Car insurance provides cover for yourself and other drivers in the case of a collision
whilst driving, it is against the law to operate a motor vehicle without the correct
insurance in the UK. Car insurance can be pricey and the amount you pay depends
on your individual circumstances, the factors that will affect the price most are
listed below in the order of their importance;
• Your age
• Your driving record(points or previous convictions on your license)
• Your previous claims
• Your chosen excess amount
• The security features of your car
• Your type of cover
• Where you live
• Where your car will be parked
• How many miles you will cover a year
There are other factors that will affect your car insurance quote but these are
the most important. Car insurance has always been a bit of a grey area for drivers
due to the hundreds of insurance companies out there all offering some sort of incentive
if you choose them, which one to choose can be tricky and in this section, Fineline
Driving Academy has broken down car insurance to help you get your head around it.
Factors that affect your car insurance quote explained
The first and most important thing which affects your car insurance quote is your
age, unfortunately the younger you are means the more you will pay simply because
of your lack of driving experience. In recent years, around a quarter of all recorded
road accidents involved at least one driver between the ages of 17-24, this is one
statistic that insurance companies are all too aware of and a top reason for higher
premiums for younger drivers. Another large factor which affects your insurance
premium is the amount of time you have held a license for, and any previous claims
you have submitted in previous years. Insurance companies like drivers who have
a history of not claiming on their insurance policies and offer very hefty discounts
for these types of drivers.
When getting an insurance quote, you will be asked if you would like to raise your
voluntary excess and by which amount. Your excess is the amount you will pay towards
any claim on your insurance policy, the higher excess will result in a cheaper quote.
For example, you claim for damages in an accident which you are fault for that will
cost £2950 pounds, a voluntary excess of £750 will mean that you have to pay this
excess with the insurance company paying out the remaining £2200. Your compulsory
excess is the amount you must pay for any ‘at fault’ claim, this is usually higher
for younger drivers. The security features of your car are also important, a modern
vehicle with good security features will reduce the chances of it being stolen or
broken into, older less sophisticated cars pose more of a risk to insurance companies.
Your postcode affects the price of insurance you will pay, insurance quotes will
be steeper for areas where car crime is high. Also, where your car will be parked
overnight can make your car insurance quote lower/higher, all insurance companies
will like your car to be parked in a locked garage overnight as this is safer than
in a public car park. You can expect to pay less for car insurance if you only plan
to travel a few thousand miles a year, the more you travel, the more chance you
have of being involved in an accident.
Different types of car insurance cover
As mentioned at the top of this page, your type of cover will have a big say on
how much you pay for your car insurance. A basic cover will cost considerably less
but can leave you out of pocket if you need to make a claim, similarly a more complete
cover will cost more but will be more cost effective if you claim. Below are the
different types of car insurance policies you can get and a brief explanation on
what they offer;
Third party car insurance:
This is the most basic type of cover and generally the cheapest option. In the event
of an accident where you are deemed to be at fault, your car insurance company will
cover any damages to the third parties vehicle, property or passengers but your
car is not covered. With this in mind, if your car is severely damaged in an accident
where you are at fault, you won’t be paid out by your car insurance provider with
a third party insurance policy. If your vehicle is stolen or damaged in a fire,
you are also not covered.
Third party fire & theft car insurance:
This type of insurance policy is identical to third party car insurance however
as you have probably guessed already, you are additionally covered if your vehicle
is stolen or damaged in a fire. These types of policies are usually only slightly
more expensive than regular third party car insurance and therefore its worth getting
a third party fire & theft policy over regular third party insurance.
Fully comprehensive car insurance:
This is generally the pricier option of car insurance that covers you, as well as
any third parties in the case of an accident, for pretty much everything that can
be claimed for. With a comprehensive car insurance policy, your vehicle is covered
against fire, theft, accidental damage and so will anyone involved in an accident
with you. This type of insurance is recommended for owners of higher value cars,
or just simply for peace of mind knowing that in the case of an accident, you will
more than likely be covered.
Younger drivers are usually inclined to go for the cheapest type of insurance policy,
the term ‘you get what you pay for’ should come to mind when choosing your type
of cover. If you are a younger driver and are deemed to be at fault for an accident,
you can expect any future insurance policies to cost a lot more because of your
risky history. Think carefully about which insurance policy is suitable for you
and avoid going for the cheapest option, you should also definitely avoid using
false details to benefit your insurance quote because if you are found out, your
insurance policy will almost certainly be cancelled immediately.
Being a second driver on a policy
Being the second driver on a car insurance policy can bring down the total cost
for the cover, insurance companies will consider the main driver to be the primary
driver of the car with any additional drivers only occasionally using the car. This
can be a cheaper option if the main driver is more experienced or has a good amount
of years of no claims discounts, however any ‘at fault’ accidents involving any
additional drivers will result in the main drivers insurance being hit with a much
higher renewal price.
Car insurance ‘fronting’ is a method of abusing this type of insurance cover, it
is generally committed by younger drivers to drive down their insurance costs and
involves the second driver solely driving the car. The main driver of the car, (usually
a young drivers mum or dad), will hardly drive the car and is only on the policy
to help the insurance cost stay down. Car insurance ‘fronting’ is illegal and being
caught will result in your car insurance being cancelled and a black mark left on
your history for any future policies.
No claims discounts
Probably the biggest reason that contributes to your car insurance quote is the
amount of years you have been insured before but not claimed, the more years you
have means a higher discount for your insurance quote. Car insurance companies have
a soft spot for careful drivers as they are less likely to claim, so its worth building
up a healthy amount of years without claiming to keep future car insurance premiums
low. If you change your car insurance provider, you will have to prove you are eligible
for any no claims discount with a letter from your previous provider.
Nearly all insurance companies will allow you to protect any no claims bonuses you
may have built up over the years however you will usually need to have at least
3 years of claim free insurance cover to have this option. It is an extra that you
will have to pay for, but it allows you to keep your no claims bonus in the event
of a claim and therefore ensure cheaper future car insurance prices.
Pay as you go car insurance
This rather modern type of car insurance was introduced in recent years to help
younger drivers afford car insurance. Fineline Driving Academy is a big fan of this
type of car insurance as the amount you pay is reflected by how much you drive,
and possibly when you drive and how you drive and therefore promotes a responsible
style of driving. When choosing to go for pay as your drive car insurance, the insurer
will install a small black box to your car which will monitor how many miles you
cover as well as other details about your driving. This information is received
regularly by the insurer who then tells you how much you should pay, sort of like
a gas meter in terms of the more your use will mean the more you end up paying.
You will pay less if you don’t cover many miles and drive during off peak times
of the day (generally at night or early in the morning), all insurance companies
charge different amounts per mile and class off-peak times to their own discretion
so you should always check the small print.
If you are a driver who plans to drive sparingly, or you have an odd shift pattern
at work meaning you will be driving when the roads are quiet, it is worth considering
this option. As with most things in life, there are downsides which include a fee
for having the black box installed but the main advantage of cheaper car insurance
means it is something you should check out. Use Fineline Driving Academy’s car insurance
comparison service to see if this option is for you, just click here.
Car insurance fraud
Car insurance fraud is a crime which has increased sharply in recent years, many
different insurance related scams such as ‘crash for cash’ or using false information
to obtain car insurance contribute to higher premiums for innocent drivers. The
actual cost of car insurance fraud in the UK is hard to pinpoint, but estimates
of well over £1 billion annually are not exaggerated, Tesco claims that car insurance
fraud adds an extra £50 onto each individual insurance premium which means that
it directly affects everyone.
An excellent service provided to combat car insurance fraud can be found at this page.
This website contains lots of great information to prevent being a victim of car
insurance fraud as well as a host of different facts and figures regarding the subject.
Additionally, there are many case studies of previous car insurance fraud cases
which shows the severity of what can happen if you are caught committing this crime.
Pay monthly or pay annually
Car insurance firms will offer you a few methods of paying for you to choose from,
you should take a look at your financial situation and select the option which best
suits you. As you may have guessed, paying your car insurance for a year in one
go will result in a slight discount as companies prefer this option, paying in monthly
instalments will mean you pay a higher amount in the long run. Below you will see
a quick breakdown on different payment options and a brief description on what they
Paying annually: The easiest way to pay for your car insurance is paying the whole
lot in one go as soon as your cover begins. This option takes away the hassle of
monthly payments or direct debits, and you can rest assured that your car is insured
to drive for a whole year without any additional charges. Of course this option
is only viable if you can afford the whole amount! Because of this, many older drivers
tend to go for this option with younger drivers unable to afford such a lump sum
which can easily top £1000.
Paying in 12 monthly instalments: This option is more suitable for drivers without
such a comfortable financial situation and involves a certain amount being deducted
from your account on a monthly basis. You should make sure you have enough money
in your account because if the debit is rejected by your account, your insurance
will be invalid and you could have your car seized if caught by the police. Its
also worth noting that insurers will charge an extra premium if you choose this
option, normally anywhere between 5%-10% extra.
Paying in quarterly instalments: This option is sometimes offered where you can
pay a quarter of your total insurance 4 times a year. The advantage of this option
is that the extra premium the insurance company charges you wont be as much as paying
monthly and this option gives you the chance to have a few months to save up for
that next payment.
Car insurance payment options case study:
The following shows an example for a driver whose annual premium is £1200 and the
different options they can choose to pay with along with the amount they will pay.
Option A, pay the full amount:
One off payment of £1200
Total amount paid after 1 year = £1200
Option B, pay in monthly instalments:
12 monthly payments of £110
Total amount paid after 1 year = £1320
Option C, pay in quarterly instalments:
4 payments of £320, once at the start of your cover then every 3 months
Total amount paid after 1 year= £1280
FINELINES car insurance comparison service
As well as free impartial expert advice on everything for the learner driver and
experienced driver topics, Fineline Driving Academy offers a free car insurance
comparison service which is adapted for young drivers in order to get you the best
possible quote. Filling in a quick questionnaire that will take no longer than 5
minutes will return hundreds of car insurance quotes for you to choose from, give
it a try by clicking here. You’ve got
nothing to lose and could save yourself a small fortune!
FINELINES summary of car insurance
Its that time of day again when well give you a quick summary of what we’ve gone
through on this page, its worth having a read of everything above in depth to get
a better idea on how car insurance works and to give you more insight into which
types of insurance to go for.
• Get plenty of quotes from as many different companies as possible, the car insurance
market is fierce and many companies will undercut each other to obtain your business.
Try our car insurance comparison service here.
• Always tell the truth when giving your details to an insurance company, many people
are inclined to bend the truth to get a cheaper quote but this is illegal and could
lead to your insurance being invalidated if caught.
• Consider which type of policy you go for carefully. It usually always comes down
to what you can afford, if your vehicle does not have a high market value its worth
going for third party fire & theft cover. If your vehicle is worth a substantial
amount of money, you should protect your investment and go for comprehensive cover.