Car insurance is a legal requirement for anyone who drives on a public road. All motorists must be insured against their liability to other people, including passengers, and for damage to other people's property if their car causes an accident. Anyone who drives a car must be insured to do so. If you don’t have your own policy, you need to be a named driver on someone else’s policy which allows you to drive that particular car.
If you don't have car insurance you could be fined, sent to prison or disqualified from driving. Ignoring this completely is therefore not one of our recommended saving tips!
Looking at the basics, it’s important to fully understand the differences between the three different types of cover.
Fully Comprehensive is the widest cover you can buy if you are involved in an accident or if your car is stolen. The key advantage of having it is that it covers the cost of repairing or replacing your car if it is involved in an accident whether or not it is your fault.
Third Party, Fire and Theft protects you from claims against you if you are involved in an accident and injure someone or their property and also pays for damage to your car if it is damaged in a fire or stolen. It does not pay for damage to your car in an accident.
Third Party Only is the cheapest form of car insurance but only protects you from claims against you if you are involved in an accident and injure someone, and will cover the cost of repairing or replacing the other person's car. It will not cover damage to your car and is probably also adequate if you drive a car that’s worth very little.
So, where do you go to obtain cover? As many people have recognised, simply renewing your car insurance based upon your existing provider’s quote is unlikely to get you the best deal, so you should shop around. A great way of doing so is using the various comparison sites available online such as Confused.com or Beat that Quote. A few big names such as Aviva and Direct Line don’t appear on these sites however and you need to go direct. If your car insurance is due for renewal soon, why not check out these links now and you may get a pleasant surprise!
Furthermore, when selecting car insurance and comparing prices, you need to make sure you are comparing like with like. In particular check out the following:
- Level of excess –the amount you need to pay towards a claim. The higher it is, the cheaper the premiums will be. You can opt for a higher excess to reduce premiums.
- Assumed mileage – the more miles you do, the more your insurance will cost you.
There will be a number of extra types of cover which you can opt for. When you get a quote (particularly online) the insurer or comparison site will make assumptions about whether or not to include the various optional extras (eg legal cover) as a default. Therefore, your cheap premium may add up if you add other covers in after your initial quote, or an expensive quote may become more attractive if you remove unwanted extras.
As well as choosing to pay a higher excess, you can reduce your premiums by limiting who drives your car, parking your car in a garage, keeping your mileage low or fitting an alarm or immobiliser.