5 things to look at when renewing your car insurance
Buying car insurance can be a daunting task. Should you choose a third-party policy or full coverage? How high should the deductible be? Why are policies so much cheaper for different people. As part of our goal to make insurance accessible and affordable, we’ve launched our insurance vocabulary series, explaining a common term each week. The more you understand about insurance, the easier it is to get a policy that’s right for you.
If you don’t get the right type of insurance, you might end up overpaying, or worse, have your claims denied. The last thing you’d need after an accident!
Don’t worry, we’ve got you covered, with VouchForMe’s guide to buying car insurance.
Price
Many people will go with the cheapest option, but make sure you scrutinize your policy and check the fine print. Many policies will include extras and add-ons to entice new customers, so make sure that the policy is suitable for you.
Car insurance prices regularly fluctuate, and insurance companies use various factors to analyze your risk profile and work out the amount you’ll pay. Each insurance company interprets risk differently, so shop around.
Level of Coverage
There are several different types of cover, but the most common three are third-party, third-party fire and theft, and fully comprehensive.
Third-Party — In the majority of European and North American countries, third-party is compulsory by law. If you get into an accident and found to be at fault, your car insurance company will cover the damage to another person’s car and any injuries to the other driver, your passengers, or any pedestrians. It won’t cover damage to your vehicle. Generally, this is the cheapest type of car insurance and is suitable for drivers with low-value cars who can’t afford a fully-comprehensive policy.
Third-party, fire, and theft — Similar to third-party, but it will also cover you from fire damage, or theft.
Fully-Comprehensive — Fully comprehensive covers damage to your car as well as fire, theft, and any third-party damage.
Deductible
The insurance deductible, also known as an insurance excess is the amount that you pay when you claim damage to your car, meaning that if your deductible is £500 and you make a claim for damage which costs £3000 to repair, you’ll pay for the first £500, The insurance company will cover the remaining £2500.
Almost all insurers will have a compulsory deductible, to stop people claiming for tiny scratches or small dents. Usually, companies will allow you to take on a higher excess in exchange for a reduction in the price of your premium.
While it’s very tempting to take a high excess to save on the cost of the premium, make sure you commit to an amount that you’ll be able to pay, in case of a claim. Otherwise, you could end up without a car. With VouchForMe, you can lower the cost of your excess through the use of a guarantor.
Courtesy Car
When choosing a policy, it’s essential to think about how you’ll get around if you do need to claim, and your car needs to go away for repairs. Depending on the damage done, it can take an insurance company anything from a few days to several months to fix a car after accident damage, with the average UK nationwide time being 12 days. A courtesy car is one that’s provided by your insurance company while your vehicle is in for repair. If you can’t get to your place of work with public transport, choose a policy with a courtesy car included. Otherwise, you could end up with some very hefty taxi bills.
As always, the type of courtesy car varies. Most policies provide a basic courtesy car as standard, usually a small car, as these are cheaper to run, and most drivers can manage with these for a short time. Some companies will try and provide you with a car that’s of a similar size and power to yours, and some will offer this if you pay a higher price for your premium. Make sure you check the courtesy car terms when buying a policy.
Extras
There are many extras that insurance companies offer to entice extra customers, so we’d like to highlight some of the most common and beneficial ones.
Personal effects
Coverage that insures you for personal belongings stolen from your car, as usual, it varies from company to company. Cash is rarely covered, and you won’t be able to claim if you leave your car unlocked or a window open.
Uninsured driver coverage
Frustratingly, many people drive without insurance. In 2018 in England and Wales, almost 80,000 were caught in 2018 driving with no form of cover. While a fully-comprehensive policy should cover any damage to your vehicle, third-party insurance will not. Some companies include uninsured driver protection into their third-party policies, peace of mind for those who can’t afford fully-comprehensive.
Breakdown Cover
Some insurance companies offer breakdown cover as an extra. It’s rare to get it thrown in but common as an extra. Usually, it’ll be cheaper buying it through your insurance than buying it directly from a breakdown company, but don’t pay for something you don’t need! Breakdown cover is often included as part of new-car warranties.
Driving abroad
If you regularly drive abroad, it’s worth seeing if your insurer includes this in your policy, some do, but usually only for a limited amount of time, or only on a third-party basis. Check your policy before each trip abroad, even if you think you’re covered.
Insurtech
Technology is changing insurance, and we believe that’s for the better. Some insurance companies have started to partner with start-ups to offer extras to their customers; the most well-known is telematics technology, such as the black box, which tracks your driving habits. However, it doesn’t always paint the most accurate picture of driving behavior. An alternative is peer-to-peer car insurance, such as VouchForMe’s social proof, which allows drivers to harness their social network to get their premiums down. Sure we’re biased but have a look at our product here and see how social proof can help you save money.
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