Considering car insurance comes with a raft of thick policy documents filled to the brim with exclusions and other conditions, we can often be surprisingly confident about how well we understand it. Apparently, 86% of us are comfortable buying it online, according to data services company Defaqto.
Speaking as a former insurance consultant and claims manager, I think that, for the most part, most of us probably understand the basics pretty well. However, what many people aren't fully aware of is that no two policies are the same, even if they are both called 'comprehensive'.
There are a few common and potentially very expensive traps that car insurance buyers frequently fall into. Here are 10 features of the policy you should be sure to check, particularly if you're comparing online.
1. Get the basics right.
Choosing third party, fire and theft cover will mean your insurer does not pay to repair your own vehicle after an accident, although the other driver's insurer should pay if it was their fault. Comprehensive insurance adds on accidental damage to your own vehicle. You also want to pay a total excess - that is the 'voluntary' excess plus 'compulsory' excess - that is affordable for you, although a higher excess can reduce the cost of your premiums.
Choosing third party, fire and theft cover will mean your insurer does not pay to repair your own vehicle after an accident, although the other driver's insurer should pay if it was their fault. Comprehensive insurance adds on accidental damage to your own vehicle. You also want to pay a total excess - that is the 'voluntary' excess plus 'compulsory' excess - that is affordable for you, although a higher excess can reduce the cost of your premiums.
2. Courtesy cars
Not all comprehensive policies offer a replacement car as standard while yours is being repaired and, if you do get one, the length of time you're allowed to keep it can vary. On a related note, you might want to check whether the policy entitles you to a courtesy car when you use your own repairer, rather than one chosen by the insurer.
Not all comprehensive policies offer a replacement car as standard while yours is being repaired and, if you do get one, the length of time you're allowed to keep it can vary. On a related note, you might want to check whether the policy entitles you to a courtesy car when you use your own repairer, rather than one chosen by the insurer.
3. Audio equipment and modifications
If you have expensive audio equipment, check how much insurance cover you have got, because few policies include cover for systems worth more than a few hundred pounds. It's worth bearing in mind that some insurers are very picky about modifications, even if you have merely given your car some stylish painting. Ensure that your insurer is happy to offer you any cover at all, otherwise this could become a sticking point if you ever need to claim.
If you have expensive audio equipment, check how much insurance cover you have got, because few policies include cover for systems worth more than a few hundred pounds. It's worth bearing in mind that some insurers are very picky about modifications, even if you have merely given your car some stylish painting. Ensure that your insurer is happy to offer you any cover at all, otherwise this could become a sticking point if you ever need to claim.
4. Optional extras
Check you have legal cover if you want it - this helps you recover uninsured losses when someone crashes into you. Those losses might include your policy excess, travel costs while your car is being repaired, and loss of earnings if you are unable to work for a time. If you go for breakdown cover, you might want to know if it extends to Europe automatically at your full level of cover and for how long.
Check you have legal cover if you want it - this helps you recover uninsured losses when someone crashes into you. Those losses might include your policy excess, travel costs while your car is being repaired, and loss of earnings if you are unable to work for a time. If you go for breakdown cover, you might want to know if it extends to Europe automatically at your full level of cover and for how long.
5. Protecting your no claims bonus
Find out how many claims you can make, in addition to previous ones, before your protection is removed. If the answer is zero, do not make the common mistake of paying extra for the protection.
Find out how many claims you can make, in addition to previous ones, before your protection is removed. If the answer is zero, do not make the common mistake of paying extra for the protection.
6. Loss of keys
Car keys are expensive to replace, so you might consider checking if lost keys are covered by your policy.
Car keys are expensive to replace, so you might consider checking if lost keys are covered by your policy.
7. Windscreen cover
Windscreen damage often has a different excess to your standard excess, so compare amounts when you run your insurance comparison. You might also want to look at the small print to see how many windscreen claims you are allowed to make before your no claims bonus is affected.
Windscreen damage often has a different excess to your standard excess, so compare amounts when you run your insurance comparison. You might also want to look at the small print to see how many windscreen claims you are allowed to make before your no claims bonus is affected.
8. Driving other cars
Many people assume that they are allowed to drive other cars if they have comprehensive insurance, but this is not true. Often age and other factors are taken into consideration. You might have to call the insurer to establish if you will get cover to drive other cars or not, because otherwise you might not find out until you receive your insurance certificate.
Bear in mind that this cover is usually very limited - it's designed to be used in exceptional circumstances only - so you cannot use it for other vehicles owned or insured by you and it often offers you even less protection than third party-only cover.
Many people assume that they are allowed to drive other cars if they have comprehensive insurance, but this is not true. Often age and other factors are taken into consideration. You might have to call the insurer to establish if you will get cover to drive other cars or not, because otherwise you might not find out until you receive your insurance certificate.
Bear in mind that this cover is usually very limited - it's designed to be used in exceptional circumstances only - so you cannot use it for other vehicles owned or insured by you and it often offers you even less protection than third party-only cover.
9. New for old cover
Defaqto has reported that 95% of policies would replace a new car if it was written off or stolen, but some would only do so in the first 12 months and others in the first 24. Also, some replace a car if the damage costs 50% of the listed price; others will do so at 70%. Around half of policies will not replace imported cars.
Defaqto has reported that 95% of policies would replace a new car if it was written off or stolen, but some would only do so in the first 12 months and others in the first 24. Also, some replace a car if the damage costs 50% of the listed price; others will do so at 70%. Around half of policies will not replace imported cars.
10. Changing your vehicle
When changing your vehicle, make sure that the level of cover your insurance provider offers is still appropriate.
When changing your vehicle, make sure that the level of cover your insurance provider offers is still appropriate.
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