2023 Ultimate Guide to Car Insurance

March 24, 2023 by Zoe Hicks – 9 mins read

Most of us look to obtain the cheapest car insurance possible for the cover we’re after, and the easiest way to do this is to visit a car insurance comparison site. Read our guide on how to get cheap car insurance

How to get cheap car insurance?

Most of us look to obtain the cheapest car insurance possible for the cover we’re after, and the easiest way to do this is to visit a car insurance comparison site. Designed to gather in quotations from numerous different insurance companies, so you don’t have to, places like GoCompare, MoneySupermarket and ComparetheMarket only require you to complete all the tedious information once to produce numerous quotations which you can sort to show the cheapest insurance provider. However, it’s still recommended to check the quotation for details of what’s included before making a final decision, to make sure you are getting the cover you need. Once you’ve decided which insurance company you’re going with, you can gain additional savings:-

  • Pay the premium annually and avoid monthly interest through instalments.
  • Be careful when selecting your job title. Whilst you must never lie about your occupation, which would be considered fraud, insurance companies do take into consideration what you do for a living.
  • Paying a higher voluntary excess will also bring down premiums, but you need to consider that if you do need to make a claim, then you will need to pay this excess.
  • Don’t leave the policy on auto-renew. Insurance companies would just love you to auto-renew without checking what the latest premiums are with their competitors. Chances are, you’ll find cheaper car insurance with a new insurance company, and you can always then go back to your existing car insurer and ask them if they’ll match the price.

What is a no claims bonus in car insurance?

Put simply, a no-claims bonus or discount is a percentage amount your car insurer will deduct off your yearly insurance premium to reward you for not having made a claim in the previous year or years. An example would be if you had a 40% no-claims bonus and the premium was £1,000, you would pay £600 for your yearly premium. Any consecutive year in which you made no insurance claim, the discount percentage would increase. Each insurer will have different no-discount percentages and the number of years you can claim, however, generally most insurers will register a maximum of five to nine years no-claims with a maximum percentage discount of up to around 80%.

What are the different types of car insurance?

The three main types of car insurance that you can take out are third party, third party, fire and theft and comprehensive. They each offer different levels of cover with third party being the cheapest cover with minimal cover and comprehensive the most expensive option.

What is third party car insurance?

Third-party cover is the minimum level of car insurance required by law. A typical policy will cover:

  • Damage to someone else’s car or property.
  • Injury you may cause to others.
  • Injury to your passengers during an accident.

A third party insurance policy won’t cover you or your vehicle, including if your car was damaged in a fire or stolen.

What is third party, fire and theft insurance?

Third-party, fire and theft insurance will cover everything a third party car insurance policy does, but with the added protection against fire and theft. If you live in a high-risk area for crime, it’s certainly worth considering. A typical third party, fire and theft policy covers:

  • Damage to someone else’s car or property.
  • An injury you may cause to others.
  • Injury to your passengers during an accident.
  • Fire damage.
  • Theft (depending on the policy, this may possibly include damage caused by attempted theft).

Be aware that cover will only be paid out after paying any agreed compulsory and voluntary excesses, and remember, this type of policy won’t cover you or your car (except for theft or fire damage).

What is comprehensive car insurance?

Fully comprehensive car insurance offers the highest level of cover available, and it does perhaps make sense if your vehicle is new or expensive. This type of policy covers your vehicle in addition to any third party involved. A typical comprehensive policy will include:

  • Damage caused to someone else’s car or property.
  • Any injury you may cause to others.
  • Injury to any passengers during an accident.
  • Fire damage.
  • Theft.
  • Possibly damage caused by attempted theft (depending on policy and excess).
  • Accidental damage to your vehicle.
  • Car bodywork (e.g. chips/scratches).
  • Malicious vandalism or damage.

Be aware that cover will only be paid out after paying any agreed compulsory and voluntary excesses. Similarly, you should be aware that comprehensive car policies don’t always include extras such as windscreen cover, courtesy car, and personal belongings. Personal injury to yourself is also not always included, so it’s advisable to always check with your policy provider before taking cover out.

What is an excess on car insurance?

An excess on a car insurance policy is a fixed amount you will need to pay when making a claim.

  • A compulsory excess is what the name suggests, a mandatory amount that becomes payable, under your policy, when making a claim.
  • A voluntary excess is just that, voluntary. It is an amount that you decide on and agree to pay in the event of a claim, and is a common way of bringing the yearly insurance premium down.

Be aware that in the event of a claim, both the compulsory and voluntary excesses will need to be paid.

How many insurance policies can you have on a car?

Overlapping car policies on renewal can sometimes happen, so it’s not illegal to have more than one insurance policy on a car. Indeed if there is more than one driver, then each driver may decide to take out individual policies. However, it is illegal to make two claims for the same incident, which would be considered fraud.

What is multi-car insurance?

As the name suggests, multi-car insurance is a product offered by insurance companies to get you to insure more than one vehicle with them. In return, discounts are applied to the premium. The more cars you insure, the larger the discount. You register your first vehicle under the policy and then as other cars come up for renewal, you add them too, each earning their own no-claims bonus. After 12 months, all the vehicles have one renewal date.

Will my car insurance go up after a claim?

In a nutshell, yes. If you make a claim, then almost certainly this will increase your premiums. You will also likely lose some or all of your no-claims discount (unless you have this protected).

Why is car insurance so expensive?

Insurance is calculated based on risk, and every insurance company will look at various factors when assessing what someone’s premium is going to be including age, occupation, mileage, the vehicle and its value and whether you’ve made any claims in previous years. Unfortunately, car insurance can especially be expensive for young drivers (under 25) as they’re seen as a higher risk and in some cases, this can happen if you’re over 70 too.

Why has my car insurance gone up?

If your insurance goes up during the year, then this will most likely be due to a claim being made or policy amendments including:

  • Change in occupation.
  • Yearly mileage increased.
  • Vehicle change or value has increased.
  • Modifications.

On renewal, it seems almost predictable that the quotation you’ll receive from your insurance company will be higher than the previous year regardless if the policy has changed or not. Don’t auto-renew without shopping around for new quotations. Chances are you’ll get a cheaper quote as a new customer with a different insurer.

How to get cheap car insurance for young drivers

Car insurance for the under 25s is certainly eye-watering with premiums averaging around £900 per year, so you’ll want to do everything you can to ensure you’re getting the cheapest you can for the cover you need. Ways to do this are:

  • Set your excess correctly. Whilst it may seem tempting to set a higher excess amount to bring the premium down, you need to remind yourself that this amount will need to be taken into account when making any claim. Consider carefully the amount of the excess you set so that it can bring the premium down and also be manageable if the need arises.
  • Don’t presume third party is the cheapest option. Whilst it may seem logical, insurers think people who choose third-party insurance are more of a risk, so it’s always prudent to get quotations for all three levels of cover to see how they compare.
  • Ironically, adding a responsible second or third driver to your policy as an occasional driver can sometimes bring the premium down. While it may seem logical that the premium would increase (and in some cases, it might), by adding a driver with a good history can bring the risk down thereby reducing the premium. Similarly, try more than one person as adding your dad may increase the premium, but adding mum instead may bring the premium down.
  • Choose the right car. Make, model, engine size and value all matter. By selecting the latest vehicle with a big engine will undoubtedly return an excruciatingly high premium. Whilst your mum’s one litre Peugeot 107 may not look cool, it’ll undoubtedly be good for your wallet.
  • Don’t auto-renew. Insurance companies rely on customers who are dependent on auto-renewal and who typically won’t bother checking current prices. Always shop around before renewal to make sure the premium being offered is still the best.
  • If you live at home or have more than one vehicle, then a multi-car insurance policy may save you money. You won’t see quotations for multi-car insurance on comparison sites so you will need to go directly to those companies offering them. You simply add each vehicle to the policy as they come up for renewal and get rewarded by lower premiums.
  • Consider a telematics policy (otherwise known as a black box). If you don’t want to be considered a typical high-risk young driver, then this is undoubtedly going to bring the premium down.

How to check my if my car is insured?

It happens to all of us at one time or another, you can’t remember renewing your car insurance and want to quickly check you’re covered. Easy, just check on the Motor Insurance Database, and you’ll be good to go.



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