With so many options available when it comes to finding the best policy for your needs, the trickiest thing can be knowing how to compare car insurance. What can make it particularly frustrating is that you may have found the best deal one year, only to find that the same insurer is uncompetitive 12 months later.
This could be because your insurer fails to reward loyalty. It may also be a result of your circumstances having changed. Maybe you’ve bought a different car, changed job or address, or possibly you’ve made a claim or been convicted of an offence. That simply underlines the need to at least check the premiums elsewhere before renewing the policy.
Sources of quotes
If it’s time for you to renew your cover, there are two options available. One is to contact insurance companies directly, either by calling or going online. The other is to use a broker or comparison website. They will be able to obtain quotes from more than one company and therefore make it easier for you to find the one that best suits your circumstances and the level of cover you need.
Factors that affect premiums
The nature of the cover you select will of course have a major impact on the premium you’ll have to pay. The cheapest form of protection may be third party cover, which is the most basic cover. This will only pay out the cost of repairing damage to the other party if you are involved in a collision. You will have to pay for any damage to your vehicle. Clearly this type of insurance is limited. Third party fire and theft policies are the same, but as their name suggests, they also provide protection if your vehicle is stolen or damaged by fire.
Comprehensive cover will pay the cost of repairing damage to your car as well as any other vehicle involved in a collision that is your fault. The amount you receive will typically be the total cost of the work, subject to deductions for a policy excess.
Before you settle on a final premium, you should think about the size of the policy excess you are comfortable with. That is the amount that will be deducted from any claim. For example, an excess of £100 means that if your car is damaged and you claim £1,000, the insurers will deduct the agreed excess and pay out £900. A higher excess will reduce the overall cost of your premiums, partly because it makes it less likely that you will make claims for minor damage.
The type of car, age and occupation of the driver, and the address where the vehicle is registered will also have an impact on the annual premium. Among the other factors that can influence the cost include where you will park overnight – on-street parking carries a greater risk of damage than the car being kept in a garage. Security features such as an alarm usually make it cheaper.
The insurer will ask how much driving you typically do in a year. Obviously, a higher mileage increases the possibility of being involved in an accident and will therefore lead to a higher premium.
You should also decide whether you want to include policy extras such as breakdown cover or legal protection to settle any dispute arising from an accident, and whether you want to include the option of having a courtesy car if your vehicle is too badly damaged to drive.
How to pay
Once you’ve settled on the cover you want, there is one final factor you need to consider. It will normally be cheaper to pay the premium in a single instalment rather than monthly payments.