the cause of an accident and speed up insurance claims by making it clear whether the driver was at fault.

Some insurers give an automatic discount if you have an approved dash cam. The camera could also save you money in the long run by making it easier to prove when an accident was not your fault.

According to uSwitch research, 27% of drivers have been unable to prove that they were not to blame for an accident. Unless you can prove you were not at fault you could lose your no claims discount and face a price hike at renewal time. Most insurers will now accept dash cam footage as part of a claim, helping to prove innocence in these cases.

Extra security

Adding high-tech security features to your car can also help to reduce your insurance premiums. As well as the risk of an accident, insurers base their premiums on the likelihood of your car being stolen, vandalised or broken into. By installing extra security features, insurers will consider you at a lower risk of claims of this type.

A professionally fitted alarm will help to deter thieves and vandals, while installing a tracker in your car can also act as a deterrent while making it easier to recover your car if it is stolen. These security measures should help to convince your insurer that your car is a low risk, and it’s likely you will be offered cheaper premiums to reflect this.

Read More

Car insurance excess explained

Find out why insurers charge an excess on policies and how choosing the right excess can cut the cost of your premium

When applying for car insurance or comparing quotes, you’ll notice an ‘excess’ cost alongside the premium price (the monthly or annual cost of your insurance). Read on to learn more about the different types of excess and how they can affect the overall cost of your cover.

What is car insurance excess?

A car insurance excess is the amount you are required to pay when making a claim on your insurance policy.

For example if you make a successful claim for £500 and your excess is £100, your insurer will pay you £400 to cover the cost of repair to your car — essentially you will pay for £100 of the claim (no matter how much the claim is for).

If you were involved in an accident and the insurer finds that it wasn’t your fault, you will usually be able to claim the excess back — although you will usually be expected to pay the excess while the accident is being investigated.

Your insurer will usually not pay out for a claim that costs less than your excess. They will usually recommend that you pay for repairs yourself as it wouldn’t be economical to pay for an excess charge in this case. Insurers use excess charges to prevent people making claims for lots of small issues, which would eventually drive up the cost of car insurance for everybody.

A good price comparison website will clearly show the total excess you will have to make in the event of a claim, broken down by the compulsory and voluntary amount. You should also be able to easily adjust your voluntary excess level to see how this affects the cost of your premium.

What is compulsory excess in car insurance?

The excess on a car insurance policy is usually split into two parts, known as compulsory and voluntary excess. As the names suggest, compulsory excess is a mandatory amount set by your insurer, and voluntary excess is an amount you can opt to pay.

What is car insurance voluntary excess?

So why would you choose to pay a voluntary excess? It could help you to save money as most insurers will offer you a cheaper premium if you opt to pay voluntary excess. Choosing to pay a higher voluntary excess can keep the costs of your premium down, but remember that you will have to pay this amount if you need to make a claim.

You should choose a realistic amount that you can afford to pay in the case of a claim, and bear in mind that most insurers will refuse to quote if you choose a voluntary excess that is close to the value of your car.

While voluntary excess is an amount you choose yourself, it’s no longer negotiable when you make a claim — you cannot choose to take out a voluntary excess when purchasing your insurance then opt not to pay it when the time comes to claim.

How much does car insurance excess cost?

The cost of car insurance excess varies with different policies and depending on whether you choose to have a voluntary excess as well as a compulsory one.

Most insurers will charge a higher compulsory excess for young and new drivers as they are seen to be more likely to claim than older, more experienced drivers.

Many policies have different levels of excess for different types of claim, so check your policy carefully. For example, windscreen claims are fairly common and low cost, so many insurers charge a lower excess for windscreen repairs.

Remember you won’t have to pay any excess at all if you don’t need to make a claim during the yearly term of your policy.

Read More

Low mileage car insurance

There are many reasons you might cover less mileage in your car than the average driver, whether your car is a second vehicle or if you’re retired and just use your car as a runaround. You might also search for a low mileage policy if you own a classic car that only comes out for shows or sunny weather, or if you’re a student who only drives during the holidays.

How to estimate your mileage

You may find it difficult to estimate how many miles you will do in a year, as you have to tell your insurer in advance before you take out the policy. But it’s important to be as accurate as possible so you can get the right price and make sure you’re covered.

The average driver covers around 8,000 miles per year, but don’t assume that’s the case for you too. Mileage can vary wildly depending on if you use your car to commute and do long trips, or if you only drive occasionally.

The most accurate way to tell how many miles you drive on average is to check your previous MOT or service certificates, as these list the mileage on your car each year. You can then use these figures to work out how many miles per year you do on average. If your circumstances have changed, for example you’re driving to a different place of work, you’ll need to take this into consideration.

Low mileage car insurance

Your insurance premium is determined by many factors, but insurers mostly base the price on what puts you at risk of making a claim — e.g. your driving experience, whether you’ve had any past accidents, and how many miles you drive. The logic goes that the more time you spend on the road, the more likely you are to have an accident, so you might think that if you drive fewer miles you will be charged less for your insurance.

However, based on past accident data some insurers may take it into consideration that drivers who cover very few miles are also less likely to know the road well, so may be more likely to be involved in an accident.

You might assume that by declaring a low annual mileage estimation to you insurer that you will be able to cut the cost of your premium — some dishonest drivers may even be tempted to declare lower mileage than they actually plan to cover. It’s important to note that making any dishonest declaration to your insurer is considered insurance fraud and will invalidate your cover. Due to this illegal practice, many insurers don’t actually take it into account if you enter a very low mileage when requesting a quote, and will just offer you a price based on a higher number of miles. Unfortunately this makes it harder to get cheap insurance if you are genuinely a low mileage driver.

But thankfully there are some insurers who offer specialist low mileage policies, while others will give a low mileage discount if you only cover a limited number of miles every year. Alternatively, you may want to consider ‘pay as you go’ insurance.

Pay as you go insurance

Some types of insurance policy, usually black-box based, put a particular focus on the number of miles you do when calculating the cost of your premium. These so-called pay as you go car insurance policies may be a good option if you don’t drive many miles per year. Some insurers will stipulate a limited mileage you will be covered for, and you can then ‘top up’ in blocks of 1,000 miles or so to ensure you’re covered if you go over your original expected mileage. You can learn more about pay as you go insurance in this guide.

Compare car insurance quotes

However many miles you drive per year, it’s important to consider all your options to ensure you get the right cover for your needs. Shopping around on a price comparison website like uSwitch can help you compare different cover side by side and could help you to find the cheapest deal.

Read More

No deposit car insurance: is there such a thing?

If you’re struggling to cover the cost of your car insurance, you might hope to find a ‘no deposit car insurance deal’ — but why are they so hard to come by?

Car insurance premiums can often be expensive, and if you’re expected to pay a large deposit up front, it can sometimes put a massive strain on your finances, limiting you from making other important purchases. But what if you could get car insurance with no deposit? Does no deposit car insurance even exist? We explain all and include some tips on how to save money on your car insurance in this guide.

There are many ways to save money on your car insurance policy. And why wouldn’t you? Car insurance premiums can be extremely expensive, especially if you are a new or young driver. Annual premiums can set you back a few hundred pounds at the lowest end of the scale, but can cost a few thousand pounds at the other end. The prices vary wildly depending on your age, driving experience, where you live and where you park your car, the type of car you drive, and a whole host of other factors – many of which you simply can’t control.

So if you are unfortunate enough to be required to pay a lot of money on your car insurance premiums, it would surely be easier if you could just spread the cost evenly instead of paying a lump sum upfront. This would be what is called ‘no deposit car insurance’, but does it even exist?

No deposit car insurance explained

No deposit car insurance is a term that might be used by some to advertise car insurance where you don’t need to pay upfront. However, strictly speaking, there is no such thing as no deposit car insurance.

Unfortunately, with all car insurance premiums you are expected to pay money upfront. The amount you pay upfront could vary depending on your circumstances and the car insurance provider you decide to sign up with, but essentially no deposit car insurance does not exist. All car insurance providers need to take some payment before they can provide you and your vehicle with any type of cover.

Usually you can pay all of your premium in one go or pay it off over the whole year. Paying your premium off in one go usually works out cheaper, but it does mean that you will have to find a large chunk of cash to cover your insurance, which is why many people still prefer to spread their car insurance premium payments, despite the extra cost.

However, at the cost of an extra charge on your car insurance premiums, you might be able to arrange to pay your car insurance over a 12-month period. Many car insurance providers will require you to pay roughly 20% of the total annual insurance premium upfront and then pay the rest in equal instalments for the rest of the year. But there are some car insurance providers attempting to cater to the demands of those who want to pay off their annual car insurance in equal 12-month instalments.

These car insurance deals are the closest you might get to a ‘no deposit car insurance’ deal, but they are not all that common, and besides, you still have to make the first payment before any cover kicks in.

Paying off your annual car insurance premium in instalments is similar to a credit deal, so you will most likely have to pay extra to do so. Similarly, there is an extra charge if you decide you want to pay off your car insurance using a credit card – in fact this would probably come with a relatively small extra admin fee on top of the fee required if you want to pay it in instalments.

Be sure to get a break down of all the costs when buying your chosen car insurance. As mentioned previously, it is likely that your first payment will be higher than the rest of the payments you make if you choose to pay in instalments, so make sure you have enough money set aside to cover that. If the costs are still too high, then consider your other options first.

Getting cheaper car insurance without a deposit

If you are looking for no deposit car insurance, chances are you are already finding it difficult to find the right cover for you and your car at the right price. You won’t be able to avoid paying some costs upfront, but there are some things you can do to potentially reduce the cost of the quotes you get given by car insurance companies. Take a look at our top 10 tips on cutting the cost of your car insurance.

You might just be looking to spread the cost of your car insurance over 12 months, rather than looking for no deposit car insurance, which just doesn’t exist. Either way, shopping around and following some of our useful tips can help you save money on your car insurance premiums.

Read More

What does my car insurance policy cover? Can I drive someone else’s car?

Are you insured to drive another car on your own insurance policy? What does comprehensive or third party insurance cover? Read our guide to find out whether you’re covered when you borrow another person’s car

Are you insured to drive a car that’s not your own? Even if you have your own comprehensive car insurance policy, you may not be covered to drive another vehicle. Without the minimum level of cover, you’ll be driving illegally, so it’s important to understand the rules.

Many people assume that their own comprehensive car insurance policy allows them to drive another vehicle — perhaps you occasionally drive your partner’s or family member’s car assuming you get the same level of cover as they do.

But the likelihood is, you may not be covered to drive it at all unless you’re specifically named on the policy.

Does car insurance cover include ‘Driving other cars’?

If you have a comprehensive policy on your own car, you may have driving other cars (DOC) cover included. In the past, driving other cars was a fairly standard addition to comprehensive policies, but fewer insurers now offer the cover.

Although driving other cars cover does allow you to drive another vehicle, most policies will only cover you to drive other cars with third party cover, rather than the fully comprehensive cover you get on your own car.

Third party is the minimum cover you legally need to drive, and in the event of an accident your insurer will pay for any damage to third party vehicles or property, but will not pay for repairs or replacement of the car you were driving. So if you’re driving a friend’s car and get into an accident, you could be liable for any repair bills to their vehicle as this won’t be covered by insurance. This level of cover will also cover injuries caused to any third parties, including your passengers, but not to yourself. Read our guide on the different types of insurance to learn about third party, third party fire and theft, and comprehensive insurance policies.

Driving other cars cover is usually only available on a comprehensive car insurance policy. If you have third party (or third party, fire and theft) cover on your own car, you won’t be covered to drive any other cars.

Can everyone get ‘driving other cars’ cover?

Unfortunately, driving other cars cover is not available to everyone. Insurers will typically exclude DOC cover from your insurance policy if you are under 25, as you’re seen as a higher risk to insurers.

Some occupations are excluded too. Those in the motor trade, for example, are likely to drive their customers’ cars regularly, so insurers may take the view that you’re more likely to crash someone else’s car. If you drive your customers’ cars, your company should have its own insurance in place for those circumstances.

Things to consider

It’s important to realise that driving other cars cover should not be seen as a substitute for a full car insurance policy. If you get into an accident while driving someone else’s car, you could end up paying a hefty repair bill. If you plan to use another person’s car regularly, or even occasionally, ask for them to add you as a named driver on their insurance policy. Depending on your driving experience, it could even help to cut the cost of their cover. Alternatively, you could consider a temporary car insurance policy if you plan to borrow their vehicle as a one-off. You can even get one day cover to drive someone else’s car.

If you own a second car, don’t think you can get around getting insurance for it by using your ‘driving other cars’ cover from your first car. Driving other cars cover is an add-on intended to allow you to drive other cars in an emergency, and will not extend to other cars you own.

What if I don’t have my own insurance policy?

It’s important to understand that you can only drive a car if you have insurance — if you don’t have your own insurance policy (either on your own car including DOC cover, as a named driver on the car owner’s policy, or standalone temporary cover), you will not be legally covered to drive.

Remember that it’s not the car that’s insured — it’s the driver. So while the owner of the car may have an insurance policy for the vehicle, each driver needs to have their own insurance (with driving other cars cover), or be specifically named on the policyholder’s insurance policy.

The bottom line is you must have insurance to drive a car, whether it’s your or somebody else’s. The only exception is when you’re hiring a car or taking driving lessons in a professional instructor’s car, as the insurance will be included in the cost of the hire car or lesson.

All things considered, it’s best not to jump into a friend’s car and assume you can legally drive it, even with their permission. If you have a comprehensive policy on your own car, check your paperwork carefully to see if you’re covered to drive other cars. Alternatively, you’ll need to be named on your friend’s policy or take out your own temporary policy on the car.

Read More

Modified car insurance

Car modifications are not exclusive to boy racers or petrolheads — as well as turbocharged engines and spoilers, insurers take more modest vehicle modifications into consideration when arranging your cover — anything from alloy wheels to safety features such as parking sensors.

Different types of modification will affect the cost of your cover differently — some will not alter your premium at all, and some could even reduce it. But your insurer must be informed so they can provide appropriate cover, and you could be driving illegally if your insurance policy is invalidated because you didn’t declare everything on your policy.

What counts as a modification?

Car modifications can be performance-based or purely cosmetic, but insurers will want to know about any changes made to the vehicle.

When you get a quote from a price comparison site such as uSwitch, you’ll be able to select from a list of modifications. You might be surprised to see what these include — alongside performance modifications such as engine alterations, you’ll also be asked to declare additions such as sunroofs, parking sensors, paint work, and tow bars.

Most insurers will only ask you to declare these alterations or accessories if they were added after the car’s manufacture, but others will consider these to be modifications if they were not part of the basic specification of the car, i.e. if the manufacturer provided these as optional extras when the car was purchased. Not all insurers will take this into account, so when you’re comparing online it’s best to select these as modifications. If you’ve got an existing policy and you’re concerned that you haven’t declared everything, just give your insurer a call and ask whether they take these types of modification into account.

Informing your insurer about modifications

If you’re taking out a new insurance policy, it’s important to declare any modifications at the comparison stage to ensure the quotes returned are accurate. By not declaring modifications, you could be left without valid cover, which is a legal requirement.

If you make any alterations to your car during the course of your insurance policy, you should declare this to your insurer immediately. Don’t wait for your renewal notice as you may not be covered in the meantime.

How do modifications affect the cost of car insurance?

As you might expect, some types of modification will increase the cost of your car insurance. Some performance modifications can make your car more powerful, meaning it’s more likely to sustain or cause damage in the case of an accident. Other modifications will make your car more attractive to thieves or could increase the value of your car, and your insurer may increase your premium to reflect this added risk.

However, some types of modification could positively affect the cost of your insurance. Safety features such as trackers and parking sensors could save you money — but be aware that the insurer will also take the equipment’s replacement cost into account, meaning your premium could actually go up or down.

How to get cheap modified car insurance

If you’re thinking of modifying your car, think carefully about the type of modification you want and how it could impact the cost of your car insurance. Some will not affect the cost of cover (or could even reduce it), while others could result in a significant increase.

Many insurers are wary of modified vehicles, and some won’t even provide a quote if the car has been altered in any way. But there are many specialist insurers who are happy to cover cars with modifications, and can offer tailored benefits and affordable quotes, so it’s best to shop around.

Read More